Want to understand the powers and limits that apply to your Trust?
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A North Carolina trustee may exercise, without court authorization, the powers the trust's terms confer and — unless the terms limit them — an unmarried competent owner's powers over the property and every power appropriate to proper administration (N.C. Gen. Stat. § 36C-8-815), with the specific powers of N.C. Gen. Stat. § 36C-8-816, all bounded by the fiduciary duties.
Last reviewed against the North Carolina Statutes and updated on 2026-11-01.
The general powers
N.C. Gen. Stat. § 36C-8-815(a) gives a trustee, without court authorization, the powers the trust's terms confer and, except as the terms limit them, all the powers over trust property that an unmarried competent owner has over individually owned property, any other powers appropriate to the proper investment, management, administration or distribution of the trust property, and the other powers the Chapter confers. None relieves the trustee of the fiduciary duties ((b)).
The specific powers
Without limiting the general powers, N.C. Gen. Stat. § 36C-8-816 lists, among others: collecting, investing and selling property; depositing trust money; borrowing and pledging; continuing or forming a business; exercising the rights of a securities owner; managing, improving and leasing real property; insuring the property; abandoning property of no value; settling claims; paying taxes and expenses; making tax elections; collecting insurance and benefit-plan proceeds; making loans to a beneficiary; paying a distribution for a minor or a beneficiary believed incompetent to a guardian, custodian, caregiver or separate fund; distributing in cash or in kind; resolving disputes by mediation or arbitration; employing agents; dividing a trust; renouncing under Chapter 31B; and obtaining digital assets under Chapter 36F.
Loyalty: the boundary on every power
A trustee administers the trust solely in the beneficiaries' interests (N.C. Gen. Stat. § 36C-8-802(a)). A transaction for the trustee's own account, or affected by a conflict between its fiduciary and personal interests, is voidable by an affected beneficiary — fair or not — unless the terms authorized it, the court approved it, the beneficiary consented or the time ran (N.C. Gen. Stat. § 36C-8-802(b)); a transaction with the trustee's spouse, relatives, agents or affiliates is rebuttably presumed affected by a conflict (N.C. Gen. Stat. § 36C-8-802(c)).
Discretion and its limits
However broad the discretion — "absolute", "sole" or "uncontrolled" included — a trustee abuses it by acting in bad faith, dishonestly or with an improper motive, or by failing to use judgment in accordance with the terms, purposes and interests (N.C. Gen. Stat. § 36C-8-814(a)). A beneficiary serving as trustee may not use a discretion that would otherwise be a general power of appointment for the trustee's own benefit except under an ascertainable standard (N.C. Gen. Stat. § 36C-8-814(b)).
Power holders
The trust's terms may give a power holder — a person other than a trustee — powers to direct or consent to investments, distributions or other administration, and other powers (N.C. Gen. Stat. §§ 36C-8A-1, 36C-8A-2). The trustee acts in accordance with a direction and is not liable for complying unless compliance is intentional misconduct, and has no duty to monitor the power holder (N.C. Gen. Stat. § 36C-8A-4).
Decanting
Under the North Carolina Uniform Trust Decanting Act, an authorized fiduciary with discretion over principal may distribute it to a second trust within the Act's limits — never reducing a vested interest (N.C. Gen. Stat. § 36C-8B-11) — after written notice at least 60 days before the effective date to the qualified beneficiaries and the others the Act lists (N.C. Gen. Stat. § 36C-8B-7).
People who deal with the trustee
A person other than a beneficiary who in good faith assists or deals for value with a trustee, without knowing the trustee is exceeding or improperly exercising its powers, is protected as if the power were properly exercised, and need not inquire into the trustee's powers (N.C. Gen. Stat. § 36C-10-1012).
Powers under the North Carolina Uniform Trust Code
Certification of trust
N.C. Gen. Stat. § 36C-10-1013 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Delegation by trustee
N.C. Gen. Stat. § 36C-8-807 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Powers of the settlor to direct or consent to the trustee's actions
N.C. Gen. Stat. § 36C-8-808 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
General powers of trustee
N.C. Gen. Stat. § 36C-8-815 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Specific powers of trustee
N.C. Gen. Stat. § 36C-8-816 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Powers of a power holder
N.C. Gen. Stat. § 36C-8A-2 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Decanting power
N.C. Gen. Stat. § 36C-8B-11 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Notice; exercise of the decanting power
N.C. Gen. Stat. § 36C-8B-7 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Trustee's power to adjust between principal and income
N.C. Gen. Stat. § 37A-1-104 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
General information about North Carolina law, not legal advice.
Frequently asked questions
- Does a North Carolina trustee need court permission to sell trust property?
- Not ordinarily: the trustee may acquire or sell property, for cash or on credit, at public or private sale, without court authorization (N.C. Gen. Stat. §§ 36C-8-815, 36C-8-816(2)) — subject to the duties of loyalty and prudence.
- Can a North Carolina trustee buy trust property?
- A purchase for the trustee's own account is voidable by an affected beneficiary, whether fair or not, unless the terms authorized it, the court approved it, the beneficiary consented or the time ran (N.C. Gen. Stat. § 36C-8-802(b)).
- Can a North Carolina trustee lend money to a beneficiary?
- The specific powers include loans to a beneficiary on terms the trustee considers fair and reasonable, with a lien on future distributions (N.C. Gen. Stat. § 36C-8-816(18)).
- What is decanting in North Carolina?
- An authorized fiduciary's distribution of a trust's principal to a second trust under the North Carolina Uniform Trust Decanting Act, within its limits and after 60 days' written notice (N.C. Gen. Stat. §§ 36C-8B-7, 36C-8B-11).
General information about North Carolina law, not legal advice.