Nov32025
Estate Planning Q&A Series

What steps are involved in funding an irrevocable trust? – North Carolina

Short Answer

In North Carolina, funding an irrevocable trust means transferring ownership of assets to the trustee so the trust, not you personally, holds title. Practically, that involves obtaining a tax ID for the trust, opening trust accounts, retitling assets to the trustee, recording deeds for real estate, and updating beneficiary designations where appropriate. The trustee must then keep assets separate, maintain records, and use a certification of trust to work with banks and others.

Understanding the Problem

In North Carolina, you want to know how to fund an irrevocable trust so it can serve asset-protection and estate-planning goals. The key decision is whether you (as settlor) and the trustee can take the concrete steps to move title into the trust promptly after the trust is signed. This page explains what you must do, who does it, and when in the context of estate planning.

Apply the Law

Under North Carolina law, once a trustee accepts the role, the trustee must take control of trust property, keep it separate from personal assets, and maintain adequate records. Trustees can present a certification of trust to banks, brokers, and other third parties instead of the full trust, and those third parties may rely on it in good faith. Most inter vivos trusts are not court-supervised, so funding is handled directly with financial institutions and the register of deeds for real estate. There is no single statutory deadline, but the trust’s protections begin only after title is properly transferred.

Key Requirements

  • Trustee acceptance and setup: The trustee accepts and obtains an EIN for the irrevocable trust, then opens trust bank/brokerage accounts.
  • Retitle assets to the trustee: Change legal title on accounts and property to “Trustee of the [Name] Irrevocable Trust, dated [date],” and record any real estate deeds with the Register of Deeds.
  • Use a certification of trust: Provide institutions a certification of trust to verify trustee authority without disclosing the full trust.
  • Segregate and earmark assets: Keep trust assets separate from personal property and ensure statements and records reflect trust ownership.
  • Maintain records and notices: Keep reliable books, statements, and confirmations of each transfer; provide beneficiary information as required.

What the Statutes Say

Analysis

Apply the Rule to the Facts: You plan to use an irrevocable trust for asset protection and estate planning. To make it effective, the trustee should obtain an EIN, open trust accounts, and immediately retitle selected assets to the trustee. Using a certification of trust, the trustee can work with banks and brokers to change titles and beneficiary designations. Keeping assets in separate trust-titled accounts and maintaining detailed records will satisfy North Carolina’s segregation and recordkeeping duties.

Process & Timing

  1. Who files: Settlor and trustee. Where: IRS (for EIN), financial institutions, insurance companies, and the county Register of Deeds (for real estate in that county). What: IRS Form SS‑4 (EIN), new trust bank/brokerage accounts, institution ownership change forms, a North Carolina deed for real estate, and a certification of trust. When: Start immediately after the trust is signed; allow time for each institution’s processing.
  2. Transfer assets: Move cash and securities to trust accounts; retitle non-retirement accounts and non-qualified investment accounts; record deeds for North Carolina real estate; assign business interests per governing documents; and update life insurance/annuity beneficiaries if the plan calls for the trust to receive proceeds.
  3. Finalize and document: Confirm each transfer in writing (statements, recorded deeds, ownership confirmations). Maintain a funding ledger and store all documents with the trust records.

Exceptions & Pitfalls

  • Leaving assets out: Any asset not retitled or properly designated remains outside the trust and may not be protected or pass per the trust.
  • Real estate errors: North Carolina deeds must meet state formalities and be recorded in the county where the property sits; confirm lender consent if a mortgage or due-on-sale clause is present.
  • Retirement accounts: Changing beneficiaries to a trust can affect taxes and payout options; coordinate with counsel and your tax advisor.
  • Insurance and annuities: Decide whether the trust should be owner, beneficiary, or both; coordinate with the carrier and verify updated declarations.
  • Commingling: Do not mix trust and personal funds; open dedicated trust accounts and ensure statements reflect trust ownership.
  • Documentation gaps: Keep copies of the certification of trust, transfer forms, assignments, and recorded deeds; incomplete files create administration and audit risk.

Conclusion

To fund an irrevocable trust in North Carolina, the trustee must take control of assets, keep them separate, and document ownership in the trust’s name. In practice, obtain an EIN, open trust accounts, retitle assets to the trustee, record any real estate deeds, and update beneficiary designations as the plan directs. The next step is to prepare a certification of trust and begin retitling with each institution, recording any North Carolina deeds with the Register of Deeds.

Talk to a Estate Planning Attorney

If you’re dealing with how to fund an irrevocable trust and want to align asset titles, deeds, and beneficiary designations, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Estate Planning Q&A Series

Author: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.