GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2023
SESSION LAW 2023-120
SENATE BILL 218
AN ACT to update and reorganize the general statutes relating to spousal and child's allowance in estates and to amend the general statutes to treat wills and revocable trusts alike in construction, interpretation, and administration when a marriage is dissolved by absolute divorce or annulment after execution of the will or revocable trust, as recommended by the north carolina bar association.
The General Assembly of North Carolina enacts:
part i. changes to yearly allowance in estates
SECTION 1.1. The following General Statutes are repealed:
(1) G.S. 30‑16.
(2) G.S. 30‑21.
(3) G.S. 30‑23.
(4) G.S. 30‑25.
(5) G.S. 30‑28.
(6) G.S. 30‑29.
(7) G.S. 30‑31.1.
(8) G.S. 30‑31.2.
SECTION 1.2. Article 4 of Chapter 30 of the General Statutes, as amended by Section 1.1 of this act, reads as rewritten:
"Article 4.
"Year's Allowance.
"Part 1. Nature of Allowance.
"§ 30‑15. When spouse entitled to allowance.
(a) Every surviving spouse
of an intestate or of a testator, decedent, whether or not
the surviving spouse has petitioned for an elective share, shall, unless the
surviving spouse has forfeited the surviving spouse's right thereto, as
provided by law, shall be entitled, out of the personal property
of the deceased spouse, entitled to receive an allowance of
having the value of sixty thousand dollars ($60,000) for the
surviving spouse's support for one year after the death of the deceased spouse.spouse
unless the spouse is barred from seeking an allowance under G.S. 31A‑1
or another applicable law. The
spouse's allowance shall be in addition to the spouse's share of the decedent's
estate if the decedent died intestate but shall be charged against the spouse's
share of the decedent's estate if the decedent died testate.
(b) The right of a surviving spouse to file a claim for an allowance must be exercised during the lifetime of the surviving spouse by (i) the surviving spouse, (ii) the surviving spouse's agent under a durable power of attorney, or (iii), with approval of the court, by the guardian of the surviving spouse's estate or general guardian. A claim for an allowance must be made by filing a verified petition with the clerk of court of the county in which venue would be proper under G.S. 28A‑3‑1. There is no time limitation on bringing a claim for an allowance except that, if a personal representative has been appointed for the decedent's estate, the claim must be made within six months after the issuance of letters testamentary or letters of administration. In addition, if a personal representative has been appointed for the decedent's estate, a copy of the verified petition must be personally delivered or sent by first‑class mail by the petitioner to the personal representative.
(c) If the surviving spouse dies after the petition is filed but before the claim for an allowance has been fully satisfied, any deficiency judgment existing at the time of the surviving spouse's death shall not expire.
(d) The surviving spouse may claim the allowance if,
at the death of the decedent, either the decedent or the surviving spouse was a
resident of this State. Such spouse's allowance shall be exempt from
any lien, lien by judgment or execution, acquired execution
against the property of the deceased spouse, and shall, in cases of testacy,
be charged against the share of the surviving spouse.decedent or any
other claim made against or owed by the decedent's estate. The spouse's
allowance takes priority over any child's allowance under G.S. 30‑17.
…
"§ 30‑17. When children entitled to an allowance.
(a) Whenever any parent dies survived by any Every
child of a decedent who is under the age of 18 years, 21 years
at the time of the decedent's death, including an adopted child or a child with
whom the widow may be pregnant at the death of her husband, or a child who is
less than 22 years of age and is a full‑time student in any educational
institution, or a child under 21 years of age who has been declared mentally
incompetent, or a child under 21 years of age who is totally disabled, or any
other person in utero, and every child who is under the age of 18
21 years residing with the deceased parent at the time of death
to at the time of the decedent's death with whom the deceased
parent or the surviving parent decedent stood in loco parentis,
every such child parentis at the time of death, shall be entitled to
receive an allowance having a value of five thousand dollars ($5,000)
ten thousand dollars ($10,000) for the child's support for the one
year next ensuing after the death of the parent. decedent.
The allowance shall be in addition to the child's share of the deceased
parent's decedent's estate and regardless of whether the
decedent died testate or intestate.
(b) The right of a child to file a claim for an allowance must be exercised during the lifetime of the child by the person with priority to file on behalf of the child as provided in subsection (c) of this section. A claim for an allowance must be made by filing a verified petition with the clerk of court of the county in which venue would be proper under G.S. 28A‑3‑1. There is no time limitation on bringing a claim for an allowance except that, if a personal representative has been appointed for the decedent's estate, the claim must be made within six months after the issuance of letters testamentary or letters of administration. In addition, if a personal representative has been appointed for the decedent's estate, a copy of the verified petition must be personally delivered or sent by first‑class mail by the petitioner to the personal representative.
(c) The person entitled to file a petition on behalf of the child for a child's allowance shall be in the following order of priority:
(1) The general guardian or guardian of the estate of the child, if any.
(2) The surviving parent of the child if the child resides with the surviving parent.
(3) The person with whom the child resides.
If the clerk of court determines that no person entitled to file a petition pursuant to this subsection is a fit or suitable individual, the clerk, upon the clerk's own motion, may appoint another individual if the clerk determines that individual better represents the best interests of the child as the representative.
(d) The child's allowance shall be exempt from
any lien by judgment or execution against the property of the deceased
parent. The personal representative of the deceased parent shall, within one
year after the parent's death, assign to every such child the allowance herein
provided for; but if there is no personal representative or if the personal
representative fails or refuses to act within 10 days after written application
by a guardian or next friend on behalf of the child, the allowance may be
assigned by a magistrate or clerk of court upon application.decedent or
any other claim made against or owed by the decedent's estate except that the
spouse's allowance under G.S. 30‑15 shall take priority over any
child's allowance. A child's allowance shall only be awarded after the full
spouse's allowance under G.S. 30‑15 has been awarded.
If the child resides with the
surviving spouse of the deceased parent at the time the allowance is paid, the
allowance shall be paid to the surviving spouse for the benefit of the child.
If the child resides with its surviving parent who is other than the surviving
spouse of the deceased parent, the allowance shall be paid to the surviving
parent for the use and benefit of the child. The payment shall be made
regardless of whether the deceased died testate or intestate or whether the
surviving spouse petitioned for an elective share under Article 1A of Chapter
30 of the General Statutes. Provided, however, the allowance shall not be
available to a deceased father's child born out of wedlock, unless the deceased
father has recognized the paternity of the child by deed, will, or other paper‑writing,
or unless the deceased father died prior to or within one year after the birth
of the child and is established to have been the father of the child by DNA
testing. If the child does not reside with a surviving spouse or a surviving
parent when the allowance is paid, the allowance shall be paid to the child's
general guardian or guardian of the estate, if any, and if none, to the clerk
of the superior court who shall receive and disburse the allowance for the
benefit of the child.
"§ 30‑18. From what property allowance assigned.
Such An allowance under
this Article shall be made in money awarded only out of cash or
property, other personal property than real property, of
the estate of the deceased spouse.decedent's estate. In the case of a
spouse's allowance, the cash or personal property awarded shall be distributed
to the spouse. In the case of a child's allowance, the cash or personal
property awarded shall be distributed to the person entitled to file for the
allowance on behalf of the child pursuant to G.S. 30‑17.
"Part 2. Assigned by Magistrate
or Clerk.
"§ 30‑19. Value of property ascertained.Property
awarded to surviving spouse and children.
The value determination of
the personal property assigned to be awarded to the surviving
spouse and children and the value thereof shall be ascertained made
by a magistrate or the clerk of court of the county in which administration
was granted or the will probated.venue would be proper under G.S. 28A‑3‑1.
"§ 30‑20. Procedure for assignment.assignment;
order of clerk.
(a) Upon the application of the surviving spouse, a
child by the child's guardian or next friend, or the personal representative of
the deceased, the clerk of superior court of the county in which the deceased
resided may assign the inquiry to a magistrate of the county. The clerk of court,
or magistrate upon assignment, court shall first ascertain the
person or persons if the surviving spouse is entitled to an
allowance according to the provisions of this Article, and determine the
money or other and, if so, enter an order setting forth the personal
property of the estate, and pay over estate to or assign be
awarded to the surviving spouse and to the children, if any, so much
thereof as they shall be spouse. Once the spouse's allowance has been
awarded, the clerk of court shall next ascertain if any children of the
decedent are entitled to as provided in an allowance according to
the provisions of this Article. Article, and, if so, enter an
order setting forth the personal property of the estate to be awarded for the
child's allowance. If a personal representative has been appointed for the
decedent's estate, the clerk of court shall provide a copy of any order
awarding an allowance to the personal representative of the decedent's estate.
(b) Any deficiencies shall be made up from any of
the personal property of the deceased, and if If the personal
property of the estate shall be is insufficient to satisfy the allowance,
allowances awarded, the clerk of the superior court shall enter
judgment against the personal representative decedent's estate for
the amount of the deficiency, to be paid deficiency. If a personal
representative has been appointed for the decedent's estate, the deficiency
shall be satisfied by the personal representative when a sufficiency of
such assets shall come into the possession of the personal representative's
hands.representative.
(c) The clerk of court may, on the clerk's own motion, determine that a hearing is necessary to determine whether a year's allowance should be awarded pursuant to the provisions of this Article and, if so, what personal property should be awarded. If the clerk of court makes such a determination, the clerk shall direct the petitioner to commence a contested estate proceeding pursuant to G.S. 30‑23 in order to determine the year's allowance.
…
"§ 30‑21.1. Reporting of allowances by personal representative.
If the assets awarded as part of a spouse's allowance or a child's allowance are distributed directly to the spouse or the petitioner for the child and never come into the possession of the personal representative, the assets shall not be reported on the inventory for the decedent's estate or on any subsequent accounting.
…
"§ 30‑23.1. Contested proceeding regarding allowance.
(a) If no contested estate proceeding under G.S. 30‑20(c) was commenced to determine an award of an allowance under this Article, any person with standing, including the personal representative of the decedent's estate, may bring a proceeding to challenge the award of a spousal allowance or a child's allowance, including, but not limited to, a proceeding to challenge the validity of an award of a year's allowance, a proceeding to challenge the amount of a year's allowance awarded, and a proceeding to challenge the assets awarded as part of a year's allowance. If a contested estate proceeding was commenced under G.S. 30‑20(c), then any person with standing, including the personal representative of the decedent's estate, who was not a party to the contested estate proceeding may bring a proceeding in accordance with this section.
(b) Any proceeding brought pursuant to this section shall be conducted as an estate proceeding in accordance with the provisions of Article 2 of Chapter 28A of the General Statutes and must be brought within one year of the date the order awarding the year's allowance was entered.
…
"Part 3. Assigned in Superior
Court.Additional Year's Allowance.
"§ 30‑27. Surviving spouse or child may apply to
superior court.for additional allowance.
In addition to any support
otherwise assigned to the A surviving spouse or child under this Article, without
application to the personal representative, the surviving spouse, or the child
through the child's guardian or next friend may, after the date specified in
the general notice to creditors as provided for in G.S. 28A‑14‑1(a),
and may file an estate proceeding with the clerk of court seeking an
award of additional allowance in excess of the amount allowed to the spouse or
child under G.S. 30‑15 or G.S. 30‑17. Any such proceeding
must be filed within one year after of the date of the
decedent's death, apply to the superior court of the county in which administration
was granted or the will probated to have a year's support assigned at an amount
other than prescribed in G.S. 30‑15 and G.S. 30‑17.except
that if a personal representative was appointed for the decedent's estate, any
such proceeding must be filed within six months after the issuance of letters
testamentary or letters of administration. Any proceeding under this section
shall proceed as a contested estate proceeding under Article 2 of Chapter 28A
of the General Statutes.
…
"§ 30‑30. Judgment.
The clerk of superior court
shall hear the matter and determine whether the petitioner surviving
spouse or child is entitled to some or all of the relief sought and, if the
clerk determines that the petitioner spouse or child is so
entitled, the clerk shall determine the money or other personal property of enter
judgment against the estate and assign to the petitioner a sufficiency
thereof for petitioner's support for one year from the decedent's death. Any
deficiency shall be made up from any of the personal property of the deceased,
and if the personal property of the estate shall be insufficient for such
support, the clerk of superior court shall enter judgment against the for
the amount of the deficiency. If a personal representative for has
been appointed for the decedent's estate, the amount of such deficiency,
to be paid deficiency shall be satisfied by the personal representative when
a sufficiency of such assets shall come into the possession of the personal
representative's hands. representative. Any judgment so rendered
shall have the same priority over other debts and claims against the estate as
an allowance assigned pursuant to G.S. 30‑15 or G.S. 30‑17.
"§ 30‑31. Amount of allowance.
The In determining the amount of additional allowance to award
pursuant to G.S. 30‑27, the clerk
of superior court may assign to the petitioner a value an
amount sufficient for the support of the petitioner according to
the estate and condition of the decedent and without regard to the dollar
limitations set forth in this Chapter; Article, provided that the
following criteria are met:
(1) but the value The amount allowed shall
be is fixed with due consideration for other persons entitled to
allowances for year's support from the decedent's estate; estate
under this Article and the financial condition of the decedent's estate.
(2) and the The total value of all
allowances shall does not in any case exceed the one half one‑half
of the average decedent's annual net income of after‑tax
income, averaged over the deceased for three calendar years next
preceding the deceased's calendar year of the decedent's death.
As used in this subdivision, the term "annual after‑tax income"
means income remaining after all applicable deductions against the income,
including deductions for federal and State income taxes attributable to the
income, are taken.
(3) Attorneys' fees and costs awarded to the
petitioner under G.S. 6‑21 shall be are paid as an
administrative expense of the estate.
…."
SECTION 1.3. G.S. 28A‑15‑10 reads as rewritten:
"§ 28A‑15‑10. Assets of decedent's estate for limited purposes.
(a) When needed to satisfy claims against a decedent's estate, assets may be acquired by a personal representative or collector from the following sources:
(1) Tentative trusts created by the decedent in savings accounts for other persons.
(2) Gifts causa mortis made by the decedent.
(3) Joint deposit accounts with right of survivorship created by decedent pursuant to the provisions of G.S. 41‑2.1 or otherwise; and joint tenancies with right of survivorship created by decedent in corporate stocks or other investment securities.
(4) An interest in a security passing to a beneficiary pursuant to the provisions of Article 4 of Chapter 41 of the General Statutes.
Such assets shall be acquired solely for the purpose of satisfying such claims, however, and shall not be available for distribution to heirs or devisees.
(b) Where there are not sufficient personal and real assets of the decedent to satisfy all the debts and other claims against the decedent's estate, the personal representative shall have the right to sue for and recover any and all personal property or real property, or interest therein, which the decedent may in any manner have transferred or conveyed with intent to hinder, delay, or defraud the decedent's creditors, and any personal property or real property, or interest therein, so recovered shall constitute assets of the estate in the hands of the personal representative for the payment of debts and other claims against the estate of the decedent. But if the alienee has sold the personal property or real property, or interest therein, so fraudulently acquired by the alienee from the decedent to a bona fide purchaser for value without notice of the fraud, then such personal property or real property, or interest therein, may not be recovered from such bona fide purchaser but the fraudulent alienee shall be liable to the personal representative for the value of the personal property or real property, or interest therein, so acquired and disposed of to a bona fide purchaser. If the whole recovery from the fraudulent alienee shall not be necessary for the payment of the debts and other claims against the estate of the decedent, the surplus shall be returned to such fraudulent alienee or the fraudulent alienee's assigns.
(b1) Any asset acquired by a personal representative or collector under this section shall first be used to pay the allowances allowed to a spouse and children under Article 4 of Chapter 30 of the General Statutes. After the allowances are fully satisfied, an asset may be used to satisfy other claims against a decedent's estate.
(c) Where there has been a
recovery in an action for wrongful death, the same shall not be applied to the
payment of debts and other claims against the estate of decedent or devises,
except as to the payment of reasonable burial and funeral expenses and
reasonable hospital and medical expenses incident to the injury resulting in
death and as limited and provided in G.S. 28‑18‑2.G.S. 28A‑18‑2."
part ii. changes to treatment of former spouses in estates and trusts
SECTION 2.1. G.S. 31‑5.4 reads as rewritten:
"§ 31‑5.4. Revocation by divorce or annulment; revival.
(a) Dissolution of Unless a contrary intent
is expressly indicated in the will, if the testator's marriage is dissolved
by absolute divorce or annulment after making the execution of a
will does not revoke the will of any testator but, unless otherwise
specifically provided in the will, it revokes all provisions in the will
in favor of then the testator's former spouse or purported former
spouse, shall be deemed to have predeceased the testator for all
purposes related to the construction, interpretation, or administration of that
will. This section shall apply to all provisions of the testator's will, including,
but not by way of limitation, any provision conferring a general or special
power of appointment on the former spouse or purported former spouse and
any appointment of the former spouse or purported former spouse as
executor, trustee, conservator, or guardian. guardian, or any other
fiduciary or nonfiduciary position.
(b) This section shall not apply to a will if the following occur:
(1) The testator executes a subsequent valid testamentary document that makes express reference to the will, such as by date of the will, and which modifies the will.
(2) If provisions are revoked solely by this
section, they are revived by the testator's remarriage to The testator
remarries the former spouse prior to the testator's death, unless the
remarriage is subsequently dissolved by absolute divorce or annulment.
(c) or As used in this section, the term "former
spouse" includes a purported former spouse."
SECTION 2.2. G.S. 36C‑6‑606 reads as rewritten:
"§ 36C‑6‑606. Revocation of provisions in revocable trust by divorce or annulment; revival.
(a) Dissolution of Unless a contrary intent
is expressly indicated in the revocable trust, if the settlor's marriage is
dissolved by absolute divorce or annulment after executing the
execution of a revocable trust revokes all provisions in the trust in
favor of trust, then the settlor's former spouse, spouse
shall be deemed to have predeceased the settlor for all purposes related to the
construction, interpretation, or administration of that revocable trust. This
section shall apply to all provisions of the settlor's revocable trust, including,
but not by way of limitation, any provision conferring a general or special
power of appointment on the former spouse and any appointment of the former
spouse as trustee. Property prevented from passing to the former spouse
because of revocation by divorce or absolute annulment passes as if the former
spouse failed to survive the settlor, and other provisions conferring some
power or office on the former spouse are interpreted as if the former spouse
failed to survive the settlor. executor, trustee, conservator, guardian,
or any other fiduciary or nonfiduciary position.
(b) This section shall not apply to a revocable trust if any of the following occur:
(1) The settlor executes a subsequent valid amendment to the revocable trust, such as by date of the revocable trust, and which modifies the revocable trust.
(2) If provisions are revoked solely by this
section, they are revived by the settlor's remarriage to The settlor
remarries the former spouse. spouse prior to the settlor's death,
unless the remarriage is subsequently dissolved by absolute divorce or
annulment.
(c) The reference to As used in this section,
the term "former spouse" in this section includes a purported
former spouse."
part iii. Effective date
SECTION 3.1. Sections 1.2 and 1.3 of this act are effective March 1, 2024, and apply to decedents dying on or after that date. Sections 2.1 and 2.2 of this act are effective March 1, 2024, and apply to wills probated on or after that date. Except as otherwise provided, this act is effective March 1, 2024.
In the General Assembly read three times and ratified this the 13th day of September, 2023.
s/ Phil Berger
President Pro Tempore of the Senate
s/ Tim Moore
Speaker of the House of Representatives
s/ Roy Cooper
Governor
Approved 2:20 p.m. this 14th day of September, 2023