State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-1-104_2

§ 37A‑1‑104.2. Conversion in trustee's discretion without court approval.

(a)        Any trustee, otherthan an interested trustee, or, where two or more persons are acting astrustees, a majority of the trustees who are not interested trustees (in eithercase hereafter "trustee"), may, in the trustee's sole discretion andwithout court approval, (i) convert an income trust to a total return unitrust,(ii) reconvert a total return unitrust to an income trust, or (iii) change thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust  if all of the following apply:

(1)        The trustee adopts awritten policy for the trust providing (i) in the case of a trust beingadministered as an income trust, that future distributions from the trust willbe unitrust amounts rather than net income, (ii) in the case of a trust beingadministered as a total return unitrust, that future distributions from thetrust will be net income rather than unitrust amounts, or (iii) that thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust will be changed as stated in thepolicy.

(2)        The trustee giveswritten notice of its intention to take the action, including copies of thewritten policy and this Part, to (i) the settlor of the trust, if living, and(ii) all persons who are the qualified beneficiaries of the trust at the timethe notice is given. If a qualified beneficiary is under a legal disability,notice shall be given to the representative of the qualified beneficiary if arepresentative is available without court order.

(3)        There is at least(i) one qualified beneficiary described in G.S. 36C‑1‑103(15)a. orb. who is not under a legal disability or a representative of a qualifiedbeneficiary so described and (ii) one qualified beneficiary described in G.S.36C‑1‑103(15)c. who is not under a legal disability or arepresentative of a qualified beneficiary so described.

and

(4)        No person receivingnotice of the trustee's intention to take the proposed action objects to theaction within 60 days after notice has been given. The objection shall be bywritten instrument delivered to the trustee.

(b)        If there is notrustee of the trust other than an interested trustee, the interested trusteeor, where two or more persons are acting as trustee and are interestedtrustees, a majority of the interested trustees may, in its sole discretion andwithout court approval, (i) convert an income trust to a total return unitrust,(ii) reconvert a total return unitrust to an income trust, or (iii) change thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust if all of the following apply:

(1)        The trustee adopts awritten policy for the trust providing (i) in the case of a trust beingadministered as an income trust, that future distributions from the trust willbe unitrust amounts rather than net income as determined under this Chapter,(ii) in the case of a trust being administered as a total return unitrust, thatfuture distributions from the trust will be net income as determined under thisChapter rather than unitrust amounts, or (iii) that the percentage used tocalculate the unitrust amount or the method used to determine the fair marketvalue of the trust will be changed as stated in the policy.

(2)        The trustee appointsa disinterested person who, in its sole discretion but acting in a fiduciarycapacity, determines for the trustee (i) the percentage to be used to calculatethe unitrust amount, (ii) the method to be used in determining the fair marketvalue of the trust, and (iii) which assets, if any, are to be excluded indetermining the unitrust amount.

(3)        The trustee giveswritten notice of its intention to take the action, including copies of thewritten policy and this Part, and the determinations of the disinterestedperson to (i) the settlor of the trust, if living, and (ii) all persons who arethe qualified beneficiaries of the trust at the time of the giving of thenotice. If a qualified beneficiary is under a legal disability, notice shall begiven to the representative of the qualified beneficiary if a representative isavailable without court order.

(4)        There is at leastone (i) qualified beneficiary described in G.S. 36C‑1‑103(15)a. orb. or a representative of a beneficiary so described and (ii) one qualifiedbeneficiary described in G.S. 36C‑1‑103(15)c. or a representativeof a qualified beneficiary so described.

(5)        No person receivingnotice of the trustee's intention to take the proposed action of the trusteeobjects to the action or to the determination of the disinterested personwithin 60 days after notice has been given. The objection must be by writteninstrument delivered to the trustee.

(c)        A trustee may actunder subsection (a) or (b) of this section with respect to a trust for whichboth income and principal have been set aside permanently for charitablepurposes under the governing instrument and for which a federal estate or gifttax deduction has been taken, provided that all of the following apply:

(1)        Instead of sendingwritten notice to the persons described in subdivisions (2) and (3) ofsubsection (a) of this section or subdivisions (3) and (4) of subsection (b) ofthis section, as the case may be, the trustee shall send written notice to eachcharitable organization expressly designated to receive the income of the trustunder the governing instrument and, if no charitable organization is expresslydesignated to receive all of the income of the trust under the governinginstrument, to the Attorney General of this State.

(2)        Subdivision (4) ofsubsection (a) of this section or subdivision (5) of subsection (b) of thissection, as the case may be, shall not apply to this action.

(3)        In each taxableyear, the trustee shall distribute the greater of the unitrust amount or theamount required by section 4942 of the Code.

(d)        The provisions ofG.S. 36C‑1‑109 regarding notices and the sending of documents topersons under Chapter 36C of the General Statutes shall apply for purposes ofnotices and the sending of documents under this section. (2003‑232, s. 2; 2005‑244,s. 3; 2007‑106, s. 46.)

State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-1-104_2

§ 37A‑1‑104.2. Conversion in trustee's discretion without court approval.

(a)        Any trustee, otherthan an interested trustee, or, where two or more persons are acting astrustees, a majority of the trustees who are not interested trustees (in eithercase hereafter "trustee"), may, in the trustee's sole discretion andwithout court approval, (i) convert an income trust to a total return unitrust,(ii) reconvert a total return unitrust to an income trust, or (iii) change thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust  if all of the following apply:

(1)        The trustee adopts awritten policy for the trust providing (i) in the case of a trust beingadministered as an income trust, that future distributions from the trust willbe unitrust amounts rather than net income, (ii) in the case of a trust beingadministered as a total return unitrust, that future distributions from thetrust will be net income rather than unitrust amounts, or (iii) that thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust will be changed as stated in thepolicy.

(2)        The trustee giveswritten notice of its intention to take the action, including copies of thewritten policy and this Part, to (i) the settlor of the trust, if living, and(ii) all persons who are the qualified beneficiaries of the trust at the timethe notice is given. If a qualified beneficiary is under a legal disability,notice shall be given to the representative of the qualified beneficiary if arepresentative is available without court order.

(3)        There is at least(i) one qualified beneficiary described in G.S. 36C‑1‑103(15)a. orb. who is not under a legal disability or a representative of a qualifiedbeneficiary so described and (ii) one qualified beneficiary described in G.S.36C‑1‑103(15)c. who is not under a legal disability or arepresentative of a qualified beneficiary so described.

and

(4)        No person receivingnotice of the trustee's intention to take the proposed action objects to theaction within 60 days after notice has been given. The objection shall be bywritten instrument delivered to the trustee.

(b)        If there is notrustee of the trust other than an interested trustee, the interested trusteeor, where two or more persons are acting as trustee and are interestedtrustees, a majority of the interested trustees may, in its sole discretion andwithout court approval, (i) convert an income trust to a total return unitrust,(ii) reconvert a total return unitrust to an income trust, or (iii) change thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust if all of the following apply:

(1)        The trustee adopts awritten policy for the trust providing (i) in the case of a trust beingadministered as an income trust, that future distributions from the trust willbe unitrust amounts rather than net income as determined under this Chapter,(ii) in the case of a trust being administered as a total return unitrust, thatfuture distributions from the trust will be net income as determined under thisChapter rather than unitrust amounts, or (iii) that the percentage used tocalculate the unitrust amount or the method used to determine the fair marketvalue of the trust will be changed as stated in the policy.

(2)        The trustee appointsa disinterested person who, in its sole discretion but acting in a fiduciarycapacity, determines for the trustee (i) the percentage to be used to calculatethe unitrust amount, (ii) the method to be used in determining the fair marketvalue of the trust, and (iii) which assets, if any, are to be excluded indetermining the unitrust amount.

(3)        The trustee giveswritten notice of its intention to take the action, including copies of thewritten policy and this Part, and the determinations of the disinterestedperson to (i) the settlor of the trust, if living, and (ii) all persons who arethe qualified beneficiaries of the trust at the time of the giving of thenotice. If a qualified beneficiary is under a legal disability, notice shall begiven to the representative of the qualified beneficiary if a representative isavailable without court order.

(4)        There is at leastone (i) qualified beneficiary described in G.S. 36C‑1‑103(15)a. orb. or a representative of a beneficiary so described and (ii) one qualifiedbeneficiary described in G.S. 36C‑1‑103(15)c. or a representativeof a qualified beneficiary so described.

(5)        No person receivingnotice of the trustee's intention to take the proposed action of the trusteeobjects to the action or to the determination of the disinterested personwithin 60 days after notice has been given. The objection must be by writteninstrument delivered to the trustee.

(c)        A trustee may actunder subsection (a) or (b) of this section with respect to a trust for whichboth income and principal have been set aside permanently for charitablepurposes under the governing instrument and for which a federal estate or gifttax deduction has been taken, provided that all of the following apply:

(1)        Instead of sendingwritten notice to the persons described in subdivisions (2) and (3) ofsubsection (a) of this section or subdivisions (3) and (4) of subsection (b) ofthis section, as the case may be, the trustee shall send written notice to eachcharitable organization expressly designated to receive the income of the trustunder the governing instrument and, if no charitable organization is expresslydesignated to receive all of the income of the trust under the governinginstrument, to the Attorney General of this State.

(2)        Subdivision (4) ofsubsection (a) of this section or subdivision (5) of subsection (b) of thissection, as the case may be, shall not apply to this action.

(3)        In each taxableyear, the trustee shall distribute the greater of the unitrust amount or theamount required by section 4942 of the Code.

(d)        The provisions ofG.S. 36C‑1‑109 regarding notices and the sending of documents topersons under Chapter 36C of the General Statutes shall apply for purposes ofnotices and the sending of documents under this section. (2003‑232, s. 2; 2005‑244,s. 3; 2007‑106, s. 46.)


State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-1-104_2

§ 37A‑1‑104.2. Conversion in trustee's discretion without court approval.

(a)        Any trustee, otherthan an interested trustee, or, where two or more persons are acting astrustees, a majority of the trustees who are not interested trustees (in eithercase hereafter "trustee"), may, in the trustee's sole discretion andwithout court approval, (i) convert an income trust to a total return unitrust,(ii) reconvert a total return unitrust to an income trust, or (iii) change thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust  if all of the following apply:

(1)        The trustee adopts awritten policy for the trust providing (i) in the case of a trust beingadministered as an income trust, that future distributions from the trust willbe unitrust amounts rather than net income, (ii) in the case of a trust beingadministered as a total return unitrust, that future distributions from thetrust will be net income rather than unitrust amounts, or (iii) that thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust will be changed as stated in thepolicy.

(2)        The trustee giveswritten notice of its intention to take the action, including copies of thewritten policy and this Part, to (i) the settlor of the trust, if living, and(ii) all persons who are the qualified beneficiaries of the trust at the timethe notice is given. If a qualified beneficiary is under a legal disability,notice shall be given to the representative of the qualified beneficiary if arepresentative is available without court order.

(3)        There is at least(i) one qualified beneficiary described in G.S. 36C‑1‑103(15)a. orb. who is not under a legal disability or a representative of a qualifiedbeneficiary so described and (ii) one qualified beneficiary described in G.S.36C‑1‑103(15)c. who is not under a legal disability or arepresentative of a qualified beneficiary so described.

and

(4)        No person receivingnotice of the trustee's intention to take the proposed action objects to theaction within 60 days after notice has been given. The objection shall be bywritten instrument delivered to the trustee.

(b)        If there is notrustee of the trust other than an interested trustee, the interested trusteeor, where two or more persons are acting as trustee and are interestedtrustees, a majority of the interested trustees may, in its sole discretion andwithout court approval, (i) convert an income trust to a total return unitrust,(ii) reconvert a total return unitrust to an income trust, or (iii) change thepercentage used to calculate the unitrust amount or the method used todetermine the fair market value of the trust if all of the following apply:

(1)        The trustee adopts awritten policy for the trust providing (i) in the case of a trust beingadministered as an income trust, that future distributions from the trust willbe unitrust amounts rather than net income as determined under this Chapter,(ii) in the case of a trust being administered as a total return unitrust, thatfuture distributions from the trust will be net income as determined under thisChapter rather than unitrust amounts, or (iii) that the percentage used tocalculate the unitrust amount or the method used to determine the fair marketvalue of the trust will be changed as stated in the policy.

(2)        The trustee appointsa disinterested person who, in its sole discretion but acting in a fiduciarycapacity, determines for the trustee (i) the percentage to be used to calculatethe unitrust amount, (ii) the method to be used in determining the fair marketvalue of the trust, and (iii) which assets, if any, are to be excluded indetermining the unitrust amount.

(3)        The trustee giveswritten notice of its intention to take the action, including copies of thewritten policy and this Part, and the determinations of the disinterestedperson to (i) the settlor of the trust, if living, and (ii) all persons who arethe qualified beneficiaries of the trust at the time of the giving of thenotice. If a qualified beneficiary is under a legal disability, notice shall begiven to the representative of the qualified beneficiary if a representative isavailable without court order.

(4)        There is at leastone (i) qualified beneficiary described in G.S. 36C‑1‑103(15)a. orb. or a representative of a beneficiary so described and (ii) one qualifiedbeneficiary described in G.S. 36C‑1‑103(15)c. or a representativeof a qualified beneficiary so described.

(5)        No person receivingnotice of the trustee's intention to take the proposed action of the trusteeobjects to the action or to the determination of the disinterested personwithin 60 days after notice has been given. The objection must be by writteninstrument delivered to the trustee.

(c)        A trustee may actunder subsection (a) or (b) of this section with respect to a trust for whichboth income and principal have been set aside permanently for charitablepurposes under the governing instrument and for which a federal estate or gifttax deduction has been taken, provided that all of the following apply:

(1)        Instead of sendingwritten notice to the persons described in subdivisions (2) and (3) ofsubsection (a) of this section or subdivisions (3) and (4) of subsection (b) ofthis section, as the case may be, the trustee shall send written notice to eachcharitable organization expressly designated to receive the income of the trustunder the governing instrument and, if no charitable organization is expresslydesignated to receive all of the income of the trust under the governinginstrument, to the Attorney General of this State.

(2)        Subdivision (4) ofsubsection (a) of this section or subdivision (5) of subsection (b) of thissection, as the case may be, shall not apply to this action.

(3)        In each taxableyear, the trustee shall distribute the greater of the unitrust amount or theamount required by section 4942 of the Code.

(d)        The provisions ofG.S. 36C‑1‑109 regarding notices and the sending of documents topersons under Chapter 36C of the General Statutes shall apply for purposes ofnotices and the sending of documents under this section. (2003‑232, s. 2; 2005‑244,s. 3; 2007‑106, s. 46.)

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