Selma Spendthrift was the beneficiary of an inheritance, or so she thought. Because of her tendency to spend money like it was going out of style her parents had placed all the real estate they owned in a testamentary trust with Selma being named the beneficiary. After her parents had passed Selma had wanted to sell the real estate but had been advised by her attorney that the terms of the trust did not allow for a sale of the property during her lifetime. The trust stated that the trustee was to "manage and invest the assets of the trust for the benefit of the beneficiary". It did not contain any provision for the property to be sold nor were powers of sale given to the trustee.
Selma has been approached by a real estate developer who would like to buy the real estate in her trust to build the new Wally World on. Excited about the possibility of making a lot of money on the sale Selma went to see her attorney again and inquire about finding a way to sell the real estate in her trust.
Her attorney, Wendall Wiseone, explained that she might just be in luck. Since she last inquired about her trust the law on trusts had changed in North Carolina. In 2005 the General Assembly adopted a modified version of the Uniform Trust Code and that law applied to previous existing trusts. He pulled a green book off the shelf and showed her a passage that he thought might be helpful. N.C.G.S. Section 36C-8-815 now provides:
(a) A trustee, without authorization by the court, may exercise:
(1) Powers conferred by the terms of the trust; or
(2) Except as limited by the terms of the trust:
a. All powers over the trust property that an unmarried competent owner has over individually owned property;
This last section was of particular interest to the attorney because it gave the trustee the same authority over trust property that an individual would have over individually owned property. An individual could do anything they wanted, within the bounds of the law, Wiseone explained and so a trustee of a trust now has that same kind of authority.
The UTC is designed to cure trust problems that were caused by a lack of trustee authority as well as addressing other issues that certifying attorneys have had to struggle with over the years. As Subsection (2) indicates a Settlor may still limit the authority a trustee has.