State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-1-105

Part 3. Judicial Control ofDiscretionary Power.

§ 37A‑1‑105. Judicial control of discretionary power.

(a)        The court shall notorder a fiduciary to change a decision to exercise or not to exercise adiscretionary power conferred by this Chapter unless it determines that thedecision was an abuse of the fiduciary's discretion. A fiduciary's decision isnot an abuse of discretion merely because the court would have exercised thepower in a different manner or would not have exercised the power.

(b)        The decisions towhich subsection (a) of this section applies include:

(1)        A decision underG.S. 37A‑1‑104(a) as to whether and to what extent an amount shouldbe transferred from principal to income or from income to principal.

(2)        A decision regardingthe factors that are relevant to the trust and its beneficiaries, the extent towhich the factors are relevant, and the weight, if any, to be given to thosefactors in deciding whether and to what extent to exercise the discretionarypower conferred by G.S. 37A‑1‑104(a).

(c)        If the courtdetermines that a fiduciary has abused the fiduciary's discretion, the courtmay place the income and remainder beneficiaries in the positions they wouldhave occupied if the discretion had not been abused, according to the followingrules:

(1)        To the extent thatthe abuse of discretion has resulted in no distribution to a beneficiary or ina distribution that is too small, the court shall order the fiduciary todistribute from the trust to the beneficiary an amount that the court determineswill restore the beneficiary, in whole or in part, to the beneficiary'sappropriate position.

(2)        To the extent thatthe abuse of discretion has resulted in a distribution to a beneficiary that istoo large, the court shall place the beneficiaries, the trust, or both, inwhole or in part, in their appropriate positions by ordering the fiduciary towithhold an amount from one or more future distributions to the beneficiary whoreceived the distribution that was too large or ordering that beneficiary toreturn some or all of the distribution to the trust.

(3)        To the extent thatthe court is unable, after applying subdivisions (1) and (2) of thissubsection, to place the beneficiaries, the trust, or both in the positionsthey would have occupied if the discretion had not been abused, the court mayorder the fiduciary to pay an appropriate amount from its own funds to one ormore of the beneficiaries or the trust or both.

(d)        Upon petition bythe fiduciary, the court having jurisdiction over a trust or estate shalldetermine whether a proposed exercise or nonexercise by the fiduciary of adiscretionary power conferred by this Chapter will result in an abuse of thefiduciary's discretion. If the petition describes the proposed exercise ornonexercise of the power and contains sufficient information to inform thebeneficiaries of the reasons for the proposal, the facts upon which thefiduciary relies, and an explanation of how the income and remainderbeneficiaries will be affected by the proposed exercise or nonexercise of thepower, a beneficiary who challenges the proposed exercise or nonexercise hasthe burden of establishing that it will result in an abuse of discretion. (2003‑232, s. 2.)

State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-1-105

Part 3. Judicial Control ofDiscretionary Power.

§ 37A‑1‑105. Judicial control of discretionary power.

(a)        The court shall notorder a fiduciary to change a decision to exercise or not to exercise adiscretionary power conferred by this Chapter unless it determines that thedecision was an abuse of the fiduciary's discretion. A fiduciary's decision isnot an abuse of discretion merely because the court would have exercised thepower in a different manner or would not have exercised the power.

(b)        The decisions towhich subsection (a) of this section applies include:

(1)        A decision underG.S. 37A‑1‑104(a) as to whether and to what extent an amount shouldbe transferred from principal to income or from income to principal.

(2)        A decision regardingthe factors that are relevant to the trust and its beneficiaries, the extent towhich the factors are relevant, and the weight, if any, to be given to thosefactors in deciding whether and to what extent to exercise the discretionarypower conferred by G.S. 37A‑1‑104(a).

(c)        If the courtdetermines that a fiduciary has abused the fiduciary's discretion, the courtmay place the income and remainder beneficiaries in the positions they wouldhave occupied if the discretion had not been abused, according to the followingrules:

(1)        To the extent thatthe abuse of discretion has resulted in no distribution to a beneficiary or ina distribution that is too small, the court shall order the fiduciary todistribute from the trust to the beneficiary an amount that the court determineswill restore the beneficiary, in whole or in part, to the beneficiary'sappropriate position.

(2)        To the extent thatthe abuse of discretion has resulted in a distribution to a beneficiary that istoo large, the court shall place the beneficiaries, the trust, or both, inwhole or in part, in their appropriate positions by ordering the fiduciary towithhold an amount from one or more future distributions to the beneficiary whoreceived the distribution that was too large or ordering that beneficiary toreturn some or all of the distribution to the trust.

(3)        To the extent thatthe court is unable, after applying subdivisions (1) and (2) of thissubsection, to place the beneficiaries, the trust, or both in the positionsthey would have occupied if the discretion had not been abused, the court mayorder the fiduciary to pay an appropriate amount from its own funds to one ormore of the beneficiaries or the trust or both.

(d)        Upon petition bythe fiduciary, the court having jurisdiction over a trust or estate shalldetermine whether a proposed exercise or nonexercise by the fiduciary of adiscretionary power conferred by this Chapter will result in an abuse of thefiduciary's discretion. If the petition describes the proposed exercise ornonexercise of the power and contains sufficient information to inform thebeneficiaries of the reasons for the proposal, the facts upon which thefiduciary relies, and an explanation of how the income and remainderbeneficiaries will be affected by the proposed exercise or nonexercise of thepower, a beneficiary who challenges the proposed exercise or nonexercise hasthe burden of establishing that it will result in an abuse of discretion. (2003‑232, s. 2.)


State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_37A > GS_37A-1-105

Part 3. Judicial Control ofDiscretionary Power.

§ 37A‑1‑105. Judicial control of discretionary power.

(a)        The court shall notorder a fiduciary to change a decision to exercise or not to exercise adiscretionary power conferred by this Chapter unless it determines that thedecision was an abuse of the fiduciary's discretion. A fiduciary's decision isnot an abuse of discretion merely because the court would have exercised thepower in a different manner or would not have exercised the power.

(b)        The decisions towhich subsection (a) of this section applies include:

(1)        A decision underG.S. 37A‑1‑104(a) as to whether and to what extent an amount shouldbe transferred from principal to income or from income to principal.

(2)        A decision regardingthe factors that are relevant to the trust and its beneficiaries, the extent towhich the factors are relevant, and the weight, if any, to be given to thosefactors in deciding whether and to what extent to exercise the discretionarypower conferred by G.S. 37A‑1‑104(a).

(c)        If the courtdetermines that a fiduciary has abused the fiduciary's discretion, the courtmay place the income and remainder beneficiaries in the positions they wouldhave occupied if the discretion had not been abused, according to the followingrules:

(1)        To the extent thatthe abuse of discretion has resulted in no distribution to a beneficiary or ina distribution that is too small, the court shall order the fiduciary todistribute from the trust to the beneficiary an amount that the court determineswill restore the beneficiary, in whole or in part, to the beneficiary'sappropriate position.

(2)        To the extent thatthe abuse of discretion has resulted in a distribution to a beneficiary that istoo large, the court shall place the beneficiaries, the trust, or both, inwhole or in part, in their appropriate positions by ordering the fiduciary towithhold an amount from one or more future distributions to the beneficiary whoreceived the distribution that was too large or ordering that beneficiary toreturn some or all of the distribution to the trust.

(3)        To the extent thatthe court is unable, after applying subdivisions (1) and (2) of thissubsection, to place the beneficiaries, the trust, or both in the positionsthey would have occupied if the discretion had not been abused, the court mayorder the fiduciary to pay an appropriate amount from its own funds to one ormore of the beneficiaries or the trust or both.

(d)        Upon petition bythe fiduciary, the court having jurisdiction over a trust or estate shalldetermine whether a proposed exercise or nonexercise by the fiduciary of adiscretionary power conferred by this Chapter will result in an abuse of thefiduciary's discretion. If the petition describes the proposed exercise ornonexercise of the power and contains sufficient information to inform thebeneficiaries of the reasons for the proposal, the facts upon which thefiduciary relies, and an explanation of how the income and remainderbeneficiaries will be affected by the proposed exercise or nonexercise of thepower, a beneficiary who challenges the proposed exercise or nonexercise hasthe burden of establishing that it will result in an abuse of discretion. (2003‑232, s. 2.)

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