What kind of assets and property can be owned by a trust?
As you can see, almost everything can be owned by a trust, but there are a few items that cannot be owned by a trust.
First, retirement accounts such as 401k, 403b, IRA, Roth IRA, and similar plans. For tax purposes, the IRS requires that these accounts be owned by an individual. As such they cannot be titled to a trust. Instead, you can name the trust as the primary beneficiary of the account on a beneficiary designation form.
Second, certain professional business may not be transferred to a trust. By state law, certain occupations are deemed “professionals” requiring an individual to obtain an appropriate professional license to practice the specified occupation. This includes professions such as doctors, dentists, lawyers, accountants, real estate brokers, architects, optometrists, psychologists, chiropractors, podiatrists, certain engineers and land surveyors. For most of these professions, the State of North Carolina requires that if they are going to form a business entity, it must either be a Professional Corporation, Professional Association, or Professional Limited Liability Company. And in addition, the rules require that most of these professions, only that type of professional may be an owner of the professional business. For example, only lawyers can be owners of a law firm—not a trust. Thus, most professionals will not be able to title their ownership interest in their professional business to their trust.
Third, for other business interests, such as corporations, partnerships and limited liability companies, you must first review the business documents to determine whether there are any transfer restrictions included in the by-laws, operating agreement or a separate agreement. The corporate documents of any small or family held businesses include restrictions that prohibit an owner of selling or transferring his or her ownership interests without the prior approval of the other owners/members.