Can I set up an individual revocable trust even though I’m married? – North Carolina

Short Answer

Yes. In North Carolina, a married person can create an individual (separate) revocable living trust. The practical issue is not marital status, but whether the assets being moved into the trust are owned individually or jointly with a spouse (especially a home held as “tenants by the entirety”). A trust can be drafted to work with a spouse’s rights and with proper deed and beneficiary updates, but funding decisions matter.

Understanding the Problem

In North Carolina estate planning, the question is whether a married person can create a revocable trust in only one spouse’s name and use it to hold major assets like a house and an operating business. The decision point is usually how title is held today (sole name versus joint ownership) and what permissions or signatures are needed to move that asset into one spouse’s trust. The goal is typically to centralize management during life and set a clear plan for what happens at death while avoiding common transfer problems.

Apply the Law

North Carolina generally allows a person to create a trust and to transfer property into that trust if the person has the legal power to transfer that property. A revocable trust is commonly used because the person who creates it (the “settlor”) can usually change or revoke it during life and often serves as initial trustee. Marriage does not prevent creating a separate trust, but jointly titled property—especially real estate owned as a marital survivorship form—can require a coordinated transfer (for example, a joint trust or equal-shares transfers to two separate trusts) to preserve certain protections and to avoid an ineffective or incomplete conveyance.

Key Requirements

Valid trust setup: The trust must be properly created in writing with clear terms (who the trustee is, who benefits, and what happens at incapacity and death).
Authority to transfer the asset: The person funding the trust must own the asset in a way that allows transfer (sole ownership is usually straightforward; joint ownership can require both spouses to sign).
Correct “funding” steps: A trust only controls assets that are actually transferred into it (by deed for real estate, assignments for business interests, and beneficiary/ownership changes for many financial accounts).

What the Statutes Say

N.C. Gen. Stat. § 41-56 (Creation of tenancy by the entirety) – Explains when a conveyance to spouses creates a tenancy by the entirety, a common way married couples hold a home.
N.C. Gen. Stat. § 41-65 (Entireties property conveyed to trusts) – Addresses what happens when tenancy-by-the-entirety real estate is conveyed to a joint trust or in equal shares to two separate trusts, including conditions tied to creditor protections and beneficiary status.

Analysis

Apply the Rule to the Facts: The facts describe a married person who wants an individual revocable trust to hold a house and a business. Creating the trust document is usually the easy part; the harder part is “funding” it correctly. If the house is titled in both spouses’ names (often as tenants by the entirety), transferring it into only one spouse’s individual trust may not work the way intended and can change important legal protections unless the transfer is structured and signed properly. A business interest may be easier to transfer if it is owned in one spouse’s name, but the transfer still needs correct assignments and coordination with the business’s governing documents and lender or contract restrictions.

Process & Timing

Who files: No court filing is required to create a typical revocable living trust during life. Where: The trust is signed and kept with the estate planning records; real estate deeds are recorded with the Register of Deeds in the county where the property is located. What: A revocable trust agreement plus “funding” documents (commonly a new deed for the home and written assignments/transfer documents for the business interest). When: After the trust is signed; deeds are typically recorded promptly once executed.
Fund the trust: Real estate generally requires a deed into the trustee of the trust; business interests often require an assignment and updates to company records (and sometimes consents required by an operating agreement, bylaws, shareholder agreement, or lender).
Confirm ownership and alignment: After transfers, confirm that title/ownership records, beneficiary designations, and the overall plan still match the estate plan (especially if the house was jointly owned).

Exceptions & Pitfalls

Jointly owned home issues: If a home is held as tenants by the entirety, transferring it into only one spouse’s individual trust can cause unintended results. North Carolina law specifically addresses transfers of entireties real estate to a joint trust or in equal shares to two separate trusts, with conditions that can matter for creditor protection and beneficiary status.
One spouse signs, but both own: If both spouses are on title, both typically need to sign a deed to move the property into any trust arrangement.
Business transfer restrictions: Many business entities restrict transfers or require approvals. A trust transfer done without required consent can create disputes or trigger contractual defaults.
Unfunded trust: Signing a trust but failing to deed the house or assign the business interest means the trust may not control those assets at death, which can defeat the main purpose of the plan.
Coordination with spouse’s plan: Separate trusts can work well, but they should be coordinated so beneficiary designations and “what happens at the first death” provisions do not conflict with the overall family plan.

Conclusion

In North Carolina, marriage does not prevent creating an individual revocable trust. The controlling issue is whether the assets intended for the trust can be transferred by one spouse alone, especially when a house is jointly owned as tenants by the entirety. A separate trust can still be a good fit, but the plan must include proper funding steps for real estate and business interests. Next step: sign the trust and record the correct deed with the Register of Deeds to transfer any real estate into the trust as intended.

Talk to a Estate Planning Attorney

If you’re dealing with setting up an individual revocable trust while married and need to figure out how to transfer a home or business into the trust without creating unintended ownership problems, 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.