NORTH CAROLINA GENERAL ASSEMBLY
1963 SESSION

CHAPTER 112
SENATE BILL 44

AN ACT TO ENABLE THE GUARDIAN OR TRUSTEE OF AN INCOMPETENT, WITH JUDICIAL APPROVAL, TO MAKE GIFTS FROM THE PRINCIPAL OF THE INCOMPETENT'S ESTATE FOR PUBLIC, RELIGIOUS, CHARITABLE, LITERARY, SCIENTIFIC, HISTORICAL, MEDICAL OR EDUCATIONAL PURPOSES.

The General Assembly of North Carolina do enact:

Section 1.  With the approval of the resident Judge of the Superior Court of the district in which the guardian or trustee was appointed upon a duly verified petition, the guardian or trustee of a person judicially declared to be incompetent may, from the principal of the incompetent's estate, make gifts to the State of North Carolina, its agencies, counties or municipalities, or the United States or its agencies or instrumentalities, or for religious, charitable, literary, scientific, historical, medical or educational purposes.
Sec. 2.  The Judge shall not approve such gifts unless it appears to his satisfaction that:
(a)	the making of such gifts will not leave the incompetent's remaining principal estate insufficient to provide reasonable and adequate income for the support, maintenance, comfort and welfare of the incompetent and those legally entitled to support from the incompetent in order to maintain the incompetent and such dependents in the manner to which the incompetent and such dependents are accustomed and in keeping with their station in life;
(b)	each donee is a donee to which a competent donor could make a gift, without limit as to amount, without incurring Federal or State gift tax liability;
(c)	each donee is a donee qualified to receive tax deductible gifts under Federal and State income tax laws;
(d)	the making of such gifts will not jeopardize the rights of any creditor of the incompetent; and
(e)	it is improbable that the incompetent will recover compentency during his or her lifetime;
(f)	either: (1) (a) the incompetent, prior to being declared incompetent, executed a paper writing, with the formalities required by the laws of North Carolina for the execution of a valid will; (b) specific legacies, bequests or devises of specific amounts of money, income or property included in such paper writing will not be jeopardized by making such gifts;(c) all residuary legatees and devisees designated in such paper writing, who would take under the paper writing if the incompetent died contemporaneously with the signing of the order of approval of such gifts and such paper writing was probated as the incompetent's will and the spouse, if any, of such incompetent have been given at least ten (10) days written notice that approval for such gifts will be sought and that objection may be filed with the Clerk of Superior Court of the county in which the guardian or trustee was appointed, within the ten-day period;
(2)	(a)	that so far as is known the incompetent has not prior to being declared incompetent, executed a will which could be probated upon the death of the incompetent; and (b) all persons who would share in the incompetent's estate, if the incompetent died contemporaneously with the signing of the order of approval, have been given at least ten (10) days written notice that approval for such gifts will be sought and that objection may be filed with the Clerk of the Superior Court, of the county in which the guardian or trustee was appointed, within the ten-day period.
Sec. 3.  For purposes of Section 2(f)(1) of this Act, if such paper writing provides for the residuary estate to be placed in trust for a term of years, with stated amounts of income payable to designated beneficiaries during the term and stated amounts payable to designated beneficiaries upon termination of the trust, such designated beneficiaries shall be deemed to be specific legatees and devisees and those taking the remaining income of the trust and, at the end of the term, the remaining principal shall be deemed to be residuary legatees and devisees who would take under the paper writing if the incompetent died contemporaneously with the signing of the order of approval of such gifts. In no case shall any prospective executor or trustee be considered either a specific or residuary legatee and devisee.
Sec. 4.  If any person, to whom notice must be given under the provisions of Section 2(f) of this Act, is a minor or is incompetent, then the notice shall be given to his duly appointed guardian or other duly appointed representative: Provided, that if a minor or incompetent has no such guardian or representative then a guardian ad litem shall be appointed by the Judge and such guardian ad litem shall be given the notice herein required.
Sec. 5.  If any objection is filed by one to whom notice has been given under the terms of this Act, the Clerk shall bring it to the attention of the Judge, who shall hear the same, and determine the validity and materiality of such objection and make his order accordingly. If no such objection is filed, the Judge shall include a finding to that effect in such order as he may make. The Judge shall not withhold his approval merely because the incompetent, prior to becoming incompetent, had not made gifts to the same donees or other gifts similar in amount or type.
Sec. 6.  A gift made with the approval of the Judge under the provisions of this Act shall be deemed to be a gift made by the incompetent, and shall be as valid in all respects as if made by a competent person.
Sec. 7.  All laws and clauses of laws in conflict with this Act are hereby repealed.
Sec. 8.  This Act shall be in full force and effect from and after its ratification.
In the General Assembly read three times and ratified, this the 29th day of March, 1963.