You were named successor trustee. What does North Carolina law expect?

Accepting, or declining, the office

A person designated as trustee becomes trustee by accepting. N.C. Gen. Stat. § 36C-7-701(a) provides that a designated trustee accepts by substantially complying with a method of acceptance the terms provide or — where they provide none, or the method is not expressly exclusive — by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance. A designated trustee who has not accepted may decline, and one who does not accept within 120 days after written notice to accept the trusteeship is provided is considered to have rejected it (N.C. Gen. Stat. § 36C-7-701(b)).

Where no cotrustee remains, a vacancy in a noncharitable trust is filled by the person the terms designate, then by a person the qualified beneficiaries appoint unanimously, then by the court (N.C. Gen. Stat. § 36C-7-704(c)).

The duties that apply from the first day

Under N.C. Gen. Stat. § 36C-8-801, on accepting a trusteeship the trustee administers the trust in good faith, in accordance with its terms and purposes and the interests of the beneficiaries. The trustee takes reasonable steps to take control of and protect the trust property (N.C. Gen. Stat. § 36C-8-809), keeps adequate records and keeps the trust property separate from the trustee's own (N.C. Gen. Stat. § 36C-8-810), and within a reasonable time reviews the assets and decides what to keep or sell (N.C. Gen. Stat. § 36C-9-904).

No opening notice — the information duty instead

North Carolina sets no notice after acceptance, no notice of irrevocability and no notice of trust. N.C. Gen. Stat. § 36C-8-813(a) provides instead that the trustee gives reasonably complete and accurate information about the nature and amount of the trust property, at reasonable intervals, to each qualified beneficiary who is a distributee or permissible distributee, and answers any qualified beneficiary's reasonable request for a copy of the instrument, that information or an inspection.

One notice can run from the death itself: where the settlor was receiving medical assistance at death, the trust was revocable then and the trustee knows of the assistance within 90 days, the trustee notifies the Division of Health Benefits of the death within 90 days of it (N.C. Gen. Stat. § 36C-8-818). Whether the conditions hold is a question for the facts, never assumed.

The estate beside the trust

A revocable trust rarely holds everything. Property left outside it passes by will or, without one, by descent (N.C. Gen. Stat. §§ 29-14, 29-15), by beneficiary designation or by survivorship. After the settlor's death the property of a trust that was revocable at the death answers for the settlor's creditors, the estate's costs, the funeral and the allowances to the extent the probate estate is inadequate (N.C. Gen. Stat. § 36C-5-505(a)(3)).

Creditors are barred through an estate's published notice to creditors (N.C. Gen. Stat. §§ 28A-14-1, 28A-19-3). With no estate open, the trustee of the settlor's revocable trust may ask the clerk of superior court to be appointed a limited personal representative to give that notice without an administration (N.C. Gen. Stat. § 28A-29-1).

The statutes, verbatim

• Accepting or declining trusteeship

  N.C. Gen. Stat. § 36C-7-701 ↗

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

• Duty to administer trust

  N.C. Gen. Stat. § 36C-8-801 ↗

  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.

• Notice of deceased Medicaid beneficiaries

  N.C. Gen. Stat. § 36C-8-818 ↗

  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

How does a North Carolina successor trustee accept the office?

By substantially complying with a method the terms provide or, where they provide none or the method is not expressly exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance (N.C. Gen. Stat. § 36C-7-701(a)).

What notices does a North Carolina trustee owe after accepting?

None at the outset. The trustee gives information at reasonable intervals to the distributee qualified beneficiaries and answers a qualified beneficiary's reasonable request (N.C. Gen. Stat. § 36C-8-813(a)); the Medicaid death notice goes to the Division of Health Benefits within 90 days of a death where its three conditions hold (N.C. Gen. Stat. § 36C-8-818).

Does a North Carolina successor trustee need a court order to act?

No. A successor named in the instrument takes office by accepting (N.C. Gen. Stat. § 36C-7-701), and succeeds to the original trustee's powers and title (N.C. Gen. Stat. § 36C-7-704(f)). The trustee may give a bank a certification of trust instead of the instrument (N.C. Gen. Stat. § 36C-10-1013).

General information about North Carolina law, not legal advice.