How do we set up a trust to hold our family home and make sure it passes the way my parents want? – North Carolina

Short Answer

In North Carolina, a common way to have a family home pass according to a parent’s plan is to create a written (often revocable) trust, name a trustee and successor trustee, and then “fund” the trust by deeding the home into the trust and recording that deed with the county Register of Deeds. The trust document controls who manages the home during life and who receives it (or the sale proceeds) after death. A will is still usually used alongside the trust to catch assets that were not transferred into the trust.

Understanding the Problem

In North Carolina estate planning, the key question is: can parents place a family home into a trust now so that the home is managed by a trustee if needed and then passes at death to the people the parents choose, in the shares and timing the parents choose. The decision point is whether the parents want the home to be owned by a trust during life (with the parents typically keeping control as trustee) so that the successor trustee can transfer or manage the property after death without relying on the default inheritance path.

Apply the Law

Under North Carolina law, a trust-based plan for a home generally has two parts: (1) a written trust agreement that names the trustee(s) and states who benefits and when, and (2) a valid transfer of the home into the trust (usually by a recorded deed). If the home is never transferred into the trust, the trust language alone may not control what happens to that home. A coordinated will can direct (“pour over”) probate assets into the trust at death so the trust terms still govern the final distribution.

Key Requirements

A written trust with clear roles: The trust should identify the parents as the people creating the trust, name a current trustee (often one or both parents), name a successor trustee, and state who receives the home (or its value) and under what conditions.
Funding the trust with the home: The parents must actually transfer ownership of the home into the trust, typically by signing a deed and recording it with the Register of Deeds in the county where the property is located.
Coordination with a will and fiduciary appointments: A will can name an executor and can direct remaining probate assets to the trust, helping keep the overall plan consistent if something was not transferred into the trust during life.

What the Statutes Say

N.C. Gen. Stat. § 39-6.7 (Construction of conveyances to or by trusts) – Treats a deed or other instrument that transfers property “to a trust” as a transfer to the trustee(s), which helps clarify how title is held and conveyed when a trust is involved.
N.C. Gen. Stat. § 31-47 (Testamentary additions to trusts) – Allows a will to leave property to the trustee of an existing trust (often called a “pour-over” approach), so the trust terms can control how that property is administered and distributed.

Analysis

Apply the Rule to the Facts: Here, the goal is for the parents to create wills and a family trust primarily to hold a family home, with an adult child potentially serving as executor and/or trustee. That plan usually works best when the trust document clearly names the parents as current trustee(s) and names the adult child (or another trusted person) as successor trustee, and when the home is actually deeded into the trust and recorded. The wills then backstop the plan by naming an executor and directing any probate assets that were not transferred into the trust to the trust, so the distribution still follows the parents’ written instructions.

Process & Timing

Who creates and signs: The parents. Where: The trust is signed privately; the deed transferring the home is recorded with the Register of Deeds in the county where the home is located. What: A written trust agreement, plus a deed transferring the home to the trustee(s) of the trust. When: Typically during life, as soon as the trust terms and trustee choices are finalized.
Coordinate the rest of the plan: The parents sign wills that match the trust plan (including naming an executor and, commonly, leaving remaining probate assets to the trust). If the parents want the adult child to act, the documents should clearly distinguish the roles of executor (probate) and trustee (trust administration).
After death administration: The successor trustee follows the trust instructions for the home (for example, continuing to hold it for a period, allowing a beneficiary to live there under stated conditions, or selling and distributing proceeds). If any assets remain outside the trust, the executor handles probate and then transfers assets to the trust if the will directs that result.

Exceptions & Pitfalls

Not “funding” the trust: A trust that is signed but never receives the home by deed may not control what happens to that property, which can force the family back into probate-based transfers.
Mortgage and insurance details: A deed transfer to a trust can require follow-up with the lender and homeowner’s insurance carrier to confirm records and coverage stay consistent with the new ownership structure.
Co-owners and marital rights: If both parents own the home, both typically need to participate in the transfer and the planning documents should match the way title is currently held.
Incapacity planning gaps: If a parent becomes incapacitated before signing or funding the trust, a power of attorney may be needed to complete transfers. For real estate transfers signed by an agent, North Carolina has recording rules for powers of attorney that can affect how the deed is handled at the Register of Deeds.
Choosing the wrong trustee structure: Naming a trustee who cannot realistically manage the home (maintenance, taxes, insurance, repairs, tenant issues if rented, and beneficiary communications) can create conflict and delay.

Conclusion

In North Carolina, setting up a trust to hold a family home usually requires more than signing a trust document: the parents also need to transfer the home into the trust by a properly prepared deed and record it with the county Register of Deeds. The trust should clearly name the trustee and successor trustee and state who receives the home (or sale proceeds) and when. A coordinated will can direct remaining probate assets into the trust. The most important next step is to prepare and sign the trust and deed, then record the deed promptly.

Talk to a Estate Planning Attorney

If a family is dealing with planning for a family home and wants it to pass according to a parent’s written wishes, our firm has experienced attorneys who can help explain options, prepare the trust and wills, and coordinate the deed transfer and recording steps. 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.