Feb192026
Estate Planning Q&A Series

What assets can I put into an irrevocable trust, and what happens to assets I keep outside of it? – North Carolina

Short Answer

In North Carolina, almost any asset that can be legally transferred can usually be placed into an irrevocable trust, including real estate, bank and investment accounts, and many types of personal property. The key is that the asset must be properly “retitled” or assigned to the trustee (or otherwise made trust-owned) so the trust actually owns it. Assets kept outside the irrevocable trust generally remain owned by the individual, which often means they stay exposed to the individual’s personal risks and may require separate planning to control who receives them at death.

Understanding the Problem

In North Carolina estate planning, the main decision point is whether an asset should be transferred into an irrevocable trust now, or kept outside the trust and handled through other planning tools. The question usually comes up when a person is considering an irrevocable trust and wants to understand what types of property can be moved into it and what the practical consequences are for property that is not moved. The answer depends less on the “type” of asset and more on whether ownership can be changed and whether the trust terms allow the trustee to hold and manage that asset.

Apply the Law

Under North Carolina law, a trust is funded when property is transferred to the trustee (or otherwise made subject to the trust) using the legal method required for that kind of property. In plain terms: an irrevocable trust only controls what it owns. If an asset is never transferred into the trust, the trust generally has no authority over it, and it will be controlled by the asset’s title, beneficiary designation, or (if neither applies) the estate administration process in the county where an estate is opened.

Key Requirements

  • Transfer method matches the asset: Deeds are typically used for real estate, account retitling is used for bank and brokerage accounts, and written assignments are often used for certain contract rights or business interests.
  • Trust terms allow the asset: The trust document should authorize the trustee to hold the asset type (for example, real estate, closely held business interests, or life insurance), and should address who benefits and when.
  • Ownership and control actually change: With an irrevocable trust, the transfer is meant to be real. If the asset stays titled in an individual name, it is usually still treated as outside the trust for administration and planning purposes.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the goal is to decide whether creating an irrevocable trust makes sense and, if so, which assets should be moved into it. Under North Carolina practice, the trust will only work as intended if the assets are actually transferred into the trust using the correct method for each asset type. Any assets that remain outside the trust will generally be controlled by their current title and beneficiary designations, and they may require separate planning so the overall estate plan stays consistent.

Process & Timing

  1. Who files: Typically the person creating the trust (the “grantor/settlor”), working with the trustee. Where: Funding steps happen with the institution holding the asset (bank/brokerage/insurance company) and, for real estate, through the Register of Deeds in the North Carolina county where the property is located. What: Common documents include a deed to the trustee for real estate, account retitling paperwork for financial accounts, and written assignments for certain personal property or contract rights. When: Ideally, immediately after the trust is signed, and before any event that would make transfers harder (incapacity, death, or a pending sale/refinance).
  2. Confirm each transfer “took”: For accounts, obtain updated statements showing the trust (or trustee) as owner. For real estate, obtain the recorded deed. For business interests, confirm the company’s records reflect the trust as owner and that any required consents were obtained.
  3. Coordinate the “outside” assets: For assets not transferred, align beneficiary designations and ownership (for example, payable-on-death designations, transfer-on-death registrations where available, or joint ownership) so they do not accidentally conflict with the trust plan.

Exceptions & Pitfalls

  • “Trust created” is not the same as “trust funded”: Signing an irrevocable trust document does not move assets by itself; each asset needs its own transfer step.
  • Some assets have transfer restrictions: Certain business interests, contracts, and professional practice-related assets may require consent, updated records, or may not be transferable without triggering other issues.
  • Beneficiary designations can override the trust plan: Retirement accounts and life insurance often pass by beneficiary designation. If those designations are not coordinated, an asset kept outside the trust may go to someone different than intended.
  • Real estate requires careful paperwork: A deed must be prepared and recorded correctly, and the trust name/trustee capacity must match the trust document to avoid title problems later.
  • Tax advice is separate: Moving assets into an irrevocable trust can have tax consequences depending on the trust design and the asset type; a tax attorney or CPA should review the plan before transfers are completed.

Conclusion

In North Carolina, an irrevocable trust can usually hold most asset types, but the trust only controls assets that are actually transferred into it using the correct method for that property. Assets kept outside the trust generally remain governed by their title and beneficiary designations and may require probate or other administration if no non-probate transfer applies. A practical next step is to create a written “funding list” and complete the retitling/assignment paperwork for each asset as soon as the trust is signed.

Talk to a Estate Planning Attorney

If you’re dealing with deciding what to fund into an irrevocable trust versus what to keep outside of it, our firm has experienced attorneys who can help explain options, paperwork, and timing. 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: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.