Posted on December 27, 2007 by Greg Herman-Giddens

New North Carolina Trust Laws

In addition to the repeal of the rule against perpetuities, which is effective January 1, 2008 (perpetual trusts will be allowed in North Carolina provided certain requirements are met), there are a few other changes to North Carolina trust law, which were effective October 1, 2007:

  • Section 39-6.7 - Construction of Conveyances to or by Trusts.  This section creates a rule of construction that eliminates the problem that arises when property is conveyed to or from a trust rather than the trustee of the trust.
  • Section 36C-11-1104 - Trustee Signatures.  This provision was amended to provide that "...The signature of a trustee of a trust who signs a document for or on behalf of the trust shall be deemed to be the signature of the trustee of such.  A document which identifies a trust shall be deemed to include the trustee or the trustees as such."
  • Section 36C-6-602.1 - Deals with modification of revocable trusts by guardian or agent.  A general guardian or guardian of the estate may exercised the power of a settlor of a revocable trust as provided in G.S. 35A-1251(24).  Also provides that an agent under a power of attorney may exercise the following powers of a settlor to the extent expressly authorized by the terms of the trust or power of attorney as long as the act does not alter the designation of beneficiaries to receive property on the settlor's death under that settlor's existing estate plan: (1) Revocation of the trust; (2) Amendment of the trust; (3) Additions to the trust; (4) Direction to dispose of property of the trust; and (5) The creation of the trust, notwithstanding G.S. 36C04-402(a)(1) and (2).
  • Section 36C-6-605 - creates anti-lapse provisions for revocable trusts in the event of failure of beneficiaries.
  • Section 36C-6-606 - provides revocation of provisions in a revocable trust in favor of former spouse upon divorce or annulment.
  • New provisions have also been added regarding the class of beneficiaries who must consent to the modification or termination of trust.  The presumption of fertility is now rebuttable, so the court may limit the class to those who are reasonably likely to take. 

 

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Posted on December 16, 2007 by Greg Herman-Giddens

Avoid Probate of Equity Refunds from Continuing Care Communities

The Problem: Continuing care retirement communities have been growing in popularity with seniors for years.  Such communities usually require a "buy-in" upon admittance and many provide for a refund of a portion of the fee upon death.  The contracts (often called Residence and Care Agreements or the like) generally provide that the refund will be paid to the estate of the resident.  The trouble with this is that the refund triggers probate even if there are no other probate assets.  Since the refunds are often hundreds of thousands of dollars, unnecessary probate fees of $1,000 or more often result.

The Solution:  For those residents with living trusts, this can be avoided by a simple amendment to the Residence and Care Agreement that provides that the refund will be paid to the resident's living trust rather than his or her estate.  The amendment (or addendum, as some facilities call it) must be signed by the resident and the management of the facility.

For those residents without living trusts, the cost of having a trust prepared will generally be at least equaled by the probate cost savings alone, not to mention time and trouble avoided by escaping probate.

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Posted on December 10, 2007 by Greg Herman-Giddens

Worst Nursing Homes in U.S. - One is in NC

The U.S. government's Center for Medicare and Medicaid Services has released a report listing the poorest quality nursing homes in the country.  One is in North Carolina - Sunbridge Care and Rehab of the Triad in High Point, which has been poorly performing for 34 months!
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Posted on December 2, 2007 by Greg Herman-Giddens

History of the Estate Tax

This article discusses in brief the history of the federal estate tax and its effect on the U.S. budget. Also examined are the ways in which the economic behavior of the population affected by the estate tax has changed over time due to market, technological, and political stimuli.

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