North Carolina Statutes

Chapter 36C North Carolina Uniform Trust Code

Article 1 - General Provisions and Definitions.

  • § 36C-1-101   Short title
    This Chapter may be cited as the North Carolina Uniform Trust Code. (2005‑192, s. 2.)
  • § 36C-1-102   Scope
    This Chapter applies to any express trust, private or charitable, with additions to the trust, wherever and however created. The term "express trust" includes both...
  • § 36C-1-103   Definitions
    The following definitions apply in this Chapter: (1) Action. When applicable to an act of a trustee, includes a failure to act. (2) Ascertainable standard....
  • § 36C-1-104   Knowledge
    (a) Subject to subsection (b) of this section, a person has knowledge of a fact if the person: (1) Has actual knowledge of it; (2)...
  • § 36C-1-105   Default and mandatory rules
    (a) Except as otherwise provided in the terms of the trust, this Chapter governs the duties and powers of a trustee, relations among trustees, and...
  • § 36C-1-106   Common law of trusts; principles of equity
    The common law of trusts and principles of equity supplement this Chapter, except to the extent modified by this Chapter or another statute of this...
  • § 36C-1-107   Governing law
    (a) The meaning and effect of the terms of a trust are determined by any of the following: (1) The law of the jurisdiction designated...
  • § 36C-1-108   Principal place of administration
    (a) Without precluding other means for establishing a sufficient connection with the designated jurisdiction, terms of a trust designating the principal place of administration are...
  • § 36C-1-109   Methods and waiver of notice
    (a) Subject to subsection (d) of this section, notice to a person under this Chapter or the sending of a document to a person under...
  • § 36C-1-110   Others treated as qualified beneficiaries
    (a) A charitable organization expressly designated to receive distributions under the terms of a charitable trust has the rights of a qualified beneficiary under this...
  • § 36C-1-111   Nonjudicial settlement agreements
    (a) For purposes of this section, "interested persons" means persons whose consent would be required in order to achieve a binding settlement were the settlement...
  • § 36C-1-112   Rules of construction
    The rules of construction that apply in this State to the interpretation of and disposition of property by will also apply as appropriate to the...

Article 2 - Judicial Proceedings.

  • § 36C-2-201   Role of court in administration of trust
    (a) The court may intervene in the administration of a trust to the extent its jurisdiction is invoked by a party or as provided by...
  • § 36C-2-202   Jurisdiction over trustee and beneficiary
    (a) By accepting the trusteeship of a trust having its principal place of administration in this State, or by moving the principal place of administration...
  • § 36C-2-203   Subject matter jurisdiction
    (a) The clerks of superior court of this State have original jurisdiction over all proceedings concerning the internal affairs of trusts. Except as provided in...
  • § 36C-2-204   Venue
    In any trust proceeding, whether brought before the clerk of superior court or the superior court division of the General Court of Justice, the following...
  • § 36C-2-205   Commencement of proceedings, pleadings, consolidation, and joinder
    (a) Contested Proceedings. Trust proceedings before the clerk of superior court brought against adverse parties shall be commenced as is prescribed for civil actions. Upon...
  • § 36C-2-206   Representation of parties
    (a) Notwithstanding any other applicable rule of the Rules of Civil Procedure or provision of Chapter 1 of the General Statutes, in any trust proceeding,...
  • § 36C-2-207   Waiver of notice
    A party, or the representative of the party as provided in G.S. 36C‑2‑206, may waive notice by a writing signed by the party, the representative,...
  • § 36C-2-208   Accounting to clerk
    (a) No trustee, including a trustee appointed by the clerk of superior court, is required to account to the clerk of superior court unless the...
  • § 36C-2-209   Qualification and accounting of trustee of a testamentary trust
    (a) For any testamentary trust created under a will of a decedent executed before January 1, 2004, the trustee shall first qualify under the laws...

Article 3 - Representation.

Article 4 - Creation, Validity, Modification, and Termination of Trust.

Article 4A - Tax Status of Charitable Trusts.

  • § 36C-4A-1   Prohibited transactions
    (a) Notwithstanding any provisions in the laws of this State or in the governing instrument to the contrary unless otherwise decreed by a court of...
  • § 36C-4A-2   Reformation of charitable remainder trust
    If a federal estate tax deduction is not allowable at the time of a decedent's death because of the failure of an interest in property...

Article 4B - Charitable Remainder Trust Administration Act.

Article 5 - Creditors' Claims; Spendthrift and Discretionary Trusts.

  • § 36C-5-501   Rights of beneficiary's creditor or assignee
    (a) Except as provided in subsection (b) of this section, the court may authorize a creditor or assignee of the beneficiary to reach the beneficiary's...
  • § 36C-5-502   Spendthrift provision
    (a) A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer of a beneficiary's interest. (b) A term of a trust...
  • § 36C-5-503   Exceptions to spendthrift provision
    (a) As used in this section, the term "child" includes any person for whom an order or judgment for child support has been entered in...
  • § 36C-5-504   Discretionary trusts; effect of standard
    (a) In this section: (1) "Child" includes any person for whom an order or judgment for child support has been entered in this or another...
  • § 36C-5-505   Creditor's claim against settlor
    (a) Subject to the other applicable law, whether or not the terms of a trust contain a spendthrift provision or the interest in the trust...
  • § 36C-5-506   Overdue distribution
    (a) In this section, "mandatory distribution" means a distribution of income or principal that the trustee is required to make to a beneficiary under the...
  • § 36C-5-507   Personal obligations of trustee
    Trust property is not subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt. (2005‑192, s. 2.)
  • § 36C-5-508   Protective trusts
    Except with respect to an interest retained by the settlor, a "protective trust interest" means an interest in a trust in which the terms of...

Article 6 - Revocable Trusts.

Article 7 - Office of Trustee.

  • § 36C-7-701   Accepting or declining trusteeship
    (a) Except as otherwise provided in subsection (c) of this section, a person designated as trustee accepts the trusteeship: (1) By substantially complying with a...
  • § 36C-7-702   Trustee's bond
    (a) A trustee shall provide bond to secure the performance of the trustee's duties if: (1) The trust instrument was executed before January 1, 2006,...
  • § 36C-7-703   Cotrustees
    (a) Cotrustees who are unable to reach a unanimous decision may act by majority decision if more than two are serving. Unanimity is required when...
  • § 36C-7-704   Vacancy in trusteeship; appointment of successor
    (a) A vacancy in a trusteeship occurs if: (1) A person designated as trustee rejects the trusteeship; (2) A person designated as trustee cannot be...
  • § 36C-7-705   Resignation of trustee
    (a) A trustee may resign: (1) Upon at least 30 days' notice in writing to the qualified beneficiaries, the settlor, if living, and all cotrustees;...
  • § 36C-7-706   Removal of trustee
    (a) For the reasons set forth in subsection (b) of this section, the settlor of an irrevocable trust, a cotrustee of an irrevocable trust, or...
  • § 36C-7-707   Delivery of property by former trustee
    (a) Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other...
  • § 36C-7-708   Compensation of trustee
    (a) If the terms of a trust do not specify the trustee's compensation, a trustee is entitled to compensation determined in accordance with Article 6...
  • § 36C-7-709   Reimbursement of expenses
    A trustee is entitled to be reimbursed out of the trust property for expenses properly incurred in the administration of the trust as provided in...

Article 8 - Duties and Powers of Trustee.

  • § 36C-8-801   Duty to administer trust
    Upon acceptance of a trusteeship, a trustee shall administer the trust in good faith, in accordance with its terms and purposes and the interests of...
  • § 36C-8-802   Duty of loyalty
    (a) A trustee shall administer the trust solely in the interests of the beneficiaries. (b) Subject to the rights of persons dealing with or assisting...
  • § 36C-8-803   Impartiality
    If a trust has two or more beneficiaries, the trustee shall act impartially in investing, managing, and distributing the trust property, giving due regard to...
  • § 36C-8-804   Prudent administration
    A trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust. In...
  • § 36C-8-805   Cost of administration
    In administering a trust, the trustee may incur only costs that are reasonable in relation to the trust property, the purposes of the trust, and...
  • § 36C-8-806   Trustee's skills
    A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or...
  • § 36C-8-807   Delegation by trustee
    (a) A trustee may delegate duties and powers that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise...
  • § 36C-8-808   Powers to direct
    (a) While a trust is revocable, the trustee may follow a direction of the settlor that is not authorized by or is contrary to the...
  • § 36C-8-809   Control and protection of trust property
    A trustee shall take reasonable steps to take control of and protect the trust property. (2005‑192, s. 2.)
  • § 36C-8-810   Record keeping and identification of trust property
    (a) A trustee shall keep adequate records of the administration of the trust. (b) A trustee shall keep trust property separate from the trustee's own...
  • § 36C-8-811   Enforcement and defense of claims
    A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust. (2005‑192, s. 2.)
  • § 36C-8-812   Collecting trust property
    A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee and to redress a...
  • § 36C-8-813   Duty to inform and report
    (a) The trustee is under a duty to do all of the following: (1) Provide reasonably complete and accurate information as to the nature and...
  • § 36C-8-814   Discretionary powers; tax savings
    (a) Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of terms such as "absolute", "sole",...
  • § 36C-8-815   General powers of trustee
    (a) A trustee, without authorization by the court, may exercise any of the following: (1) Powers conferred by the terms of the trust. (2) Except...
  • § 36C-8-816   Specific powers of trustee
    Without limiting the authority conferred by G.S. 36C‑8‑815, a trustee may: (1) Collect and control trust property and accept or reject additions to the trust...
  • § 36C-8-817   Distribution upon termination
    Upon the occurrence of an event terminating or partially terminating a trust, the trustee shall proceed expeditiously to distribute the trust property to the persons...

Article 9 - Uniform Prudent Investor Act.

  • § 36C-9-901   Prudent investor rule; applicability
    (a) Except as otherwise provided in subsection (b) of this section, a trustee who invests and manages trust assets owes a duty to the beneficiaries...
  • § 36C-9-902   Standard of care; portfolio strategy; risk and return objectives
    (a) A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of...
  • § 36C-9-903   Diversification
    A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are...
  • § 36C-9-903.1   Duties as to life insurance
    (a) Notwithstanding the provisions of this Article, the duties of a trustee with respect to acquiring or retaining a contract of insurance upon the life...
  • § 36C-9-904   Duties at inception of trusteeship
    Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning...
  • § 36C-9-905   Reviewing compliance
    Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee's decision or action...
  • § 36C-9-906   Effect on charitable remainder trusts
    Nothing in this Article shall prevent the application of Article 4B of this Chapter to a "charitable remainder trust" as defined in G.S. 36C‑4B‑3(1). (1999‑215,...
  • § 36C-9-907   Short title
    This Article may be cited as the "North Carolina Uniform Prudent Investor Act." (1999‑215, s. 1; 2005‑192, s. 2.)

Article 10 - Liability of Trustees and Rights of Persons Dealing with Trustees.

  • § 36C-10-1001   Remedies for breach of trust
    (a) A violation by a trustee of a duty the trustee owes under a trust is a breach of trust. (b) To remedy a breach...
  • § 36C-10-1002   Damages for breach of trust
    (a) A trustee who commits a breach of trust is liable for the greater of: (1) The amount required to restore the value of the...
  • § 36C-10-1003   Liability in absence of breach
    (a) A trustee is accountable for any profit made by the trustee arising from the administration of the trust, even absent a breach of trust....
  • § 36C-10-1004   Attorneys' fees and costs
    In a judicial proceeding involving the administration of a trust, the court may award costs and expenses, including reasonable attorneys' fees, as provided in the...
  • § 36C-10-1005   Limitation of action against trustee
    (a) No proceeding against a trustee for breach of trust may be commenced more than five years after the first to occur of: (i) the...
  • § 36C-10-1006   Reliance on trust instrument
    A trustee who acts in reasonable reliance on the terms of the trust as expressed in a trust instrument is not liable for a breach...
  • § 36C-10-1007   Event affecting administration or distribution
    If the happening of an event, including marriage, divorce, performance of educational requirements, or death, affects the administration or distribution of a trust, a trustee...
  • § 36C-10-1008   Exculpation of trustee
    A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it relieves the trustee of...
  • § 36C-10-1009   Beneficiary's consent, release, or ratification
    (a) A trustee is not liable to a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the breach, released the...
  • § 36C-10-1010   Limitation on personal liability of trustee
    (a) Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee's fiduciary capacity...
  • § 36C-10-1011   Interest as general partner
    (a) Except as otherwise provided in subsection (c) of this section or unless personal liability is imposed in the contract, a trustee who holds, in...
  • § 36C-10-1012   Protection of person dealing with trustee
    (a) A person other than a beneficiary who in good faith assists a trustee, or who in good faith and for value deals with a...
  • § 36C-10-1013   Certification of trust
    (a) Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish to the person a...

Article 11 - Miscellaneous Provisions.

  • § 36C-11-1101   Uniformity of application and construction
    In applying and construing this Chapter, consideration may be given to the need to promote uniformity of the law with respect to its subject matter...
  • § 36C-11-1102   Electronic records and signatures
    The provisions of this Chapter governing the legal effect, validity, or enforceability of electronic records or electronic signatures, and of contracts formed or performed with...
  • § 36C-11-1103   Severability clause
    If any provision of this Chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or...
  • § 36C-11-1104   Trustee signatures
    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...
  • § 36C-11-1105   Reserved for future codification purposes
  • § 36C-11-1106   Application to existing relationships
    (a) Except as otherwise provided in this Chapter, this Chapter applies to (i) all trusts created before, on, or after January 1, 2006; (ii) all...