NORTH CAROLINA GENERAL ASSEMBLY

1975 SESSION

CHAPTER 135

SENATE BILL 132

AN ACT TO RESTRICT THE EXERCISE OF A POWER FOR A FIDUCIARY'S BENEFIT.

The General Assembly of North Carolina enacts:

Section 1.  Chapter 32 of the General Statutes is hereby amended by the addition of a new Article 4, as follows:

"Article 4.

"Restrictions on Exercise of Power for Fiduciary's Benefit.

"§ 32-29.  Restriction on exercise of power for fiduciary's benefit. — (a) Except as provided in subsection (b), a power conferred upon a person in his capacity as fiduciary to make discretionary distributions of principal or income to himself or to make discretionary allocations in his own favor of receipts or expenses as between income and principal cannot be exercised by him. If the power is conferred on two or more fiduciaries, it may be exercised by the fiduciaries who are not so disqualified. If there is no fiduciary qualified to exercise the power, it may be exercised by a special fiduciary appointed by the court. This section shall apply to all trusts now in existence and to all other trusts that shall come into existence after the effective date of this section.

(b)        This section shall not apply to:

(1)        trusts now in existence in which the fiduciary is also the creator of the trust and is living; or

(2)        trusts that shall come into existence after the effective date of this section in which the fiduciary is also the creator of the trust, is living, and the trust instrument shows a clear intent that this section shall not apply."

Sec. 2.  This act shall become effective on July 1, 1975.

In the General Assembly read three times and ratified, this the 14th day of April, 1975.