GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2009
SESSION LAW 2009-48
HOUSE BILL 800
AN ACT TO AMEND THE LAW RELATING TO RENUNCIATIONS AND TO MAKE RELATED AMENDMENTS TO THE NORTH CAROLINA UNIFORM TRUST CODE AND THE LAW GOVERNING POWERS OF ATTORNEY AND ADMINISTRATION OF DECEDENTS' ESTATES, AS RECOMMENDED BY THE GENERAL STATUTES COMMISSION.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 31B-1 reads as rewritten:
"§ 31B-1. Right to renounce succession.
(a) A person who succeeds to a property interest as:
(1) Heir, or Heir;
(2) Next of kin,
or kin;
(3) Devisee, or
Devisee;
(4) Legatee, or
Legatee;
(4a) Donee;
(5) Beneficiary of a
life insurance policy who did not possess the incidents of ownership under the
policy at the time of death of the insured, or insured;
(6) Person
succeeding to a renounced interest, or interest;
(7) Beneficiary
under a testamentary trust or under an inter vivos trust, or trust;
(8) Appointee under
a power of appointment exercised by a testamentary instrument or a
nontestamentary instrument, or instrument;
(9) Repealed by Session Laws 1989, c. 684, s. 2.
(9a) Surviving joint tenant,
surviving tenant by the entireties, or surviving tenant of a tenancy with a
right of survivorship, or survivorship;
(9b) Person entitled to share in
a testator's estate under the provisions of G.S. 31-5.5, or G.S. 31-5.5;
(9c) Beneficiary under any other testamentary or nontestamentary instrument, including a beneficiary under:
a. Any qualified or nonqualified deferred compensation, employee benefit, retirement or death benefit, plan, fund, annuity, contract, policy, program or instrument, either funded or unfunded, which is established or maintained to provide retirement income or death benefits or results in, or is intended to result in, deferral of income;
b. An individual retirement account or individual retirement annuity; or
c. Any
annuity, payable on death, death account, or other right to death
benefits arising under contract; or contract;
(9d) The duly Duly
authorized or appointed guardian of any of the persons listed in subdivisions
(1) through (9c) of this subsection, but only with the prior or subsequent
approval of the clerk of superior court, or if required, of the resident
judge of the superior court, of any of the above. pursuant to a
proceeding or action instituted in accordance with and subject to the
requirements of G.S. 31B-1.2; or
(9e) Subject to G.S. 31B-1.1 and G.S. 31B-1.2, fiduciary, including a trustee of a charitable trust, an attorney-in-fact of any of the persons listed in subdivisions (1) through (9e) of this subsection if expressly authorized by the governing power of attorney, and a personal representative appointed under Chapter 28A of the General Statutes of any of the persons listed in subdivisions (1) through (9c) of this subsection;
(10) The personal
representative appointed under Chapter 28A of any of the above,
or the attorney-in-fact of any of the above may renounce at
anytime, in whole or in part part, the right of succession to
any property or interest therein, including a future interest, by filing a
written instrument under the provisions of this Chapter. A renunciation may be
of a fractional share or any limited interest or estate. The renunciation
shall be deemed to include the entire interest of the person whose property or
interest is being renounced unless otherwise specifically limited. A person may
renounce any interest in or power over property, including a power of
appointment, even if its creator imposed a spendthrift provision or similar
restriction on transfer or a restriction or limitation on the right to
renounce. Provided, however, Notwithstanding the foregoing,
there shall be no right of partial renunciation if the decedent or donee of
the power expressly so provided in the instrument creating the interest.interest
expressly so provides.
(b) This Chapter shall apply to all renunciations of present and future interests, whether qualified or nonqualified for federal and State inheritance, estate, and gift tax purposes, unless expressly provided otherwise in the instrument creating the interest.
(c) The instrument of
renunciation shall (i) identify the transferor of the property or
interest in the property or the creator of the power or the holder of the
power, (ii) describe the property or interest renounced, (ii) (iii)
declare the renunciation and extent thereof, (iii) and (iv) be
signed and acknowledged by the person authorized to renounce. renouncing.
(d) A parent of a minor for whom no general guardian or guardian of the estate has been appointed may renounce, in whole or in part, an interest in or power over property (including a power of appointment) that would have passed to the minor as the result of that parent's renunciation. The parent may renounce the interest or power even if its creator imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to renounce."
SECTION 2. G.S. 31B-1A is recodified as G.S. 31B-1.1. G.S. 31B-1.1, as recodified by this section, reads as rewritten:
"§ 31B-1.1.
Right to renounce fiduciary powers. Right of fiduciary to renounce.
(a) Except as
otherwise provided in the testamentary or nontestamentary instrument, a
fiduciary under a testamentary or nontestamentary instrument may renounce, in
whole or in part, fiduciary rights, privileges, powers, and immunities by
executing and by delivering, filing, or recording a written renunciation
pursuant to the provisions of G.S. 31B-2. A immunities; however, a
fiduciary may not renounce the rights of beneficiaries personal rights
exercisable by a beneficiary alone, unless the instrument creating the
fiduciary relationship authorizes such a renunciation. The instrument of
renunciation shall (i) identify the creator of the rights, powers, privileges,
or immunities, (ii) describe any right, power, privilege, or immunity
renounced, (iii) declare the renunciation and the extent thereof, and (iv) be
signed and acknowledged by the fiduciary authorized to renounce.
(b) The
instrument of renunciation shall (i) describe any fiduciary right, power,
privilege, or immunity renounced, (ii) declare the renunciation and the extent
thereof, and (iii) be signed and acknowledged by the fiduciary authorized to
renounce. Except as provided in subsection (c) of this section and
except to the extent a statute of this State expressly restricts or limits a
fiduciary's right to renounce, a fiduciary acting in a fiduciary capacity may
renounce the right of succession to any property or interest therein as
permitted by this Chapter, even if the testamentary or nontestamentary
instrument governing the fiduciary restricts or limits the right to renounce
the fiduciary's right of succession to the property or interest therein.
(c) An attorney-in-fact for a principal acting under subsection (a) or subsection (b) of this section may renounce only if expressly authorized by the governing power of attorney."
SECTION 3. Chapter 31B of the General Statutes is amended by adding a new section to read:
"§ 31B-1.2. Right of fiduciary to institute a proceeding for review of renunciation.
(a) Prior to renouncing, if a fiduciary so elects, the fiduciary may institute a proceeding by petition before the clerk of court for a determination as to whether a renunciation would be compatible with the fiduciary's duties. Commencement of the proceeding, jurisdiction, venue, parties, representation, and notice shall be governed by Chapter 36C of the General Statutes. In addition to any other notice requirements, notice of the proceeding shall be given to all persons entitled to delivery of a copy of an instrument of renunciation under G.S. 31B-2.1.
(b) After renouncing, if a fiduciary so elects, the fiduciary has a right to institute a declaratory judgment action pursuant to Article 26 of Chapter 1 of the General Statutes for a determination as to whether the renunciation is compatible with the fiduciary's duties. In addition to any other notice requirements, notice of the action shall be given to all persons entitled to delivery of a copy of an instrument of renunciation under G.S. 31B-2.1.
(c) A proceeding or action instituted under this section shall comply with all of the following:
(1) The petition or complaint shall state the basis for the fiduciary's allegation that the renunciation is compatible with the fiduciary's duties, considering among other things the intended purposes of the trust or other instrument and the impact of the renunciation on beneficiaries and potential beneficiaries. A petition or complaint filed by a trustee of a charitable trust shall contain a statement that a copy of the petition or complaint is being provided to the Attorney General.
(2) After considering among other things the intended purposes of the trust or other instrument and the impact of the renunciation on beneficiaries and potential beneficiaries, the court shall enter an order stating the court's determination as to whether the renunciation is compatible with the fiduciary's duties.
(d) The effectiveness of a renunciation is not affected by a determination under this section that the renunciation is not compatible with a fiduciary's duties."
SECTION 4. G.S. 31B-2 reads as rewritten:
"§ 31B-2. Time
and place of filing renunciation.Filing and registering of
renunciations; failure to file or register; spouse's interest.
(a) To be a
qualified disclaimer for federal and State inheritance, estate, and gift tax
purposes, an instrument renouncing a present interest of renunciation
shall be filed within the time period required under the applicable federal
statute for a renunciation to be given effect as a disclaimer for federal
estate and gift tax purposes. If there is no such federal statute the
instrument shall be filed not later than nine months after the date the
transfer of the renounced interest to the renouncer person whose
property or interest is being renounced was complete for the purpose of
such taxes.
(b) An
instrument renouncing a future interest shall be filed not later than six
months after the event by which the taker of the property or interest is
finally ascertained and his interest indefeasibly vested and he is entitled to
possession even though such renunciation may not be recognized as a disclaimer
for federal estate tax purposes. When a renunciation of real property or
an interest in real property is made within the time period required under
subsection (a) of this section, the spouse of the person whose property or
interest is being renounced is not required to join in the execution of the
instrument of renunciation, and, as provided in G.S. 31B-3(a)(1), the
spouse has no statutory dower, inchoate marital rights, elective share, or any
other marital interest in the real property or real property interest
renounced.
(c) The renunciation
shall be is effective when filed with the clerk of court of
(i) in the county in which court proceedings have been commenced
for the administration of the estate of the deceased owner or deceased donee
creator of the power or, if they have not been commenced, in which
they could be commenced. A copy of the renunciation shall be delivered in
person or mailed by registered or certified mail to any personal
representative, or other fiduciary of the decedent or donee of the power. If
the property interest renounced includes any proceeds of a life insurance
policy being renounced pursuant to G.S. 31B-1(a)(5) the person renouncing
shall mail, by registered or certified mail, a copy of the renunciation to the
insurance company issuing the policy. If the property or property interest
renounced is created by nontestamentary instrument, a copy of the renunciation
shall be delivered in person, or mailed by registered or certified mail, to the
trustee or other person who has legal title to, or possession of, the property
or property interest renounced. or holder of the power; or (ii) if
proceedings have not been commenced, then in a county in which they could be
commenced; or (iii) in all other cases, in a county with a court that has
jurisdiction to enforce the terms of the instrument creating the interest
renounced. In those cases in which an estate proceeding has not been commenced,
the renunciation shall be filed as an estate matter. In addition to the above
requirements, a renunciation of real property, or an interest therein, shall be
registered in accordance with the provisions of subsection (d) of this section.
(d) If real
property or an interest therein is renounced, a copy of the instrument
of renunciation shall also be filed for recording in the office of the
register of deeds of all counties wherein any part of the interest renounced is
situated. registered as provided in G.S. 47-18 or G.S. 47-20.
The instrument of renunciation shall be indexed in the grantor's index
under (i) the name of the deceased owner transferor or donee
creator of the power, power or holder of the power, and
(ii) the name of the person renouncing. person whose property or
interest is being renounced. The renunciation of an interest, or a part
thereof, in real property shall not be effective to renounce such interest
until a copy of the renunciation is filed for recording in the office of the
register of deeds in the county wherein such interest or part thereof is
situated. A spouse of a person renouncing real property or an interest in real
property shall have no statutory dower, inchoate marital rights, or any other
interest in the real property or real property interest renounced.
Failure to file or register the instrument of renunciation does not affect the
effectiveness of the renunciation as between the person whose property or
interest is being renounced and persons to whom the property interest or power
passes by reason of the renunciation; however, record title to a renounced
interest in real property does not pass to persons receiving the renounced
interest by reason of the renunciation until the instrument of renunciation is
registered as provided in G.S. 47-18 or G.S. 47-20.
(e) If an instrument transferring an interest in or right, privilege, power, or immunity over property subject to a renunciation is required or permitted by law to be filed or registered, the instrument of renunciation may be so filed or registered. Failure to file or register the instrument of renunciation does not affect the effectiveness of the renunciation as between the person whose property or interest is being renounced and persons to whom the property interest or power passes by reason of the renunciation."
SECTION 5. Chapter 31B of the General Statutes is amended by adding a new section to read:
"§ 31B-2.1. Delivery to other persons of instrument of renunciation by the person renouncing.
(a) In this section:
(1) "Beneficiary designation" means an instrument, other than an instrument creating a trust, naming the beneficiary of:
a. An annuity or insurance policy;
b. An account with a designation for payment on death;
c. A security registered in beneficiary form;
d. A pension, profitsharing, retirement, or other employment-related benefit plan;
e. An individual retirement account or retirement annuity; or
f. Any other nonprobate transfer at death.
(2) "Deliver" means to deliver in person or to send, properly addressed, by first-class mail, telephonic facsimile transmission equipment, electronic mail, or third-party commercial carrier, or by any method permitted by G.S. 1A-1, Rule 4.
(b) The failure to deliver a copy of an instrument of renunciation by a method permitted by G.S. 1A-1, Rule 4, or by a method that results in actual receipt tolls any statute of limitations with regard to any right of action for breach of fiduciary duty.
(c) If a fiduciary renounces an interest in property pursuant to G.S. 31B-1(a)(9e), a copy of the instrument of renunciation shall be delivered to each living person whose beneficial interest is affected by the renunciation and to any co-fiduciary who did not join in the renunciation.
(d) In the case of an interest created under the law of intestate succession or an interest created by will, other than an interest in a testamentary trust, a copy of the instrument of renunciation must:
(1) Be delivered to the personal representative of the decedent's estate; or
(2) If no personal representative is then serving, be filed as an estate matter with a court having jurisdiction to appoint the personal representative.
(e) In the case of a beneficiary renouncing an interest in a testamentary trust, a copy of the instrument of renunciation must:
(1) Be delivered to the trustee then serving;
(2) If no trustee is then serving, be delivered to the personal representative of the decedent's estate; or
(3) If no personal representative or trustee is then serving, be filed as an estate matter with a court having jurisdiction to enforce the trust.
(f) In the case of a beneficiary renouncing an interest in an inter vivos trust, a copy of the instrument of renunciation must:
(1) Be delivered to the trustee then serving;
(2) Except as provided in subdivision (3) of this subsection, if no trustee is then serving, be filed as an estate matter with a court having jurisdiction to enforce the trust; or
(3) If the renunciation is made before the time the instrument creating the trust becomes irrevocable, be delivered to the settlor of the trust or the transferor of the interest.
(g) In the case of a beneficiary renouncing an interest created by a beneficiary designation made before the time the designation becomes irrevocable, a copy of the instrument of renunciation must be delivered to the person making the beneficiary designation.
(h) In the case of a beneficiary renouncing an interest created by a beneficiary designation made after the time the designation becomes irrevocable, a copy of the instrument of renunciation must be delivered to the person obligated to distribute the interest.
(i) In the case of a renunciation by a surviving holder of an interest in property subject to a right of survivorship, a copy of the instrument of renunciation must be delivered to the persons to whom the person renouncing reasonably believes the renounced interest passes, at their last addresses known to the person renouncing, and to the personal representative of the deceased joint holder, if any.
(j) In the case of a renunciation by a permissible appointee, or taker in default of exercise, of a power of appointment at anytime after the power was created, a copy of the instrument of renunciation must be delivered:
(1) To the holder of the power;
(2) To the fiduciary acting under the instrument that created the power or, if no fiduciary is then serving under the instrument that created the power, filed as an estate matter with a court having authority to appoint the fiduciary; and
(3) To any holder of legal title to the property subject to the power of appointment other than the fiduciary.
(k) In the case of a renunciation by an appointee of an exercised power of appointment, a copy of the instrument of renunciation must be delivered:
(1) To the holder of the power or the personal representative of the holder's estate;
(2) To the fiduciary under the instrument that created the power or, if no fiduciary is then serving under the instrument that created the power, filed as an estate matter with a court having authority to appoint the fiduciary; and
(3) To any holder of legal title to the property subject to the power of appointment other than the fiduciary.
(l) In the case of a renunciation of a power of appointment by the holder of the power, a copy of the instrument of renunciation must be delivered:
(1) To the fiduciary acting under the instrument that created the power or, if no fiduciary is then serving under the instrument that created the power, filed as an estate matter with a court having authority to appoint the fiduciary; and
(2) To any holder of legal title to the property subject to the power of appointment other than the fiduciary.
(m) In the case of a renunciation by a fiduciary of a right, privilege, power, or immunity relating to a trust or estate, a copy of the instrument of renunciation must be delivered as provided in subsection (c), (d), (e), or (f) of this section, as if the power renounced were an interest in property.
(n) In the case of a renunciation of a power by an agent, including an attorney-in-fact, a copy of the instrument of renunciation must be delivered to the principal or the principal's legal representative other than the agent.
(o) In the case of a renunciation by a trustee of a charitable trust, a copy of the instrument of renunciation must be delivered to the North Carolina Attorney General in addition to any other delivery required by this section.
(p) In the case of a renunciation by a donee, a copy of the instrument of renunciation must be delivered to the persons to whom the person renouncing reasonably believes the renounced interest passes, at their last addresses known to the person renouncing, and to the donor or the donor's legal representative other than the donee.
(q) The failure to deliver a copy of the instrument of renunciation as required in this section does not affect the validity of the renunciation for purposes of G.S. 31B-3 even though the renunciation may not be recognized as a disclaimer for federal estate tax purposes."
SECTION 6. G.S. 31B-3 reads as rewritten:
"§ 31B-3. Effect of renunciation.
(a) Unless the decedent, donee of a power of appointment, or creator of an interest under an inter vivos instrument has otherwise provided in the instrument creating the interest, the property or interest renounced devolves as follows:
(1) If the
renunciation is filed within the time period described in G.S. 31B-2(a),
the property or interest renounced devolves and any interest that takes
effect in possession or enjoyment after the termination of the property or
interest renounced takes effect as if the renouncer person whose
property or interest is being renounced had predeceased the date the
transfer of the renounced interest to the renouncer was complete for
federal and State inheritance, estate, and gift tax purposes, or, in the case
of the renunciation of a fiduciary right, power, privilege, or immunity, the
property or interest subject to the power devolves as if the fiduciary right,
power, privilege, or immunity never existed. Any such renunciation relates back
for all purposes to the date the transfer of the renounced interest to the
renouncer was complete for the purpose of those taxes. taxes, and
the spouse of the person whose property or interest is being renounced has no
elective share or other marital interest in the renounced property.
(2) If the
renunciation is not filed within the time period described in G.S. 31B-2(a),
the person whose property or interest is being renounced is deemed to have
made a transfer of the property or interest and the property or interest
devolves and any interest that takes effect in possession or enjoyment after
the termination of the property or interest renounced takes effect as if
the renouncer person whose property or interest is being renounced had
died on the date the renunciation is filed, or, in the case of the renunciation
of a fiduciary right, power, privilege, or immunity, the property or interest
subject to the power devolves as if the fiduciary right, power, privilege, or
immunity ceased to exist as of the date the renunciation is filed.
(3) Any future
interest that takes effect in possession or enjoyment after the termination of
the estate or interest renounced takes effect as if the renouncer person
whose property or interest is being renounced had died on the date
determined under subdivision (1) or (2) of this subsection, and upon the filing
of the renunciation the persons in being as of the time the renouncer person
whose property or interest is being renounced is deemed to have died will
immediately become entitled to possession or enjoyment of any such future
interest.
(b) In the event
that the property or interest renounced was created by testamentary
disposition, the devolution of the property or interest renounced shall be governed
by G.S. 31-42(a) as provided in G.S. 31-42 notwithstanding
that in fact the renouncer person whose property or interest is being
renounced has not actually died before the testator.
(c) In the event
that the decedent dies intestate, or the ownership or succession to property or
to an interest is to be determined as though a decedent had died intestate, and
the renouncer person whose property or interest is being renounced
has living issue who would have been entitled to an interest in the property or
interest if the renouncer person whose property or interest is being
renounced had predeceased the decedent, then the property or interest
renounced shall be distributed to such issue, per stirpes. If the renouncer
person whose property or interest is being renounced does not have such
issue, then the property or interest shall be distributed as though the renouncer
person whose property or interest is being renounced had predeceased the
decedent.
(d) In the event that the property or interest renounced was created by a revocable or irrevocable inter vivos trust, the devolution of the property or interest renounced shall be as provided in G.S. 36C-6-605 notwithstanding that in fact the person whose property or interest is being renounced has not actually died before the event that would otherwise cause the property or interest renounced to pass to the person whose property or interest is being renounced.
(e) If a trustee files, within the time period described in G.S. 31B-2(a), a renunciation of an interest in property, the interest does not become trust property. If a trustee does not file a renunciation of an interest in property within the time period described in G.S. 31B-2(a), the interest passes to the person or persons who would have taken the interest as of the date of the renunciation if the trust had never existed.
(f) Except as provided in the instrument of renunciation, if a renunciation causes property to pass to a trust in which the person whose property or interest is being renounced holds a power of appointment, the person renouncing is deemed to have renounced the power of appointment with respect to assets passing into the trust by reason of the renunciation if the person renouncing is a person who holds a right to renounce the power of appointment.
(g) Unless otherwise provided in the instrument of renunciation, the interest in property being renounced by a surviving tenant by the entireties upon the death of the other tenant is deemed to be a one-half interest in the former entirety property, and title to that one-half interest passes as if the deceased tenant survived the tenant renouncing.
(h) Unless otherwise provided in the instrument of renunciation, the interest in property being renounced by a surviving joint tenant with right of survivorship is deemed to be the fractional interest of the deceased joint tenant to which the surviving joint tenant would have been entitled by right of survivorship, and title to that fractional interest passes as if the tenant renouncing predeceased the deceased joint tenant.
(i) Reserved for future codification purposes.
(j) Reserved for future codification purposes.
(k) A renunciation is binding upon the person whose property or interest is being renounced and all persons claiming through or under that person."
SECTION 7. G.S. 31B-4 reads as rewritten:
(a) The right to renounce property or an interest therein is barred by:
(1) An assignment, conveyance, encumbrance, pledge, or transfer of the property or interest, or a contract therefor by the person authorized to renounce,
(2) A written waiver of the right to renounce, or
(3) Repealed by Session Laws 1998-148, s. 4.
(4) A sale of the property or interest under judicial sale made before the renunciation is effected.
(b) The
renunciation or the written waiver of An instrument waiving or barring
the right to renounce is binding upon the renouncer or person waiving the
right to renounce or the person barred from renouncing and all persons
claiming through or under him. that person.
(c) A fiduciary's application for appointment or assumption of duties as fiduciary does not waive or bar the fiduciary's right to renounce a right, power, privilege, or immunity.
(d) No person shall be liable for distributing or disposing of property in reliance upon the terms of a renunciation that is invalid for the reason that the right of renunciation has been waived or barred, if the distribution or disposition is otherwise proper, and the person has no actual knowledge or record notice of the facts that constitute a waiver or bar to the right of renunciation.
(e) The right to renounce property or an interest in property pursuant to this Chapter is not barred by an acceptance of the property, interest, or benefit thereunder; provided, however, an acceptance of the property, interest, or benefit thereunder may preclude such renunciation from being a qualified renunciation for federal and State inheritance, estate, and gift tax purposes.
(f) An instrument waiving or barring the right to renounce an interest in real property is not effective as to persons protected under G.S. 47-18 or G.S. 47-20 until either (i) registered as provided in those sections or (ii) registered pursuant to a judicial sale proceeding as described in subdivision (4) of subsection (a) of this section in which the person renouncing is a party. The instrument of waiver or bar shall be indexed in the grantor's index under (i) the name of the transferor of the property or interest in the property or creator of the power or holder of the power and (ii) the name of the person whose renunciation is waived or barred."
SECTION 8. Chapter 31B of the General Statutes is amended by adding a new section to read:
"§ 31B-4.1. Tax qualified renunciation.
If, as a result of a renunciation, the renounced property is treated pursuant to the provisions of Title 26 of the United States Code, as now or hereafter amended, or any successor statute thereto, and the regulations promulgated thereunder, as never having been transferred to the person whose property or interest is being renounced, then the renunciation is an effective renunciation, notwithstanding any other provision of this Chapter. This section does not preclude an action for breach of fiduciary duty."
SECTION 9. G.S. 31B-6 is repealed.
SECTION 10. G.S. 28A-13-3 reads as rewritten:
"§ 28A-13-3. Powers of a personal representative or fiduciary.
(a) Except as qualified by express limitations imposed in a will of the decedent or a court order, and subject to the provisions of G.S. 28A-13-6 respecting the powers of joint personal representatives, a personal representative has the power to perform in a reasonable and prudent manner every act which a reasonable and prudent person would perform incident to the collection, preservation, liquidation or distribution of a decedent's estate so as to accomplish the desired result of settling and distributing the decedent's estate in a safe, orderly, accurate and expeditious manner as provided by law, including the powers specified in the following subdivisions:
…
(33) To renounce in
accordance with the provisions of Chapter 31B of the General Statutes.
(a1) Except as qualified by express limitations imposed in a will of the decedent, and subject to the provisions of G.S. 28A-13-6 respecting the powers of joint personal representatives, a personal representative shall have absolute discretion to make the election as to which items of the decedent's personal and household effects shall be excluded from the carry over basis provision of the federal income tax law and such election shall be conclusive and binding on all concerned.
(a2) Subject to the provisions of G.S. 28A-13-6 respecting the powers of joint personal representatives, a personal representative has the power to renounce in accordance with the provisions of Chapter 31B of the General Statutes.
(b) Any question
arising out of the powers conferred by subsections (a) and (a1) above (a),
(a1), and (a2) of this section shall be determined in accordance with the
provisions of Article 18 of this Chapter.
(c) Prior to the personal representative exercising possession, custody or control over real property of the estate he shall petition the clerk of court to obtain an order authorizing such possession, custody or control. The petition shall include:
(1) A description of the real property which is the subject of the petition;
(2) The names, ages, and addresses, if known, of the devisees and heirs of the decedent;
(3) A statement by the personal representative that he has determined that such possession, custody or control is in the best interest of the administration of the estate.
The devisees and heirs will be made parties to the proceeding by service of summons in the manner prescribed by law. If the clerk of court determines that it is in the best interest of the administration of the estate to authorize the personal representative to take possession, custody or control he shall grant an order authorizing that power. If a special proceeding has been instituted by the personal representative pursuant to G.S. 28A-15-1(c), the personal representative may petition for possession, custody, or control of any real property as a part of that proceeding and is not required to institute a separate special proceeding."
SECTION 11. G.S. 32A-1 reads as rewritten:
"§ 32A-1. Statutory Short Form of General Power of Attorney.
The use of the following form in the creation of a power of attorney is lawful, and, when used, it shall be construed in accordance with the provisions of this Chapter.
"NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING. THEY ARE DEFINED IN CHAPTER 32A OF THE NORTH CAROLINA GENERAL STATUTES WHICH EXPRESSLY PERMITS THE USE OF ANY OTHER OR DIFFERENT FORM OF POWER OF ATTORNEY DESIRED BY THE PARTIES CONCERNED.
State of _____________________________
County of ____________________________
I ____________________________, appoint __________________ to be my attorney-in-fact, to act in my name in any way which I could act for myself, with respect to the following matters as each of them is defined in Chapter 32A of the North Carolina General Statutes. (DIRECTIONS: Initial the line opposite any one or more of the subdivisions as to which the principal desires to give the attorney-in-fact authority.)
(1)....... Real property transactions..................................................... __________
(2)....... Personal property transactions.............................................. __________
(3)....... Bond, share, stock, securities and commodity
........... transactions.......................................................................... __________
(4)....... Banking transactions............................................................. __________
(5)....... Safe deposits........................................................................ __________
(6)....... Business operating transactions............................................. __________
(7)....... Insurance transactions........................................................... __________
(8)....... Estate transactions................................................................ __________
(9)....... Personal relationships and affairs........................................... __________
(10)..... Social security and unemployment......................................... __________
(11)..... Benefits from military service................................................. __________
(12)..... Tax matters.......................................................................... __________
(13)..... Employment of agents........................................................... __________
(14) Gifts to charities, and to individuals other
........... than the attorney-in-fact........................................................ __________
(15)..... Gifts to the named attorney-in-fact........................................ __________
(16) Renunciation of an interest in or power over
property to benefit persons other than the
attorney-in-fact...................................................................._________
(17) Renunciation of an interest in or power over
property to benefit persons including the
attorney-in-fact.....................................................................________
(If power of substitution and revocation is to be given, add: 'I also give to such person full power to appoint another to act as my attorney-in-fact and full power to revoke such appointment.')
(If period of power of attorney is to be limited, add: 'This power terminates______________, ________')
(If power of attorney is to be a durable power of attorney under the provision of Article 2 of Chapter 32A and is to continue in effect after the incapacity or mental incompetence of the principal, add: 'This power of attorney shall not be affected by my subsequent incapacity or mental incompetence.')
(If power of attorney is to take effect only after the incapacity or mental incompetence of the principal, add: 'This power of attorney shall become effective after I become incapacitated or mentally incompetent.')
(If power of attorney is to be effective to terminate or direct the administration of a custodial trust created under the Uniform Custodial Trust Act, add: 'In the event of my subsequent incapacity or mental incompetence, the attorney-in-fact of this power of attorney shall have the power to terminate or to direct the administration of any custodial trust of which I am the beneficiary.')
(If power of attorney is to be effective to determine whether a beneficiary under the Uniform Custodial Trust Act is incapacitated or ceases to be incapacitated, add: 'The attorney-in-fact of this power of attorney shall have the power to determine whether I am incapacitated or whether my incapacity has ceased for the purposes of any custodial trust of which I am the beneficiary.')
Dated___________, _______ .
_______________________________ (Seal)
Signature
STATE OF ____________________ COUNTY OF _______________
On this ______ day of___________, ______, personally appeared before me, the said named ______________________________ to me known and known to me to be the person described in and who executed the foregoing instrument and he (or she) acknowledged that he (or she) executed the same and being duly sworn by me, made oath that the statements in the foregoing instrument are true.
My Commission Expires ______________________.
________________________________________________
(Signature of Notary Public)
Notary Public (Official Seal)"
SECTION 12. G.S. 32A-2 is amended by adding two new subdivisions to read:
"(16) Renunciation of an interest in or power over property to benefit persons other than the attorney-in-fact. - To renounce, in accordance with Chapter 31B of the General Statutes, an interest in or power over property, including a power of appointment, to benefit persons other than the attorney-in-fact or the estate, creditors, or the creditors of the estate of the attorney-in-fact, or an individual to whom the attorney-in-fact owes a legal obligation of support.
(17) Renunciation of an interest in or power over property to benefit persons including the attorney-in-fact. - To renounce, in accordance with Chapter 31B of the General Statutes, an interest in or power over property, including a power of appointment, to benefit persons including the attorney-in-fact, or the estate, creditors, or the creditors of the estate of the attorney-in-fact, or an individual to whom the attorney-in-fact owes a legal obligation of support."
SECTION 13. The title of Article 2A of Chapter 32A of the General Statutes reads as rewritten:
"Article 2A.
Authority of Attorney-In-Fact to Make Gifts. Gifts
and to Renounce."
SECTION 14. Article 2A of Chapter 32A of the General Statutes is amended by adding a new section to read:
"§ 32A-14.2. Renunciation under power of attorney.
(a) If any power of attorney authorizes an attorney-in-fact to do, execute, or perform any act that the principal might or could do or evidences the principal's intent to give the attorney-in-fact full power to handle the principal's affairs or deal with the principal's property, but does not expressly authorize the attorney-in-fact to renounce an interest in or power over property, the attorney-in-fact shall not have the power or authority to renounce on behalf of the principal pursuant to Chapter 31B of the General Statutes.
(b) Notwithstanding an express grant of general authority to renounce, an attorney-in-fact that is not an ancestor, spouse, or descendant of the principal may not renounce under a power of attorney to create in the attorney-in-fact or the estate, creditors, or the creditors of the estate of the attorney-in-fact, or in an individual to whom the attorney-in-fact owes a legal obligation of support, an interest in or power over the principal's property by reason of a renunciation unless the power of attorney expressly authorizes a renunciation that benefits the attorney-in-fact or the estate, creditors, or the creditors of the estate of the attorney-in-fact, or an individual to whom the attorney-in-fact owes a legal obligation of support."
SECTION 15. G.S. 36C-1-105(b) reads as rewritten:
"(b) The terms of a trust prevail over any provision of this Chapter except:
(1) The requirements
for creating a trust; trust.
(2) The duty of a
trustee to act in good faith and in accordance with the terms and purposes of
the trust and the interests of the beneficiaries; beneficiaries.
(3) The requirement
that a trust and its terms be for the benefit of its beneficiaries, and that
the trust have a purpose that is lawful, not contrary to public policy, and
possible to achieve; achieve.
(4) The power of the
court to modify or terminate a trust under G.S. 36C-4-410 through G.S. 36C-4-416;
G.S. 36C-4-416.
(5) The effect of a spendthrift provision and the rights of certain creditors and assignees to reach a trust as provided in Article 5 of this Chapter;
(6) The effect of an
exculpatory term under G.S. 36C-10-1008; G.S. 36C-10-1008.
(7) The rights under
G.S. 36C-10-1010 through G.S. 36C-10-1013 of a person other than a
trustee or beneficiary; beneficiary.
(8) Periods of
limitation for commencing a judicial proceeding; proceeding.
(9) The power of the
court to take any action and exercise any jurisdiction as may be necessary in
the interests of justice;justice.
(10) The subject-matter
jurisdiction of the court and venue for commencing a proceeding as provided in
G.S. 36C-2-203 and G.S. 36C-2-204; andG.S. 36C-2-204.
(11) The requirement that the exercise of the powers described in G.S. 36C-6-602.1(a) shall not alter the designation of beneficiaries to receive property on the settlor's death under that settlor's existing estate plan.
(12) The power of a trustee to renounce an interest in or power over property under G.S. 36C-8-816(32)."
SECTION 16. G.S. 36C-8-816 reads as rewritten:
"§ 36C-8-816. Specific powers of trustee.
Without limiting the authority conferred by G.S. 36C-8-815, a trustee may:
…
(30) Request an order from the
court for the sale of real or personal property under Article 29A of Chapter 1
of the General Statutes, or for the exchange, partition, or other disposition
or change in the character of, or for the grant of options or other rights in
or to, such property; and property;
(31) Distribute the assets of an
inoperative trust consistent with the authority granted under G.S. 28A-22-10.G.S. 28A-22-110;
and
(32) Renounce, in accordance with Chapter 31B of the General Statutes, an interest in or power over property, including property that is or may be burdened with liability for violation of environmental law."
SECTION 17. G.S. 36C-8-816(13)c. is repealed.
SECTION 18. The Revisor of Statutes shall cause to be printed along with this act all explanatory comments of the drafters of this act as the Revisor deems appropriate.
SECTION 19. This act becomes effective October 1, 2009, and applies to renunciations and powers of attorney executed on or after that date.
In the General Assembly read three times and ratified this the 21st day of May, 2009.
s/ Walter H. Dalton
President of the Senate
s/ Joe Hackney
Speaker of the House of Representatives
s/ Beverly E. Perdue
Governor
Approved 3:50 p.m. this 1st day of June, 2009