NORTH CAROLINA GENERAL ASSEMBLY
1979 SESSION

CHAPTER 180
HOUSE BILL 262

AN ACT TO ESTABLISH THE EXTENT OF ALIENABILITY OF BENEFICIAL INTERESTS IN TRUSTS, AND TO REPEAL THE OBSOLETE PROVISIONS OF G.S. 41-9 AS RECOMMENDED BY THE GENERAL STATUTES COMMISSION.

The General Assembly of North Carolina enacts:

Section 1.  Chapter 36A of the General Statutes is hereby amended by adding a new Article 9 thereto to read as follows:
"Article 9
"Alienability of Beneficial Interest; Spendthrift Trust
"§ 36A-115.  Alienability of beneficiary's interest; spendthrift trusts. — (a) Except as provided in subsection (b) hereof, all estates or interests of trust beneficiaries are alienable either voluntarily or involuntarily to the same extent as are legal estates or interests of a similar nature.
(b)	Subsection (a) hereof shall not apply to a beneficiary's estate or interest in any one or any combination of one or more of the trusts described below, in which the beneficiary's estate or interest shall not be alienable either voluntarily or involuntarily.
(1)	Discretionary trust. A trust wherein the amount to be received by the beneficiary, including whether or not the beneficiary is to receive anything at all, is within the discretion of the trustee.
(2)	Support trust. A trust wherein the trustee has no duty to pay or distribute any particular amount to the beneficiary, but has only a duty to pay or distribute to the beneficiary, or to apply on behalf of the beneficiary such sums as the trustee shall, in his discretion, determine are appropriate for the support, education or maintenance of the beneficiary.
(3)	Protective trust. A trust wherein the creating instrument provides that the interest of the beneficiary shall cease if
a.	the beneficiary alienates or attempts to alienate that interest; or
b.	any creditor attempts to reach the beneficiary's interest by attachment, levy, or otherwise; or
c.	the beneficiary becomes insolvent or bankrupt."
Sec. 2.  G.S. 41-9 is hereby repealed, except as to wills or deed executed prior to the effective date of this act.
Sec. 3.  This act shall become effective on October 1, 1979 and shall apply to trusts created on or after the effective date.
In the General Assembly read three times and ratified, this the 22nd day of March, 1979.