1. Competent: The grantor must have the capacity to create a trust.
2. Intent: The grantor must indicate an intention to establish a trust.
3. Definite Beneficiary: Unless it is a charitable trust or a trust for the care of an animal, the trust must have a definite beneficiary.
4. Sole Trustee Cannot be the Sole Beneficiary: The same person cannot be both the sole trustee and the sole beneficiary.
5. Trustee’s Duties: The trustee must have duties to perform.^[1]

Amending/Revoking – Unless the terms of the trust expressly state that it is irrevocable, the grantor may amend or revoke the trust at any time, regardless of the actual capacity of the grantor.^[2]

Bond Requirement – The trustee must put forward a bond if the trust was created before 2006, unless the terms of the trust forego this requirement.^[3] Otherwise, a bond is only necessary if required by the court, the grantor, or the terms of the trust.^[4]

Certification of Trust – In lieu of a copy of the trust instrument, the trustee may furnish to a person who is not a beneficiary a certification of trust that identifies the date of the trust’s creation, the names of the grantor and trustee, and other relevant information.^[5]

Co-Trustees – If there are more than two co-trustees and they are unable to reach a unanimous decision, they may act by majority decision. If there are two co-trustees, they may only act unanimously.^[6]

Contesting a Trust – A person may begin an action to contest a trust within 120 days of receiving a copy of the trust instrument from the trustee, or within three years of the grantor’s death, whichever is earlier.^[7]

Costs Related to the Trust – The trustee, in administering the trust, may only incur costs that are reasonable given the assets in the trust, the trust purposes, and the skills of the trustee.^[8]

Jurisdiction – A trust created in another jurisdiction is valid in North Carolina if its creation was in compliance with the laws of the state in which the trust instrument was executed.^[9]

Oral Trusts – While a trust does not necessarily need to be evidenced by a trust instrument, the creation of an oral trust must be established by clear and convincing evidence.^[10]

Pet Trusts – A trust may be validly created to provide for the care of one or more pets or other domesticated animals that are alive at the time of the trust’s creation.^[11]

Signing Requirements – There is no North Carolina state law that requires a revocable trust to be signed.

Spendthrift Provision – A spendthrift provision must restrain both the voluntary and involuntary transfer of a beneficiary’s interest in order to be considered valid.^[12]

Trustee’s Compensation – If the terms of the trust do not specify the trustee’s compensation, they are entitled to reasonable compensation drawn from the assets of the trust.^[13]

Trustee’s Duties – The trustee has a duty to prudently administer a trust in good faith, in the interest of the beneficiaries, and in accordance with its terms and purposes.^[14]

Trustee’s Powers – In addition to the powers conferred upon them by the terms of the trust, the trustee is empowered to collect, invest, exchange, partition, or otherwise change the character of trust property.^[15]