N.C. Gen. Stat. § 37A-1-101
Short title
Short title. This Chapter may be cited as the Uniform Principal and Income Act. (2003-232, s. 2.)
North Carolina General Statutes Chapter 37A — Chapter 37A.
North Carolina · statute · N.C. Gen. Stat. ch. 37A · 47 active provisions
N.C. Gen. Stat. § 37A-1-102
Definitions
Definitions. The following definitions apply in this Chapter: (1) "Accounting period" means a calendar year unless another 12-month period is selected by a fiduciary. The term includes a portion of a calendar year or other 12-month period that begins when an income interest begins or ends when an income interest ends.…
N.C. Gen. Stat. § 37A-1-103
Fiduciary duties; general principles
Fiduciary duties; general principles. (a) In allocating receipts and disbursements to or between principal and income, and with respect to any matter within the scope of Articles 2 and 3 of this Chapter, a fiduciary: (1) Shall administer a trust or estate in accordance with the terms of the trust or the will, even if t…
N.C. Gen. Stat. § 37A-1-104
Trustee's power to adjust
Trustee's power to adjust. (a) A trustee may adjust between principal and income to the extent the trustee considers necessary if the trustee invests and manages trust assets as a prudent investor, the terms of the trust describe the amount that may or shall be distributed to a beneficiary by referring to the trust's i…
N.C. Gen. Stat. § 37A-1-104.1
Definitions
Definitions. The following definitions apply to this Part: (1) Code. - The Internal Revenue Code of 1986, as amended from time to time, and any statutory enactment successor to the Code; reference to a specific section of the Code in this Part shall be considered a reference also to any successor provision dealing with…
N.C. Gen. Stat. § 37A-1-104.2
Conversion in trustee's discretion without court approval
Conversion in trustee's discretion without court approval. (a) Any trustee, other than an interested trustee, or, where two or more persons are acting as trustees, a majority of the trustees who are not interested trustees (in either case hereafter "trustee"), may, in the trustee's sole discretion and without court app…
N.C. Gen. Stat. § 37A-1-104.3
Conversion with court approval
Conversion with court approval. (a) If any trustee desires to (i) convert an income trust to a total return unitrust, (ii) reconvert a total return unitrust to an income trust, or (iii) change the percentage used to calculate the unitrust amount or the method used to determine the fair market value of the trust but doe…
N.C. Gen. Stat. § 37A-1-104.4
Determination of unitrust amount
Determination of unitrust amount. (a) The fair market value of the trust shall be determined at least annually, using a valuation date selected by the trustee in its discretion. The trustee, in its discretion, may use an average of the fair market value on the same valuation date for the current fiscal year and not mor…
N.C. Gen. Stat. § 37A-1-104.5
Matters in trustee's discretion
Matters in trustee's discretion. In administering a total return unitrust, the trustee may, in its sole discretion but subject to the provisions of the governing instrument, determine: (1) The effective date of the conversion; (2) The timing of distributions, including provisions for prorating a distribution for a shor…
N.C. Gen. Stat. § 37A-1-104.6
No effect on principal distributions
No effect on principal distributions. Conversion to a total return unitrust under this Part shall not affect any other provision of the governing instrument, if any, regarding distributions of principal. For purposes of this Part, the distribution of a unitrust amount is considered a distribution of income and not of p…
N.C. Gen. Stat. § 37A-1-104.8
No liability on part of trustee or disinterested person acting in good faith
No liability on part of trustee or disinterested person acting in good faith. No trustee or disinterested person who in good faith takes or fails to take any action under this Part shall be liable to any person affected by the action or inaction, regardless of whether the person received written notice as provided in t…
N.C. Gen. Stat. § 37A-1-104.9
Applicability
Applicability. This Part shall apply to all trusts in existence on, or created after January 1, 2004, unless (i) the governing instrument contains a provision clearly expressing the settlor's intention that the current beneficiary or beneficiaries are to receive an amount other than a reasonable current return from the…
N.C. Gen. Stat. § 37A-1-104.21
Definitions
Definitions. (a) An "express total return unitrust" means a trust that has a governing instrument requiring the distribution at least annually of a unitrust amount equal to a fixed percentage of not less than three percent (3%) nor more than five percent (5%) per year of the net fair market value of the trust's assets,…
N.C. Gen. Stat. § 37A-1-104.22
Determination of unitrust amount
Determination of unitrust amount. (a) The unitrust amount to be distributed by the express total return unitrust may be determined in the governing instrument by reference to the net fair market value of the trust's assets determined annually or averaged on a multiple year basis. (b) The terms of the governing instrume…
N.C. Gen. Stat. § 37A-1-104.23
Effect of distribution of unitrust amount
Effect of distribution of unitrust amount. The distribution from an express total return unitrust of the fixed percentage of not less than three percent (3%) nor more than five percent (5%) reasonably apportions between the income beneficiaries and remaindermen the total return of an express total return unitrust. (200…
N.C. Gen. Stat. § 37A-1-104.24
Change or conversion of unitrust amount
Change or conversion of unitrust amount. (a) The terms of the governing instrument of an express total return unitrust may provide the method similar to the method provided under G.S. 37A-1-104.2(a) for changing the unitrust percentage or for converting from a unitrust to an income trust or for a reconversion of an inc…
N.C. Gen. Stat. § 37A-1-104.25
Determination of character of unitrust amount
Determination of character of unitrust amount. Unless the terms of the governing instrument of the express total return unitrust specifically provide otherwise, the trustee: (1) Shall consider the unitrust amount as paid from net accounting income determined as if the trust were not a unitrust; (2) Shall then consider…
N.C. Gen. Stat. § 37A-1-104.26
Unitrust amount in excess of a five percent payout
Unitrust amount in excess of a five percent payout. A trust that provides for a fixed percentage payout in excess of five percent (5%) per year is considered an express total return unitrust that pays out a fixed percentage of five percent (5%) per year and pays out principal to the extent that the fixed percentage pay…
N.C. Gen. Stat. § 37A-1-105
Judicial control of discretionary power
Judicial control of discretionary power. (a) The court shall not order a fiduciary to change a decision to exercise or not to exercise a discretionary power conferred by this Chapter unless it determines that the decision was an abuse of the fiduciary's discretion. A fiduciary's decision is not an abuse of discretion m…
N.C. Gen. Stat. § 37A-2-201
Determination and distribution of net income
Determination and distribution of net income. After a decedent dies, in the case of an estate, or after an income interest in a trust ends, the following rules apply: (1) A fiduciary of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from proper…
N.C. Gen. Stat. § 37A-2-202
Distribution to residuary and remainder beneficiaries
Distribution to residuary and remainder beneficiaries. (a) Each beneficiary described in G.S. 37A-2-201(4) is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one dis…
N.C. Gen. Stat. § 37A-3-301
When right to income begins and ends
When right to income begins and ends. (a) An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to a trust or successive income interes…
N.C. Gen. Stat. § 37A-3-302
Apportionment of receipts and disbursements when decedent dies or income interest begins
Apportionment of receipts and disbursements when decedent dies or income interest begins. (a) A trustee shall allocate an income receipt or disbursement, other than one to which G.S. 37A-2-201(1) applies to principal, if its due date occurs before a decedent dies in the case of an estate or before an income interest be…
N.C. Gen. Stat. § 37A-3-303
Apportionment when income interest ends
Apportionment when income interest ends. (a) In this section, "undistributed income" means net income received before the date on which an income interest ends. The term does not include an item of income or expense that is due or accrued or net income that has been added or is required to be added to principal under t…
N.C. Gen. Stat. § 37A-4-401
Character of receipts
Character of receipts. (a) In this section, "entity" means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization in which a trustee has an interest other than a trust or estate to which G.S. 37A-4-402 applies, a bu…
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