Short Answer

In North Carolina, a revocable living trust helps with management and probate avoidance but does not shield your assets from your own creditors. Asset protection usually requires a properly drafted and funded irrevocable trust where you are not a beneficiary, or a discretionary spendthrift trust to protect what you leave to others. There is no routine court filing to create a private trust; you sign a written trust agreement and retitle assets into the trust.

Understanding the Problem

You’re in North Carolina and want to know whether you can set up a trust to protect your assets. You want practical steps: what kind of trust to use, who serves as trustee, and how to fund it. You called our firm interested in creating a trust, and you want to know what it takes and what protections are realistic.

Apply the Law

North Carolina follows the Uniform Trust Code. A revocable living trust is flexible and private but offers no protection from your own creditors. To protect assets from your creditors, you generally need an irrevocable structure that does not let you keep control or benefit. To protect assets you leave to others, use a trust with strong spendthrift and discretionary distribution provisions. Trusts are private; there is no standard filing with the Clerk of Superior Court, and real estate moves into a trust by recording a deed with the Register of Deeds where the property sits. After the settlor’s death, a 120-day contest period can be triggered by notice in certain cases.

Key Requirements

• Choose the right trust type: Revocable for control and probate avoidance; irrevocable (with you not as a beneficiary) for personal asset protection.
• Name the players: Settlor (you), an independent trustee, and definite beneficiaries with clear distribution standards.
• Add spendthrift language: Restricts a beneficiary’s ability to transfer their interest and restrains most creditor claims until distribution.
• Fund the trust: Retitle accounts to the trustee and record deeds for any North Carolina real estate with the county Register of Deeds.
• Use a certification of trust with banks: Share a statutory summary instead of the full trust to open or retitle accounts.

What the Statutes Say

• N.C. Gen. Stat. § 36C-5-505 (Claims of settlor’s creditors) – Your creditors can reach revocable trust assets during life and at death; limits apply to irrevocable trusts.
• N.C. Gen. Stat. § 36C-5-502 (Spendthrift provisions) – Valid spendthrift clauses restrain transfer of a beneficiary’s interest and block most creditors.
• N.C. Gen. Stat. § 36C-5-504 (Discretionary interests) – Creditors generally cannot compel distributions from a discretionary trust; limited exceptions apply.
• N.C. Gen. Stat. § 36C-6-604 (Contest of revocable trust) – After death, a trustee’s written notice can start a 120-day contest window.

Analysis

Apply the Rule to the Facts: You want a trust to protect assets. If your goal is to shield your own assets now, a standard revocable trust will not do that; consider an irrevocable trust with an independent trustee and no retained benefits. If your goal is to protect what you leave to family, a trust for them with spendthrift and discretionary provisions can help keep assets out of their creditors’ reach.

Process & Timing

1. Who files: No court filing is required to create a private trust. Where: Sign the trust privately; record any real estate deed with the county Register of Deeds where the property is located in North Carolina. What: A written trust agreement; a new deed for real estate; bank/financial title changes using a Certification of Trust (statutory summary). When: As soon as the trust is signed and funded; earlier funding strengthens protection for future issues.
2. Work with financial institutions to retitle accounts to the trustee using the certification of trust; processing typically takes days to a few weeks, and procedures vary by institution.
3. Maintain records and follow the trust’s terms. The Clerk of Superior Court does not supervise private trust accounts unless the instrument or law requires it. If you need a deed recorded, the Register of Deeds records it the same day it is presented and accepted.

Exceptions & Pitfalls

• North Carolina does not allow a self-settled spendthrift trust to block your own creditors; revocable trusts offer no personal asset protection.
• Transfers made to avoid existing creditors can be challenged and unwound; timing and facts matter.
• Mandatory distributions can be reachable by a beneficiary’s creditors; keep distributions discretionary where protection is a priority.
• Certain support claims (like child support) can reach discretionary trust distributions by court order.
• Funding failures (not retitling assets, not recording deeds) defeat the plan; confirm each asset is properly moved to the trustee.
• Mixing personal and trust funds, or acting as trustee without observing fiduciary duties, risks liability and loss of protection.

Talk to a Estate Planning Attorney

If you’re considering a trust to protect assets or to safeguard inheritances for loved ones, our firm has experienced attorneys who can help you understand your options and timelines. Call us today.

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.