NORTH CAROLINA GENERAL ASSEMBLY

1963 SESSION

 

 

CHAPTER 941

SENATE BILL 212

 

 

AN ACT TO AMEND G.S. 105-2 SO AS TO CLARIFY THE PROVISIONS RELATING TO POWERS OF APPOINTMENT.

 

The General Assembly of North Carolina do enact:

 

Section 1.  G.S. 105-2 is hereby amended by changing the comma (,) following the figures "1939" in line 8 of numbered paragraph (4) of said Section to a period (.) and striking out the remainder of said paragraph.

Sec. 2.  G.S. 105-2 is hereby further amended by rewriting numbered paragraph (5) thereof to read as follows:

"(5)      For purposes of this Article, the term 'general power of appointment' means a power which is exercisable in favor of the decedent, his estate, his creditors or the creditors of his estate; except that a power to consume, invade or appropriate property for the benefit of the decedent which is limited by an ascertainable standard relating to the health, education, support, or maintenance of the decedent shall not be deemed a general power of appointment. Whenever any person shall have a general power of appointment with respect to any interest in property, such person shall for the purposes of this Article be deemed the owner of such interest, and accordingly:

a.         If in connection with any transfer of property taxable under this Article the transferor shall give to any person a general power of appointment with respect to any interest in such property, the transferor shall be deemed to have given such interest in such property to such person.

b.         If any person holding a general power of appointment with respect to any interest in property shall exercise such power in favor of any other person or persons, either by will or by an appointment made in contemplation of the death of such person, or by an appointment intended to take effect in possession or enjoyment at or after such death, he shall be deemed to have made a transfer of such interest to such person or persons.

c.         If any person holding a general power of appointment with respect to any interest in property shall relinquish such power by any action taken in contemplation of death or intended to take effect at or after his death, or shall die without fully exercising such power, he shall be deemed, to the extent of such relinquishment or nonexercise, to have made a transfer of such interest to the person or persons who shall benefit thereby."

Sec. 3.  G. S. 105-2 is hereby further amended by rewriting numbered paragraph (6) thereof to read as follows:

"(6)      Neither the exercise nor the relinquishment of a special power of appointment (which shall mean any power other than a general power) with respect to an interest in property shall be deemed to constitute a transfer of such interest within the meaning of this Article. If in connection with any transfer taxable under this Article the transferor shall give to any person a special power of appointment with respect to any interest in property, he shall be deemed, for the purpose of computing the tax applicable thereto, to have given such interest in equal shares to those persons, not more than two (2), among the possible appointees and takers in default of appointment whom the transferor's executor or administrator may designate as transferees in the inheritance tax return, except that:

a.         if a gift tax return is filed with respect to such transfer, the persons designated therein shall also be designated in the inheritance tax return, and

b.         the tax shall be computed according to the relationship of the donee of the power to the persons designated if the possible appointees and takers in default of appointment include any person more closely related to the donee of the power than to the donor, and if such computation would produce a higher tax."

Sec. 4.  All laws and clauses of laws in conflict with this Act are hereby repealed.

Sec. 5.  This Act shall be in full force and effect on and after July 1, 1963.

In the General Assembly read three times and ratified, this the 18th day of June, 1963.