GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION LAW 2001-267
AN ACT TO AMEND THE LAWS CONCERNING CERTAIN TYPES OF DEPOSIT ACCOUNTS IN NORTH CAROLINA TO MAKE THEM MORE UNDERSTANDABLE TO CONSUMERS AND TO MAKE THEM MORE FLEXIBLE IN MEETING CONSUMER PREFERENCES.
The General Assembly of North Carolina enacts:
part i. accounts at commercial banks.
SECTION 1. G.S. 53-146.2 reads as rewritten:
"§
53-146.2. Trust Payable on Death (POD) accounts.
(a) If any person or
persons establishing a deposit account shall execute a written agreement
with the bank containing a statement that it is executed pursuant to the
provisions of this subsection section and providing for the
account to be held in the name of such the person or persons
as trustee owner or owners for not more than one person for
one or more persons designated as beneficiary, beneficiaries,
the account and any balance thereof shall be held as a trust Payable
on Death account, with the following incidents:
(1) The trustee Any
owner during the trustee's owner's lifetime may change the
any designated beneficiary by a written direction to the bank.
(1a) If there are two or more owners of a Payable on Death account, the owners shall own the account as joint tenants with right of survivorship and, except as otherwise provided in this section, the account shall have the incidents set forth in G.S. 53-146.1.
(2) The trustee Any
owner may withdraw funds by writing checks or otherwise, as set forth in
the account contract, and receive payment in cash or check payable to the trustee's
owner's personal order. Such payment or withdrawal shall constitute a
revocation of the trust agreement as to the amount withdrawn.
(3) If the only
one beneficiary is living and of legal age at the death of the trustee,
last surviving owner, the beneficiary shall be the owner of the account,
and payment by the bank to such owner shall be a total discharge of the bank's
obligation as to the amount paid. If two or more beneficiaries are living at
the death of the last surviving owner, they shall be owners of the account as
joint tenants with right of survivorship as provided in G.S. 53-146.1, and
payment by the bank to the owners or any of the owners shall be a total
discharge of the bank's obligation as to the amount paid.
(4) If the beneficiary
predeceases the trustee, one or more owners survive the last surviving
beneficiary, the account shall become an individual account of the trustee
owner, or a joint account with right of survivorship of the owners, and
shall have the legal incidents of an individual account. account in
the case of a single owner or a joint account with right of survivorship, as
provided in G.S. 53-146.1, in the case of multiple owners.
(5) If the named only
one beneficiary is living and that beneficiary is not of legal age
at the death of the trustee, last surviving owner, the bank shall
transfer the funds in the account to the general guardian or guardian of the
estate, if any, of the minor beneficiary. If no guardian of the minor
beneficiary has been appointed, the bank shall hold the funds in a similar
interest bearing account in the name of the minor until the minor reaches the
age of majority or until a duly appointed guardian withdraws the funds.
(6) Prior to the death
of the last surviving owner, no beneficiary shall have any ownership interest
in a Payable on Death account. Funds in a trust Payable on Death
account established pursuant to this subsection shall belong to the beneficiary
or beneficiaries upon the death of the trustee last surviving
owner and the funds shall be subject only to the personal representative's
right of collection as set forth in G.S. 28A-15-10(a)(1). Payment by the bank
of funds in the trust Payable on Death account to the beneficiary
or beneficiaries shall terminate the personal representative's authority
under G.S. 28A-15-10(a)(1) to collect against the bank for the funds so paid,
but the personal representative's authority to collect such funds from the
beneficiary or beneficiaries is not terminated.
The person or persons establishing an account under this subsection shall sign a statement containing language set forth in a conspicuous manner and substantially similar to the following:
"BANK (or name of institution)
TRUST payable
on death ACCOUNT
G.S. 53-146.2
I (or we) understand that by establishing a trust
Payable on Death account under the provisions of North Carolina General
Statute 53-146.2 that:
1. During my
lifetime I my (or our) lifetime I (or we), individually or jointly,
may withdraw the money in the account; and
2. By written
direction to the bank (or name of institution) I (or we), individually or
jointly, may change the beneficiary; beneficiary or
beneficiaries; and
3. Upon my (or our) death the money remaining in the account will belong to the beneficiary or beneficiaries and the money will not be inherited by my (or our) heirs or be controlled by will.
_________________________
--------------------------------------"
(a1) This section shall not be deemed exclusive. Deposit accounts not conforming to this section shall be governed by other applicable provisions of the General Statutes or the common law, as appropriate.
(b) Whenever
the beneficiary of a trust account does not survive the trustee, then the account
and any balance thereof which exists shall be owned by the trustee in the
trustee's own right and for the trustee's own use and benefit.
(c) No addition to such
accounts, nor any withdrawal, payment, or change of beneficiary shall affect
the nature of such accounts as trust Payable on Death accounts,
or affect the right of a trustee any owner to terminate the
account.
(d) This section does not repeal or modify any provisions of laws relating to estate taxes."
part ii. accounts at credit unions.
SECTION 2. G.S. 54-109.57 reads as rewritten:
"§ 54-109.57.
Trusts Payable on Death (POD) accounts.
(a) Shares may be issued
to and deposits received from any person or persons establishing an
account who shall execute a written agreement with the credit union containing
a statement that it is executed pursuant to the provisions of this subsection
section and providing for the account to be held in the name of such
the person or persons as trustee for not more than one person
owner or owners for one or more persons designated as beneficiary,
beneficiaries, the account and any balance thereof shall be held as a trust
Payable on Death account, with the following incidents:
(1) The trustee Any
owner during the trustee's owner's lifetime may change the
any designated beneficiary by a written direction to the credit union.
(1a) If there are two or more owners of a Payable on Death account, the owners shall own the account as joint tenants with right of survivorship and, except as otherwise provided in this section, the account shall have the incidents set forth in G.S. 54-109.58.
(2) The trustee Any
owner may withdraw funds by writing checks or otherwise, as set forth in
the account contract, and receive payment in cash or check payable to the trustee's
owner's personal order. Such payment or withdrawal shall constitute a
revocation of the trust agreement as to the amount withdrawn.
(3) If the only
one beneficiary is living and of legal age at the death of the last
surviving trustee, the beneficiary shall be the holder of the account, and
payment by the credit union to the holder shall be a total discharge of the
credit union's obligation as to the amount paid. If two or more
beneficiaries are living at the death of the last surviving owner, they shall
be owners of the account as joint tenants with right of survivorship as
provided in G.S. 54-109.58, and payment by the credit union to the owners or to
any of the owners shall be a total discharge of the credit union's obligation as
to the amount paid.
(4) If one or more
owners survive the last surviving beneficiary, the beneficiary
predeceases the trustee, the account shall become an individual account of
the trustee owner, or a joint account with right of survivorship of
the owners and shall have the legal incidents of an individual account.
account in the case of a single owner or a joint account with right of
survivorship, as provided in G.S. 54-109.58, in the case of multiple owners.
(5) If the named only
one beneficiary is living and that beneficiary is not of legal age
at the death of the trustee, last surviving owner, the credit
union shall transfer the funds in the account to the general guardian or guardian
of the estate, if any, of the minor beneficiary. If no guardian of the minor
beneficiary has been appointed, the credit union shall hold the funds in a
similar interest bearing account in the name of the minor until the minor
reaches the age of majority or until a duly appointed guardian withdraws the
funds.
(6) Prior to the death
of the last surviving owner, no beneficiary shall have any ownership interest
in a Payable on Death account. Funds in a trust Payable on Death
account established pursuant to this subsection shall belong to the beneficiary
or beneficiaries upon the death of the trustee last surviving
owner and the funds shall be subject only to the personal representative's
right of collection as set forth in G.S. 28A-15-10(a)(1). Payment by the credit
union of funds in the trust Payable on Death account to the
beneficiary shall terminate the personal representative's authority under G.S.
28A-15-10(a)(1) to collect against the credit union for the funds so paid, but
the personal representative's authority to collect such funds from the
beneficiary or beneficiaries is not terminated.
The person or persons establishing an account under this subsection shall sign a statement containing language set forth in a conspicuous manner and substantially similar to the following:
"CREDIT UNION (or name of institution)
TRUST payable
on death ACCOUNT
G.S. 54-109.57
I (or we) understand that by establishing a trust
Payable on Death account under the provisions of North Carolina General
Statute 54-109.57 that:
1. During my
lifetime I my (or our) lifetime I (or we) may withdraw the money in
the account; and
2. By written
direction to the credit union (or name of institution) I (or we),
individually or jointly, may change the beneficiary; beneficiary
or beneficiaries; and
3. Upon my (or
our) death the money remaining in the account will belong to the beneficiary,
beneficiary or beneficiaries, and the money will not be inherited by my (or
our) heirs or be controlled by my will.
_________________________
--------------------------------------"
(a1) This section shall not be deemed exclusive. Deposit accounts not conforming to this section shall be governed by other applicable provisions of the General Statutes or the common law, as appropriate.
(b) Whenever
the beneficiary of a trust account does not survive the trustee, then the
account and any balance thereof which exists shall be held by the trustee in
the trustee's own right and for the trustee's own use and benefit.
(c) No addition to such
accounts, nor any withdrawal, payment, or change of beneficiary shall affect
the nature of such accounts as trust Payable on Death accounts,
or affect the right of a trustee any owner to terminate the
account.
(d) Nothing herein
contained shall be construed to repeal or modify any of the provisions of G.S.
105-24, relating to the administration of the estate tax laws of this State, or
provisions of law relating to estate taxes. This
section does not repeal or modify any provisions of law relating to estate
taxes."
part iii. accounts at savings and loan associations.
SECTION 3. G.S. 54B-130 reads as rewritten:
"§ 54B-130.
Trust Payable on Death (POD) accounts.
(a) If any person or
persons establishing a withdrawable account shall execute a written agreement
with the association containing a statement that it is executed pursuant to the
provisions of this subsection section and providing for the
account to be held in the name of such the person or persons
as trustee for not more than one person owner or owners for one or
more persons designated as beneficiary, beneficiaries, the
account and any balance thereof shall be held as a trust Payable on
Death account with the following incidents:
(1) The trustee Any
owner during the trustee's owner's lifetime may change the
any designated beneficiary by a written direction to the association.
(1a) If there are two or more owners of a Payable on Death account, the owners shall own the account as joint tenants with right of survivorship and, except as otherwise provided in this section, the account shall have the incidents set forth in G.S. 54B-129.
(2) The trustee Any
owner may withdraw funds by writing checks or otherwise, as set forth in the
account contract, and receive payment in cash or check payable to the trustee's
owner's personal order. Such payment or withdrawal shall constitute a
revocation of the trust agreement as to the amount withdrawn.
(3) If the only
one beneficiary is living and of legal age at the death of the trustee,
last surviving owner, the beneficiary shall be the holder of the
account, and payment by the association to the holder shall be a total
discharge of the association's obligation as to the amount paid. If two or
more beneficiaries are living at the death of the last surviving owner, they
shall be owners of the account as joint tenants with right of survivorship as
provided in G.S. 54B-129, and payment by the association to the owners or to
any of the owners shall be a total discharge of the association's obligation as
to the amount paid.
(4) If the beneficiary
predeceases the trustee, one or more owners survive the last surviving
beneficiary, the account shall become an individual account of the trustee
owner, or a joint account with right of survivorship of the owners, and
shall have the legal incidents of an individual account. account in
the case of a single owner or a joint account with right of survivorship, as
provided in G.S. 54B-129, in the case of multiple owners.
(5) If the named only
one beneficiary is living and that beneficiary is not of legal age
at the death of the trustee, last surviving owner, the
association shall transfer the funds in the account to the general guardian or
guardian of the estate, if any, of the minor beneficiary. If no guardian of the
minor beneficiary has been appointed, the association shall hold the funds in a
similar interest bearing account in the name of the minor until the minor
reaches the age of majority or until a duly appointed guardian withdraws the
funds.
(6) Prior to the death
of the last surviving owner, no beneficiary shall have any ownership interest
in a Payable on Death account. Funds in a trust Payable on Death
account established pursuant to this subsection shall belong to the beneficiary
or beneficiaries upon the death of the trustee last surviving
owner and the funds shall be subject only to the personal representative's
right of collection as set forth in G.S. 28A-15-10(a)(1). Payment by the
association of funds in the trust Payable on Death account to the
beneficiary or beneficiaries shall terminate the personal
representative's authority under G.S. 28A-15-10(a)(1) to collect against the
association for the funds so paid, but the personal representative's authority
to collect such funds from the beneficiary or beneficiaries is not
terminated.
The person or persons establishing an account under this subsection shall sign a statement containing language set forth in a conspicuous manner and substantially similar to the following:
"SAVINGS AND LOAN (or name of institution)
TRUST
payable on death ACCOUNT
G.S. 54B-130(a)
I (or we) understand that by establishing a trust
Payable on Death account under the provisions of North Carolina General
Statute 54B-130(a) that:
1. During my (or our) lifetime I (or we), individually or jointly, may withdraw the money in the account; and
2. By written direction to the savings and loan association (or name of institution) I (or we), individually or jointly, may change the beneficiary; and
3. Upon my (or
our) death the money remaining in the account will belong to the beneficiary,
beneficiaries, and the money will not be inherited by my (or our)
heirs or be controlled by my will.
_________________________
--------------------------------------"
(a1) This section shall not be deemed exclusive. Deposit accounts not conforming to this section shall be governed by other applicable provisions of the General Statutes or the common law, as appropriate.
(b) Whenever
the beneficiary of a trust account does not survive the trustee then the
account and any balance thereof which exists shall be held by the trustee in
the trustee's own right and for the trustee's own use and benefit.
(c) No addition to such
accounts, nor any withdrawal, payment, or change of beneficiary shall affect
the nature of such accounts as trust Payable on Death accounts,
or affect the right of a trustee any owner to terminate the
account.
(d) This section does not repeal or modify any provisions of laws relating to estate taxes."
part iv. accounts at savings banks.
SECTION 4. G.S. 54C-166 reads as rewritten:
"§ 54C-166.
Trust Payable on Death (POD) accounts.
(a) If a person or
persons establishing a withdrawable account executes a written agreement with
the savings bank containing a statement that it is executed under this subsection
section and providing for the account to be held in the name of the
person or persons as trustee for not more than one person owner
or owners for one or more persons designated as beneficiary, beneficiaries,
the account and any balance of the account is held as a trust Payable
on Death account with the following incidents:
(1) The trustee Any
owner during the trustee's owner's lifetime may change the
any designated beneficiary by a written direction to the savings bank.
(1a) If there are two or more owners of a Payable on Death account, the owners shall own the account as joint tenants with right of survivorship and, except as otherwise provided in this section, the account shall have the incidents set forth in G.S. 54C-165.
(2) The trustee Any
owner may withdraw funds by writing checks or otherwise, as set forth in
the account contract, and receive payment in cash or check payable to the trustee's
owner's personal order. The payment or withdrawal shall constitute a
revocation of the trust agreement as to the amount withdrawn.
(3) If the only
one beneficiary is living and of legal age at the death of the trustee,
last surviving owner, the beneficiary is the holder of the account, and
payment by the savings bank to the holder is a total discharge of the savings
bank's obligation as to the amount paid. If two or more beneficiaries are
living at the death of the last surviving owner, they shall be owners of the
account as joint tenants with right of survivorship as provided in G.S.
54C-165, and payment by the savings bank to the owners or to any of the owners
shall be a total discharge of the savings bank's obligation as to the amount
paid.
(4) If the beneficiary
predeceases the trustee, one or more owners survive the last surviving
beneficiary, the account shall become an individual account of the trustee
owner, or a joint account with right of survivorship of the owners, and
shall have the legal incidents of an individual account. account in
the case of a single owner or a joint account with right of survivorship, as
provided in G.S. 54C-165, in the case of multiple owners.
(5) If the named only
one beneficiary is living and that beneficiary is not of legal age
at the death of the trustee, last surviving owner, the savings
bank shall transfer the funds in the account to the general guardian or
guardian of the estate, if any, of the minor beneficiary. If no guardian of the
minor beneficiary has been appointed, the savings bank shall hold the funds in
a similar interest-bearing account in the name of the minor until the minor
reaches the age of majority or until a duly appointed guardian withdraws the
funds.
(6) Prior to the death
of the last surviving owner, no beneficiary shall have any ownership interest
in a Payable on Death account. Funds in a trust Payable on Death
account established under this subsection shall belong to the beneficiary or
beneficiaries upon the death of the last surviving owner trustee
and the funds shall be subject only to the personal representative's right of
collection as set forth in G.S. 28A-15-10(a)(1). Payment by the savings bank of
funds in the trust Payable on Death account to the beneficiary or
beneficiaries shall terminate the personal representative's authority under
G.S. 28A-15-10(a)(1) to collect against the savings bank for the funds so paid,
but the personal representative's authority to collect the funds from the
beneficiary or beneficiaries is not terminated.
The person or persons establishing an account under this subsection shall sign a statement containing language set forth in a conspicuous manner and substantially similar to the following:
"SAVINGS BANK (or name of institution) TRUST payable on death ACCOUNT
G.S. 54C-166(a)
I (or we) understand that by establishing a trust
Payable on Death account under G.S. 54C-166(a) that:
1. During my
lifetime I my (or our) lifetime, I (or we) may withdraw the money in
the account; and
2. By written direction to the savings bank (or name of institution) I (or we), individually or jointly, may change the beneficiary; and
3. Upon my (or
our) death the money remaining in the account will belong to the beneficiary,
beneficiary or beneficiaries and the money will not be inherited by my (or
our) heirs or be controlled by my will.
_________________________
--------------------------------------"
(a1) This section is not deemed exclusive. Deposit accounts not conforming to this section are governed by other applicable law, as appropriate.
(b) Whenever
the beneficiary of a trust account does not survive the trustee, then the
account and any balance of the account that exists is held by the trustee in
the trustee's own right and for the trustee's own use and benefit.
(c) No addition to the
accounts, nor any withdrawal, payment, or change of beneficiary shall affect
the nature of the accounts as trust Payable on Death accounts, or
affect the right of a trustee any owner to terminate the account.
(d) This section does not repeal or modify any law relating to estate taxes."
Part v. conforming amendments to the general statutes.
SECTION 5. G.S. 36A-120 reads as rewritten:
"§ 36A-120.
Discretionary revocable trust Payable on Death accounts in
financial institution.
Trusts Payable on Death accounts created under
the provisions of G.S. 53-146.2, G.S. 54C-166, G.S. 54-109.57 or G.S.
54B-129 are governed by the provisions of those statutes."
SECTION 6. G.S. 36A-125.1(3) reads as rewritten:
"(3) "Trust"
means an express noncharitable trust. A trust is noncharitable if it is neither
a wholly charitable trust nor a charitable split-interest trust subject to the
provisions of Article 4 or 4A of Chapter 36A of the General Statutes. The term
"trust" does not include constructive trusts, resulting trusts,
conservatorships, personal representatives, trust accounts Payable on
Death accounts as defined in G.S. 53-146.2, 54-109.57, G.S. 54C-166, and
G.S. 54B-130, trust funds subject to G.S. 90-210.61, custodial arrangements
pursuant to G.S. 33A-1 through G.S. 33A-24 and G.S. 33B-1 through G.S. 33B-22,
business trusts providing for certificates to be issued to beneficiaries,
common trust funds, voting trusts, security arrangements, liquidation trusts,
and trusts for the primary purpose of paying debts, dividends, interest,
salaries, wages, profits, pensions, or employee benefits of any kind, or any
arrangement under which a person is nominee or escrowee for another."
SECTION 7. G.S. 36A-161(d) reads as rewritten:
"(d) This Article does not apply:
(1) Unless the provisions of the trust provide otherwise by specific reference to this Article, to:
a. Trusts under any federal employee retirement income security statute or other retirement or pension trusts;
b. Trusts which are created by legislative act;
c. Trusts which are created by or pursuant to premarital or postmarital agreements, divorce settlements, settlements of other proceedings or disputes;
d. Transfers under the Uniform Transfers to Minors Act;
e. Transfers under the Uniform Custodial Trust Act; or
f. Honorary trusts, trusts for pets, and trusts for cemetery lots.
(2) To trusts imposed or required under another chapter of the General Statutes or by rule in which the investment of the trust funds is regulated by the other chapter or by rule, unless a provision of the other chapter or the rule provides otherwise by a specific reference to this Article.
(3) To:
a. Constructive trusts and resulting trusts;
b. Guardianship, conservatorship, and estates managed by personal representatives; or
c. Trust
Payable on Death accounts as defined in G.S. 53-146.2, 54-109.57, 54C-166,
and G.S. 54B-130; or
d. Business trusts providing for certificates to be issued to beneficiaries, common trust funds, voting trusts, security arrangements, liquidation trusts, and trusts for the primary purpose of paying debts, dividends, interests, salaries, wages, profits, pensions, or employee benefits of any kind, and any arrangement under which a person is nominee or escrowee for another."
part vi. effective date.
SECTION 8. This act becomes effective October 1, 2001, and applies to accounts opened on or after that date.
In the General Assembly read three times and ratified this the 28th day of June, 2001.
s/ Beverly E. Perdue
President of the Senate
s/ James B. Black
Speaker of the House of Representatives
s/ Michael F. Easley
Governor
Approved 11:51 a.m. this 4th day of July, 2001