The Statewide Title Newsletter and Legal Memorandum

View Current Newsletter - Search The Archive 
Sign UpPrint

Issue  2  Article  3
Published:  9/1/1995

View the Entire Newsletter


Various New Statutes
Ed Urban

Summary Administration - Senate Bill 244

New Article 28 of Chapter 28A becomes effective January 1, 1996 and applies to estates of decedents dying on or after that date.

The act can be utilized when the surviving spouse is (1) the sole devisee or heir or (2) if the decedent died partially intestate, the sole devisee and heir. The procedure is not available if the decedent’s will says the procedure is not available or if the devise to the spouse is in trust. The procedure is effected by the spouse filing a petition under G.S. 28A-28-2 and the entry of an order by the clerk that no further administration is necessary. G.S. 28A-28-3. After entry of the order, the spouse may convey, sell, lease or mortgage real property devised to or inherited by the spouse at public or private sale and on such terms as the spouse determines. G.S. 28A-28-4(b). Specifically, G.S. 28A-17-12, pertaining to conveyances by heirs and devisees and validity against creditors and personal representatives, does not apply. As a result, by statute, the spouse must assume liability for (1) all debts not discharged by death and (2) taxes and valid claims against the decedent, to the extent of the value of property received. G.S. 28A-28-6.

G.S. 28A-28-7 says that the above does not preclude appointment of a "P.R." or collector. But it would seem that a transfer of title under G.S. 28A-28-4(b) prior to the appointment would be valid.

The Uniform Statutory Rule Against Perpetuities - Senate Bill 83

This act is effective October 1, 1995. See G.S. 41-15 through G.S. 41-22. It is a lengthy piece of legislation only highlighted here. It supersedes the common law rule. G.S. 41-22. It applies to a "nonvested property interest", a "general power of appointment," a "nongeneral power of appointment" and a "general testamentary power of appointment." A nonvested property interest or general power of appointment (not presently exercisable because of a condition precedent) or a nongeneral power of appointment or a general testamentary power of appointment is invalid unless (1) when the nonvested interest is created it is certain to vest or terminate no later than 21 years after the death of an individual then alive or when the general power is created, the condition precedent is certain to be satisfied or become impossible to satisfy no later than 21 years after such a death or when the nongeneral power or general testamentary power is created it is certain to be irrevocably exercised or otherwise terminate no later than 21 years after the death of an individual then alive; or (2) the nonvested interest either vests or terminates, or the condition precedent in a general power either is satisfied or becomes impossible to satisfy, or the nongeneral power or general testamentary power is irrevocably exercised or otherwise terminates, within 90 years of its creation. G.S. 41-15.

The possibility that a child will be born to an individual after the individual’s death is disregarded. G.S. 41-15(d).

Regarding "reformation," G.S. 41-17 states that, upon petition, a court shall reform a disposition in the manner that most closely approximates the transferor’s plan of distribution and is within the 90 year statutory period if: "(1) A nonvested property interest or a power of appointment becomes invalid under G.S. 41-15; (2) A class gift is not invalid under G.S. 41-15, but might become invalid under G.S. 41-15, and the time has arrived when the share of any class is to take effect in possession or enjoyment; or (3) A nonvested property interest that is not validated by G.S. 41-15(a)(1) can vest but not within 90 years after its creation."

G.S. 41-18 contains a long list of exceptions from the rule in G.S. 41-15 which should be consulted.

Regarding prospective application, G.S. 41-19 states: "(a) Except as extended by subsection (b) of this section, this Article applies to a nonvested property interest or a power of appointment that is created on or after October 1, 1995. For purposes of this section, a nonvested property interest or a power of appointment is created when the power is irrevocably exercised or when a revocable exercise becomes irrevocable. (b) If a nonvested property interest or a power of appointment was created prior to October 1, 1995, and is determined in a judicial proceeding, commenced on or after October 1, 1995, to violate this State’s rule against perpetuities as that rule existed before October 1, 1995, a court upon the petition of an interested person may reform the disposition in the manner that most closely approximates the transferor’s manifested plan of distribution and is within the limits of the rule against perpetuities applicable when the nonvested property interest or power of appointment was created."

Options In Gross And Other Interests In Land - Senate Bill 84

Senate Bill 84 becomes effective October 1, 1995 and pertains to interests created on or after that date. G.S. 41-33.

An "option in gross" or a "preemptive right" (defined in G.S. 41-28(2) and (3) to mean an option or right where the holder does not own any leasehold or other interest in the land) becomes invalid if not exercised within 30 years after its creation. G.S. 41-29.

A lease to commence in the future becomes invalid if its term does not actually commence in possession within 30 years after its execution. G.S. 41-30.

A "nonvested easement in gross" (defined in G.S. 41-28(1)) becomes invalid if it does not vest within 30 years after its creation.

A possibility of reverter, right of entry or executory interest becomes invalid as set out in G.S. 41-32 and the preceding fee simple becomes a fee simple absolute if: "the right to vest in possession of the possibility of reverter, right of entry, or executory interest depends on an event or events affecting the use of land and if the possibility of reverter, right of entry, or executory interest does not vest in possession within 60 years after its creation."

G.S. 41-32 does not apply to charitable or governmental interests excluded from Senate Bill 83 discussed above.

G.S. 41-29, G.S. 41-30 and G.S. 41-32 do not apply to arrangements relating solely to an interest in oil, gas or minerals.

G.S. 50-21(a); G.S. 50-20(c1); G.S. 50-2(i1); - House Bills 272 and 273

The changes to G.S. 50-21(a) and G.S. 50-20(c1) apply to actions filed on or after October 1, 1995. The change to G.S. 50-20(i1) applies to actions pending on or filed after that date. Deleted from G.S. 50-21(a) is the statement that [in most cases] a judgment for equitable distribution cannot be entered before entry of decree for absolute divorce. G.S. 50-20(i1) provides for pre-final equitable distribution judgment declaration of what is separate and marital property and property division. G.S. 50-20(c1) says that a second or subsequent spouse acquires no interest in marital property of his (her) spouse from a former marriage until a final determination of equitable distribution is made in the marital property of the spouse’s former marriage. But purchasers and encumbrancers are protected by the rule of lis pendens in G.S. 50-20(h).


View the Entire Newsletter -  Search

Follow Statewide_Title on Twitter       View Statewide Title's profile on LinkedIn