ESTATE PLANNING/UNIFORM TRUST CODE.

View NCGA Bill Details2015-2016 Session
Senate Bill 336 (Public) Filed Wednesday, March 18, 2015
AN ACT TO AMEND THE LAW GOVERNING ESTATE PLANNING AND FIDUCIARIES, TO AMEND THE UNIFORM TRUST CODE, AND TO ESTABLISH A UNIFORM POWERS OF APPOINTMENT ACT.
Intro. by Hartsell, Barringer.

Status: Ch. SL 2015-205 (Senate Action) (Aug 11 2015)

Bill History:

S 336/S.L. 2015-205

Bill Summaries:

  • Summary date: Aug 12 2015 - More information

    AN ACT TO AMEND THE LAW GOVERNING ESTATE PLANNING AND FIDUCIARIES, TO AMEND THE UNIFORM TRUST CODE, AND TO ESTABLISH A UNIFORM POWERS OF APPOINTMENT ACT. Enacted August 11, 2015. Sections 6 through 10 are effective October 1, 2015. The remainder is effective August 11, 2015.


  • Summary date: Jul 30 2015 - More information

    Conference report makes the following changes to the 5th edition.

    Amends proposed GS Chapter 28A, Article 2B, Living Probate, making technical corrections for the purposes of language conformity. Deletes language in GS 28A-2B-5 that previously allowed the contents of a file concerning a judgment for will validity to be released to (1) the testator of the will, (2) the judge hearing or reviewing the matter, or (3) certain interested persons and attorneys, without an order from the clerk of court. Adds language allowing such disclosure to any court of competent jurisdiction hearing or reviewing the matter. Provides that after the death of a petitioner, sealed files will be unsealed at the request of any interested person for the purposes of probate or other estate proceedings.

    With the exception of the changes to GS 30-3.3A(e), deletes all of the changes in Part IV of the act, which includes proposed sections or changes made to the following: GS 28A-13-3 (Powers of a personal representative or fiduciary), GS 28A-13-3.1 (Power of a personal representative to deal with real property without a court order), GS 28A-13-3.2 (Notice of exercise of power with respect to real property not devised to personal representative), GS 28A-13-3.3 (Reimbursement of devisees for payment of carrying costs), GS 28A-15-1(c) (concerning sales by personal representatives), GS 28A-15-2 (Title and possession of property), GS 28A-22-1 (Scheme of distribution; testate and intestate estates), and GS 28A-23-3(b) (concerning proceeds of sales of an estate).

    Makes technical changes.


  • Summary date: Jun 4 2015 - More information

    House amendment makes the following changes to the 4th edition.

    Amends proposed GS 28A-2B-4(a), concerning judgments about the validity of a will or codicil and the ability to file caveats, adding language that provides that a party can motion in superior court to be permitted to file a caveat despite the entry of judgement if such party has shown, by clear and convincing evidence, that before and during the hearing the testator was subject to financial or physical duress or coercion significant enough that the testator would not have reasonably disclosed it at the hearing.

    Updates statutory references to the Uniform Fraudulent Transfer Act, now referring to the Uniform Voidable Transactions Act pursuant to changes made in SL 2015-23.


  • Summary date: Jun 3 2015 - More information

    House committee substitute makes the following changes to the 3rd edition.

    Amends proposed GS 28A-2B-1, concerning the establishment before death that a will or codicil is valid, adding new subsection (c) clarifying that the failure to use procedures provided for in GS Chapter 28A, Article 2B, Living Probate, will not have any evidentiary or procedural effect on any future probate proceedings.

    Amends GS 28A-13-3(a), creating new subdivision (1a) specifying that a personal representative or fiduciary’s powers to take possession, custody, or control of a decedent’s real property is subject to the provisions of GS 28A-13-3(c), as amended in this act, or the provisions of new GS 28A-13-3.1, as enacted in this act. Provides that if the personal representative determines that such custody, possession, or control of the real property is not necessary (standard was, not in the best interest) to administer the estate, then the real property may be left with or surrendered to the heir or devisee presumptively entitled to the real property. Amends GS 28A-13-3(c) to require the personal representative to petition the clerk of court for an order authorizing possession, custody, or control of the real property, unless the authority to take possession, custody, or control of real property is granted to the personal representative under new GS 28A-13-3.1. Makes conforming and clarifying changes.

    Amends Article 13 of GS Chapter 28A by adding three new statutes: (1) GS 28A-13-3.1, Power of personal representative to deal with real property without a court order; (2) GS 28A-13-3.2, Notice of exercise of power with respect to real property not devised to personal representative; and (3) GS 28A-13-3.3, Reimbursement of devisees for payment of carrying costs.

    Amends GS 28A-15-1(c) to delete the requirement for the personal representative to institute a special proceeding before the clerk of court for a sale, option, exchange, partition, lease, mortgage, or other disposition of any real property under GS 28A-13-3.1.

    Amends subsection (b) of GS 28A-15-2 to delineate factors and procedures regarding the vesting of title to real property of a decedent. Sets out new provisions governing options, leases, or mortgages on the decedent's property, and docketed judgments or other liens against heirs or devisees.

    Amends GS 28A-22-1 to provide that the assets that remain from the sale of real property by the personal representative retain the character of real property for purposes of distributing those assets to the devisee or heir, or persons having liens against the devisee or heir only.

    Amends GS 28A-23-3(b) to provide that when real property is sold for reasons other than to pay debts or devises, the proceeds from the sale are not to be considered in computing the commission for the personal representative.


  • Summary date: Apr 27 2015 - More information

    Senate amendment makes the following changes to the 2nd edition.

    Amends GS 28A-2B-1 permitting any individual who is a resident of North Carolina who has executed a will or codicil to file a petition seeking a judicial declaration that the will or codicil is valid (was, allowed certain individuals to petition the court for a judicial declaration of validity of a will/codicil executed by a resident of North Carolina, including the individual who executed the will, an individual's attorney-in-fact under a valid power of attorney, or a general guardian or guardian of the estate). Makes a conforming change to GS 28A-2B-4(b).

    With the exception of the changes to GS 30-3.3A(e), deletes all of the changes in Part IV, which amended provisions regarding the authority of a personal representative or fiduciary to take possession, custody, or control of the (1) personal property and the (2) real property of the decedent, except as subject to express limitations in a will and the provisions of GS 28A-13-6, regarding the powers of joint personal representatives. Makes the provisions of Part IV effective when the act becomes law (was, effective January 1, 2016).


  • Summary date: Apr 21 2015 - More information

    Senate committee substitute makes the following changes to the 1st edition.

    Makes clarifying changes in GS 35A-1374(i).

    Deletes Part II of the act, which amended the income taxation of trusts and estates. Makes conforming changes to Part numbers in the act.

    Enacts the new statutes in GS Chapter 28A within new Article 2B, Living Probate. Amends proposed GS 28A-2B-2 to set venue in the county where the individual whose will or codicil is the subject of the petition is domiciled (was, resides). Amends GS 28A-2B-3 to require a petition for will validity to require that the statement that the individual had testamentary capacity refer to capacity at the time the will was executed. Amends GS 28A-2B-4 to provide that if the court declares a will or codicil to be valid, the court may order that the will or codicil cannot be revoked and that no subsequent will or codicil will be valid unless it is declared valid in a proceeding. Amends the confidentiality requirements in GS 28A-2B-5 to allow a party to a proceeding to move, after judgement has been entered, that the file contents be sealed and kept confidential, upon which the clerk is required to seal the contents of the file from public inspection. Prohibits the file contents from being released except by order of the clerk, with exceptions; removes a member of the clerical or administrative staff of the court if access is essential for authorized internal administrative purposes from those excepted individuals. Deletes the provision making specified items available for public inspection. Allows the court to order the records that are confidential to be made available to a person who is not listed in the statute. 

    Makes clarifying and technical changes.

    Makes Section 4 of the act amending statutes in GS Chapter 28A effective January 1, 2016.


  • Summary date: Mar 19 2015 - More information

    Part I.

    Amends GS Chapter 35A, Article 21, Standby Guardian, to provide for the appointment of standby and successor guardians for incompetent adults in addition to minor children. Amends provisions providing for the appointment of a standby guardian by petition, establishing that a proceeding for appointment of a standby guardian in the case of an incompetent adult is commenced by the petitioner filing a petition with the clerk of the superior court in the county where the guardianship is docketed. Amends the definition section, adding incompetent adult as a new term.  Sets out notice requirements for such petitions and proceedings, requiring a copy of the petition and the time, date, and place set for the hearing be sent to those as a motion in the cause under GS 35A-1207. Requires service of process to be made pursuant to Rule 5 of the Rules of Civil Procedure, unless the clerk directs otherwise, for petitions concerning incompetent adults. Amends the provisions for appointing a standby guardian by written designation, properly signed and witnessed, providing that the designated standby guardian must commence a proceeding to be appointed for a case involving an incompetent adult by filing a petition with the clerk of superior court in the county where the guardianship is docketed. Sets out same notice procedures for appointment of a designated standby guardian as above in the case of appointment commenced by a petitioner. Makes organizational changes to the termination provisions for any standby guardianship created under this Article. Makes further conforming, clarifying, and technical changes to the Article reflecting the new application to appointments of standby guardians for incompetent adults, including changes to the following sections, GS 35A-1376 and GS 35A-1379.

    Part II.

    Amends GS 105-160.2 clarifying that the tax imposed by this Part is computed on the amount of taxable income of an estate or trust in regards to the following: (1) on a nonresident estate/trust to the extent income is attributable to ownership of real or tangible property in the state or income is derived from a business, trade, occupation, or similar carried out in the State; (2) on a resident estate/trust that is for the benefit of a resident current beneficiary; or (3) on a resident trust or estate for the benefit of a nonresident current beneficiary to the extent income is attributable to ownership of real or tangible property in the state or income is derived from a business, trade, occupation or similar carried out in the state. Provides for the apportionment of taxable income of resident estates/trusts between resident and nonresident beneficiaries to be made on a rational basis. Provides for rebuttable presumptions to be made and rebutted in regards to equal apportionment of taxable income as well as procedures for having an alternative apportionment considered. Sets out new definitions to be used in this section, including current beneficiary, nonresident estate, and resident trust

    This Part is effective for taxable years beginning on or after January 1, 2015.

    Part III.

    Amends GS Chapter 28A adding a new article providing for certain living probate procedures, including allowing certain individuals to petition the court for a judicial declaration of validity of a will/codicil executed by a resident of North Carolina, including the individual him/herself, an individual's attorney-in-fact under a valid power of attorney, or a general guardian or guardian of the estate. Sets out procedures for the filing of such petitions as well as challenging the validity by an interested party. Establishes venue for the petitions as the county where the individual whose will or codicil is subject of the petition resides. Sets out the information a petition must contain to be filed and verified, including statements as to the testamentary capacity of the individual and that the individual was free from undue influence and duress during execution. Provides provisions concerning a will/codicil after a judicial declaration has been made. Provides that in cases where the will or codicil is deemed valid, the judgment will be binding on all parties to the proceeding. Allows for, upon motion of any party or the court, deeming the will/codicil to be irrevocable. In cases where it is revoked or modified by the court, provides that nothing prevents an interested party from contesting the validity of the instrument(s). Requires the clerk of court to keep and maintain complete records of the cases filed pursuant to these provisions and maintain them as confidential. Sets out what the record must include. Provides for the inspection of the records by certain individuals, including the named petitioner, testator of the will, certain interested persons, attorney for the petitioner, the reviewing judge, and members of the staff of the court. Provides that certain documents concerning notices, summaries of proceedings, and other documents related to the official proceedings are available for public inspection. Provides for costs and attorneys' fees to be assessed at the discretion of the court in certain circumstances. 

    Part IV.

    Enacts new GS Chapter 31D, North Carolina Uniform Powers of Appointment Act, comprised of six Articles, providing for the disposition of a donor’s property to specified eligible recipients by a properly authorized and appointed third party.

    Article 1, General Provisions and Definitions, provides definitions for use in the new Article and defines key roles concerning the power of appointment, including donor, as the person who creates a power of appointment; the powerholder, meaning the person in whom a donor creates the power of appointment; and permissible appointee, as a person who can receive appointments or property. Additionally, the act defines power of appointment as a power that enables a powerholder acting in a nonfiduciary capacity to designate a recipient of an ownership interest in or another power of appointment over the appointive property.  Remaining definitions describe different types of powers and different methods of exercising a power. Establishes provisions concerning the governing law for the creation, revocation, or amendment of the power of appointment, including that the law of the jurisdiction designated in the instrument governs or, in specified cases, the law of the jurisdiction at the relevant time. Also provides the same in regards to the exercise, release, or disclaimer of power or revocation or amendment of the power. Provides that the law and principles of common law and equity supplement but do not supplant this act.

    Article 2, Creation, Revocation, and Amendment of Power of Appointment, provides for the creation of the powers of appointment, requiring that the power must be in a valid instrument, the instrument that creates the powers must also transfer the appointive property, and the instrument must use terms showing the donor’s intent to create a power to appoint property. Sets out limitations on the creation of such powers, such as the powers cannot be created in a deceased person. Other provisions state that a power is nontransferable and provide rules and presumptions as to the extent of the power. Provides that a power may not be revoked or amended unless either (1) the instrument creating the power is revocable by the donor or (2) the donor reserves a power of revocation or amendment in the instrument.

    Article 3, Exercise of Power of Appointment, sets out the rules for exercising a power of appointment. Sets out provisions and requirements if the powerholder’s intent is unclear in the instrument. Provides that a powerholder can, if permitted, make an appointment in any form, including in trust or by creating a general power of appointment. Sets out provisions governing the use of a general or nongeneral  power of appointment. Enacts provisions that govern appointments to deceased impermissible appointees and the disposition of unappointed property under varying powers of appointment. Provides that if the instrument does not prohibit revocation or amendment, the powerholder can revoke or amend an exercise of power in specified circumstances.

    Article 4, Disclaimer or Release; Contract to Appoint or Not to Appoint, provides certain disclaimers, applying to powerholders, permissible appointees, appointees, and takers in default. Provides a powerholder authority to release a power unless prohibited by the terms of the instrument. Sets out the methods for releasing powers of appointment, including by substantial compliance with any release method provided for in the instrument. Provides provisions and procedures concerning the revoking or amending of a release, including that such can only be revoked or released to the extent the instrument of release is revocable or the powerholder reserves a power of revocation or amendment. Provides provisions concerning the ability of a powerholder to contract to exercise, or not to exercise, a power of appointment. Establishes remedies for breach of contract regarding appointing and not appointing, limiting any remedies to damages payable out of the appointive property or, if appropriate, specific performance of the contract. 

    Article 5, Rights of Powerholder's Creditors in Appointive Property, provides provisions concerning creditor claims on appointive property. Sets out provisions concerning creditor claims and the powerholder's ability to withdraw property from a trust in regards to whether the powerholder created a general power of appointment. Provides that appointive property subject to a nongeneral power of appointment is exempt from creditor claims unless said property has been transferred in a specified fraudulent manner. 

    Article 6, Miscellaneous Provisions, provides that consideration must be given to promoting uniformity of law regarding the subject matter and state law.  Provides that the provisions modify, limit, or supersede the Electronic Signatures in Global and National Commerce Act, except for the specified portions of that law. Sets out provisions which govern how the new provisions apply to existing relationships, powers of appointment, and proceedings enacted or in existence before this act became law.  

    Part V.

    Current law provides that a personal representative or fiduciary has the authority to take possession, custody, or control of the (1) personal property and the (2) real property of the decedent, except as subject to express limitations in a will and the provisions of GS 28A-13-6, regarding the powers of joint personal representatives.

    Amends GS 28A-13-3(a), adding a new subdivision (1a) specifying that a personal representative or fiduciary’s powers to take possession, custody, or control of a decedent’s real property is subject to the provisions of GS 28A-13-3(c), as amended in this act, or the provisions of new GS 28A-13-3.1, as enacted in this act. Provides that if the personal representative determines that such custody, possession, or control of the real property is not necessary (standard was, not in the best interest) to administer the estate, then the real property may be left with or surrendered to the heir or devisee presumptively entitled to the real property.

    Amends GS 28A-13-3(c) to require the personal representative to petition the clerk of court for an order authorizing possession, custody, or control of the real property, unless the authority to take possession, custody, or control of real property is granted to the personal representative under new GS 28A-13-3.1.

    Makes conforming and clarifying changes.

    Amends Article 13 of GS Chapter 28A by adding three new statutes: (1) GS 28A-13-3.1, Power of personal representative to deal with real property without a court order; (2) GS 28A-13-3.2, Notice of exercise of power with respect to real property not devised to personal representative; and (3) GS 28A-13-3.3, Reimbursement of devisees for payment of carrying costs.

    Amends GS 28A-15-1(c) to delete the requirement for the personal representative to institute a special proceeding before the clerk of court for a sale, option, exchange, partition, lease, mortgage, or other disposition of any real property under GS 28A-13-3.1. Amends subsection (b) of GS 28A-15-2 to delineate factors and procedure regarding the vesting of title to real property of a decedent. Sets out new provisions governing options, leases, or mortgages on the decedent's property, and docketed judgments or other liens against heirs or devisees.

    Amends GS 28A-22-1 to provide that the assets that remain from the sale of real property by the personal representative retain the character of real property for purposes of distributing those assets to the devisee or heir, or persons having liens against the devisee or heir only.

    Amends GS 28A-23-3(b) to provide that when real property is sold for reasons other than to pay debts or devises, the proceeds from the sale are not to be considered in computing the commission for the personal representative.

    Part V becomes effective October 1, 2015, and applies to estates of persons dying on or after that date.

    Part VI.

    Amends GS 39-13.7 to provide that real property held by a husband and wife as a tenancy by the entireties and conveyed to a joint trust or in equal shares to two separate trusts is no longer held by the couple as tenants by the entirety but retains the same immunities from the claims of separate creditors as would exist if the husband and wife had continued to hold the property as tenants by the entireties. Specifies the facts and conditions that must continue to apply in order to maintain the immunity. Identifies the role of the trustee acting under the express provisions of a trust instrument or the written consent of the husband and wife. Defines terms for the purposes of this section.

    Part VII.

    Amends GS 36C-10-1005 to make changes to the tolling of statute of limitations against a trustee.

    Part VIII.

    Makes clarifying changes regarding the applicability of default and mandatory rules governing the powers and duties of a trustee and a power holder under Article 8A of GS Chapter 36C.

    Part IX.

    Amends GS 36C-8-816.1, regarding a trustee’s discretionary power to appoint a second trust. Provides that the second trust may have a duration that is longer than the duration of the first trust. Adds additional provisions governing the appointing of the second trust and defines terms as they apply in this section.

    Part X.

    Makes organizational and clarifying changes to GS 36C-5-505(c), subject to the Uniform Fraudulent Transfer Act, regarding permissible beneficiaries for certain irrevocable intervivos trusts.

    Part XI.

    Amends GS 36C-7-703 regarding the standard of liability of co-trustees. Deletes all of subsection (e1), which provided for the duty and liability of the excluded trustee when the terms of a trust conferred upon a co-trustee the power to take certain actions regarding the trust, including the authority to direct or prevent certain actions of the trustees. Identifies the co-trustee upon whom the power is conferred to the exclusion of other co-trustees as a directed co-trustee. Enacts a new subsection (g1) and amends subsection (h) to clarify the fiduciary responsibilities of the directed co-trustee and provides for the limitations in liability on the part of the excluded co-trustee.

    Directs the Revisor of Statutes to have printed, as annotations to the published General Statutes, all relevant portions of the Official Commentary to the Uniform Powers of Appointment Act and of the Official Commentary to the Uniform Trust Code an all explanatory comments of the drafters of those acts, as the Revisor deems appropriate.

    Parts VII, VIII, IX, X, and XI become effective October 1, 2015, and apply to all (1) trusts created before, on, or after that date; (2) all judicial proceedings concerning trusts or transfers to or by trusts commenced on or after that date; and (3) all judicial proceedings concerning trusts or transfers or by trusts begun before that date, unless the court finds that application of a particular provision of these sections would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the law as it existed on September 30, 2015 applies. Except as otherwise indicated, the remainder of this act is effective when it becomes law.


  • Summary date: Mar 18 2015 - More information

    To be summarized.


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