Bill Summary for H 800 (2019-2020)

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Summary date: 

Apr 16 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
House Bill 800 (Public) Filed Tuesday, April 16, 2019
Intro. by Stevens, Zachary.

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Bill summary

Enacts Article 5, Tenancy by the Entirety, to GS Chapter 41. Recodifies the following statutes into the Article, as provided: GS 31A-5; GS 39-13.3(b) and (c); GS 39-13.5; GS 39-13.6(a), (b) and (c); GS 39-13.7; and GS 41-2.5. Defines conveyance, income, and spouses

Amends GS 41-56, GS 41-58, GS 41-59, GS 41-63, and GS 41-65 (was, GS 39-13.3, GS 39-13.6, GS 39-13.7, and GS 41-2.5) to change language from "husband and wife" and "husband or wife" in existing tenancy by the entirety provisions to "spouses" and "individual." 

Amends GS 41-56(a) (was, 39-13.6(b)) to provide that unless a contrary intention is expressed in the conveyance (currently, no provision providing for contrary intention expressed in the conveyance to control), a conveyance of real property, or any interest therein, to spouses vests title in them as tenants by the entirety when the conveyance is to a named individual and wife, or a named individual and husband, or a named individual and spouse (currently, a named individual and spouse is not included in language creating a tenancy by the entirety) or two named individuals, married to each other at the time of conveyance, whether or not identified in the conveyance as being husband and wife, spouses, or married to each other, if at the time of the conveyance they are legally married to each other. Amends GS 41-56(b) (was, 39-13.3(b)) to provide that the joinder of a spouse in a conveyance made by the grantor is not necessary but the conveyance is subject to the provisions of GS 52-10 (contracts between husband and wife) and GS 52-11 (antenuptual contracts and torts) except that acknowledgment of the spouse of the grantor is not necessary. Makes further clarifying, technical, and conforming changes to GS 41-46(c) and (d) (was, GS 39-13.5 and GS 41-2.5). Eliminates the provision in GS 41-56(d) that provides that law relating to estate or inheritance taxes is not repealed or modified by the language.

Enacts GS 41-57 to establish that when an individual furnishing consideration for real property causes title to be placed in the name of the individual and the individual's spouse, a presumption is created of a gift to the individual's spouse of an entirety interest. Provides for rebutting the presumption by clear, cogent, and convincing evidence. Excepts from the presumption instances of equitable distribution under GS 50-20 and GS 50-21.

Amends GS 41-58 (was, GS 39-13.6(a)) to prohibit either spouse from signing or paying out property held by them as tenants by the entirety without joinder of the other spouse. Adds that the mortgage or sale of an interest in real property held by spouses as tenants by the entirety where one or both spouses is incompetent is governed by the provisions of Article 15 of GS Chapter 35A. Makes conforming and clarifying changes. 

Amends GS 41-59 (was, GS 39-13.6(c)) to make technical and clarifying changes. Adds that income derived from property held by spouses as tenants by the entirety becomes personal property held by the spouses as tenants in common in equal shares. 

Enacts GS 41-60 to prohibit property held by spouses as tenants by the entirety from being held liable for individual debts or subject to individual judgment liens. Provides that the property is liable for obligations of both spouses and subject to a judgment lien against both spouses. Clarifies liabilities upon termination of tenancy by the entirety upon (1) divorce of the spouses, which converts the estate to a tenancy in common, allowing a judgment lien against the spouse which is still alive and unsatisfied to attach at that time to the spouse's undivided interest or (2) upon death of a spouse, which gives the surviving spouse the entire legal title, allowing a judgment lien against that spouse which is still alive and unsatisfied to attach at that time to the property. 

Enacts GS 41-61 providing that neither spouse is entitled to reimbursement of expenditures made on the property while the tenancy by the entirety exists. 

Enacts GS 41-62 providing that an insurance policy and proceeds on property held as tenants by the entirety inure to the benefit of the entire estate regardless of policy issuance or payment, unless the parties by contract have provided for another disposition, and the proceeds become divisible personal property held by the spouses as tenants in common.

Amends GS 41-63 (was, GS 39-13.3(4)) to make conforming and clarifying changes regarding termination of the tenancy by the entirety by conveyance from one spouse to another. Additionally provides for five events, other than death of a spouse, which terminates a tenancy by the entirety, including the voluntary sale and conveyance, voluntary partition by joint instrument, involuntary transfers, absolute divorce, and a judgement of forfeiture ordering divestment.

Enacts GS 41-64 to provide a general rule that upon death of a spouse, property held as tenants by the entirety belongs to the surviving spouse by right of purchase under the original grant or device and by virtue of survivorship. Specifies that the deceased spouse has no estate which is descendable or divisible. Modifies the slayer exception (was, GS 31A-5) to define slayer as the term is defined in GS 31A-3(3). Makes clarifying changes. 

Amends GS 41-65 (was, GS 39-13.7), concerning real property conveyed to trusts, to make conforming, clarifying, and technical changes. Adds that notice can be given in a statement of conveyance of the tenancy by the entireties real property to the trust that the real property is held under the statute and that, as of the date of the conveyance, the requirements are met providing for the application of GS 41-60(a)(1), as enacted, protecting the real property from liability for the individual debts of either spouse. Allows a person entering into a transaction involving real property held in trust under the statute to request confirmation from the trustee whether the provisions of GS 41-60(a)(1) are met at the time of the transaction. 

Amends GS 30-15 by adding that the surviving spouse may claim the allowance if, at the decedent's death, either the decedent or the surviving spouse was a resident of the state.