Property in your revocable living trust is not safe from your creditors. But in some states like North Carolina, there may still be other protection available from creditors.


A common misconception is that property transferred to a revocable trust is protected from creditors. Unfortunately, this is not true. But the good news is that some property in your North Carolina revocable living trust may be protected from creditors if you are married. This protection doesn’t come from the trust, but from other provisions of North Carolina law.

What type of property in my trust is protected?

In North Carolina, the marital residence is protected if certain conditions are met. If you are married and purchased your North Carolina residence after your marriage, your residence is called “tenancy by the entirety property” and is protected from creditors of either spouse. Tenancy by the entirety is a particular type of property ownership in North Carolina. South Carolina does not have tenancy by the entirety property.

Are there requirements so that my home retains tenancy by the entirety creditor protection when it is transferred into a trust?

Yes. Once transferred into your trust, your home will retain the creditor protection only if all of the following apply.

(1) You and your spouse remain married.

(2) The real property remains in the trust  

(3) You and your spouse are current beneficiaries of the trust  

Trusts can be complicated. If you have further questions, contact us at 704-887-5242 and ask to schedule a consultation with Nancy.


This post is an advertisement and should not be construed as offering legal advice, or creating an attorney client relationship between the viewer and Law Office of Nancy L Roberts PLLC. Always seek legal advice from an attorney licensed in your state when you have a legal question. 

Photo - Shutterstock/Andy Dean Photography

Nancy Roberts
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