Category: Trusts

New North Carolina Trust Laws

Posted on: December 27th, 2007
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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