The North Carolina trustee's duty to inform — and the safe-harbor report

Information at reasonable intervals

N.C. Gen. Stat. § 36C-8-813(a)(1) provides that the trustee gives reasonably complete and accurate information as to the nature and amount of the trust property, at reasonable intervals, to any qualified beneficiary who is a distributee or permissible distributee of trust income or principal. The statute names no schedule; the duty does not include informing a beneficiary in advance of transactions (N.C. Gen. Stat. § 36C-8-813(b)(1)).

What any qualified beneficiary may ask for

On a reasonable request of any qualified beneficiary, the trustee provides a copy of the trust instrument, reasonably complete and accurate information about the nature and amount of the trust property, and reasonable inspections of the subject matter of the trust and its accounts and other documents (N.C. Gen. Stat. § 36C-8-813(a)(2)). A qualified beneficiary is a living beneficiary who is, would be if the present interests ended, or would be if the trust ended that day, a distributee or permissible distributee (N.C. Gen. Stat. § 36C-1-103(15)).

The safe-harbor report

N.C. Gen. Stat. § 36C-8-813(b)(2) provides that a trustee is considered to have discharged the interval duty to a qualified beneficiary for the matters disclosed by a report sent at least annually and at the trust's termination that describes the trust property, liabilities, receipts and disbursements — including the source and amount of the trustee's compensation — and lists the trust assets with their market values, estimated where uncertain. No presumption arises that a trustee who does not send such a report failed the duty.

Accounting to the clerk of superior court is a separate track, only where the instrument directs it or another law calls for it (N.C. Gen. Stat. § 36C-2-208(a)) — as for a testamentary trustee under a will executed before January 1, 2004, unless the will provides otherwise (N.C. Gen. Stat. § 36C-2-209).

Waivers, and what the terms may change

A qualified beneficiary may waive the right to a report or other information and may withdraw the waiver as to the future (N.C. Gen. Stat. § 36C-8-813(c)). The information duty is not among the rules the terms of a trust cannot change (N.C. Gen. Stat. § 36C-1-105(b)), so a trust's own provisions on reporting are read first. No report starts a special limitation period; the outside bar is five years (N.C. Gen. Stat. § 36C-10-1005).

The statutes, verbatim

• Definitions

  N.C. Gen. Stat. § 36C-1-103 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Limitation of action against trustee

  N.C. Gen. Stat. § 36C-10-1005 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Accounting to the clerk

  N.C. Gen. Stat. § 36C-2-208 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Duty to inform and report

  N.C. Gen. Stat. § 36C-8-813 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

Common questions

Frequently asked questions

Does a North Carolina trustee have to send an annual accounting?

The statute calls for no periodic report. A report sent at least annually and at termination with the contents N.C. Gen. Stat. § 36C-8-813(b)(2) lists is a safe harbor for the information duty, and no presumption arises against a trustee who sends none.

Can a North Carolina beneficiary get a copy of the trust?

Yes — a qualified beneficiary may make a reasonable request for a copy of the trust instrument, information about the trust property and a reasonable inspection (N.C. Gen. Stat. § 36C-8-813(a)(2)).

Does a report shorten the time to sue a North Carolina trustee?

No. North Carolina has no report-triggered limitation: no proceeding for breach of trust may be commenced more than five years after the first of the trustee's removal, resignation or death, the end of the beneficiary's interest or the trust's termination, and Chapter 1's periods apply otherwise (N.C. Gen. Stat. § 36C-10-1005).

General information about North Carolina law, not legal advice.