GENERAL ASSEMBLY OF NORTH CAROLINA
1989 SESSION

CHAPTER 473
HOUSE BILL 711

AN ACT TO MAKE VARIOUS AMENDMENTS TO THE LAW REGARDING INCOMPETENCY AND GUARDIANSHIP AND RELATED MATTERS.

The General Assembly of North Carolina enacts:

Section 1.  G.S. 35A-1224 reads as rewritten:
"§ 35A-1224.  Criteria for appointment of guardians.
(a)	The clerk may appoint a guardian of the estate for any minor.  The clerk may appoint a guardian of the person or a general guardian only for a minor who has no natural guardian.
(b)	The clerk may appoint as guardian of the person or general guardian only an adult individual whether or not that individual is a resident of the State of North Carolina.
(c)	The clerk may appoint as guardian of the estate an adult individual whether or not that individual is a resident of the State of North Carolina or a corporation that is authorized by its charter to serve as a guardian or in similar fiduciary capacities.
(d)	If the minor's parent or parents have made a testamentary recommendation pursuant to G.S. 35A-1225 for the appointment of a guardian, the clerk shall give substantial weight to such recommendation; provided, such recommendation may not affect the rights of a surviving parent who has not willfully abandoned the minor, and the clerk shall in every instance base the appointment of a guardian or guardians on the minor's best interest.
(e)	Notwithstanding any other provision of this section, an employee of a treatment facility, as defined in G.S. 35A-1101(16), may not serve as guardian for a ward who is an inpatient in or resident of the facility in which the employee works; provided, this subsection shall not apply to or affect the validity of any appointment of a guardian that occurred before October 1, 1987."
Sec. 2.  G.S. 35A-1230 reads as rewritten:
"§ 35A-1230.  Bond required before receiving property.
Except as otherwise provided by G.S. 35A-1225(a), no general guardian or guardian of the estate shall be permitted to receive the ward's property until he has given sufficient surety, approved by the clerk, to account for and apply the same under the direction of the court, provided that if the guardian is a nonresident of this State and the value of the property received exceeds one thousand dollars ($1,000) the surety shall be a bond under G.S. 35A-1231(a) executed by a duly authorized surety company, or secured by cash in an amount equal to the amount of the bond or by a mortgage executed under Chapter 109 of the General Statutes on real estate located in the county, the value of which, excluding all prior liens and encumbrances, shall be at least one and one-fourth times the amount of the bond; and further provided that the nonresident shall appoint a resident agent to accept service of process in all actions and proceedings with respect to the guardianship.  The clerk shall not require a guardian of the person who is a resident of North Carolina to post a bond; the clerk may require a nonresident guardian of the person to post a bond or other security for the faithful performance of the guardian's duties."
Sec. 3.  G.S. 35A-1251 reads as rewritten:
"§ 35A-1251.  Guardian's powers in administering incompetent ward's estate.
In the case of an incompetent ward, a general guardian or guardian of the estate has the power to perform in a reasonable and prudent manner every act that a reasonable and prudent person would perform incident to the collection, preservation, management, and use of the ward's estate to accomplish the desired result of administering the ward's estate legally and in the ward's best interest, including but not limited to the following specific powers:
(1)	To take possession, for the ward's use, of all the ward's estate, as defined in G.S. 35A-1202(5).
(2)	To receive assets due the ward from any source.
(3)	To maintain any appropriate action or proceeding to recover possession of any of the ward's property, to determine the title thereto, or to recover damages for any injury done to any of the ward's property; also, to compromise, adjust, arbitrate, sue on or defend, abandon, or otherwise deal with and settle any other claims in favor of or against the ward.
(4)	To complete performance of contracts entered into by the ward that continue as obligations of the ward or his estate, or to refuse to complete such contracts, as the guardian determines to be in the ward's best interests, taking into account any cause of action that might be maintained against the ward for failure to complete such contract.
(5)	To abandon or relinquish all rights in any property when, in the guardian's opinion, acting reasonably and in good faith, it is valueless, or is so encumbered or is otherwise in such condition that it is of no benefit or value to the ward or his estate.
(6)	To vote shares of stock or other securities in person or by general or limited proxy, and to pay sums chargeable or accruing against or on account of securities owned by the ward.
(7)	To insure the ward's assets against damage or loss, at the expense of the ward's estate.
(8)	To pay the ward's debts and obligations that were incurred prior to the date of adjudication of incompetence or appointment of a guardian when the debt or obligation was incurred for necessary living expenses or taxes; or when the debt or obligation involves a specific lien on real or personal property, if the ward has an equity in the property on which there is a specific lien; or when the guardian is convinced that payment of the debt or obligation is in the best interest of the ward or his estate.
(9)	To renew the ward's obligations for the payment of money.  The guardian's execution of any obligation for the payment of money pursuant to this subsection shall not be held or construed to be binding on the guardian personally.
(10)	To pay taxes, assessments, and other expenses incident to the collection, care, administration, and protection of the ward's estate.
(11)	To sell or exercise stock subscription or conversion rights; consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution, or liquidation of a corporation or other business enterprise.
(12)	To expend estate income on the ward's behalf and to petition the court for prior approval of expenditures from estate principal.
(13)	To pay from the ward's estate necessary expenses of administering the ward's estate.
(14)	To employ persons, including attorneys, auditors, investment advisors, appraisers, or agents to advise or assist him in the performance of his duties as guardian.
(15)	To continue any business or venture or farming operation in which the ward was engaged, where such continuation is reasonably necessary or desirable to preserve the value, including goodwill, of the ward's interest in such business.
(16)	To acquire and retain every kind of property and every kind of investment, including specifically, but without in any way limiting the generality of the foregoing, bonds, debentures, and other corporate or governmental obligations; stocks, preferred or common; real estate mortgages; shares in building and loan associations or savings and loan associations; annual premium or single premium life, endowment, or annuity contracts; and securities of any management type investment company or investment trust registered under the Federal Investment Company Act of 1940, as from time to time amended.
(17)	
a.	Without a court order to lease any of the ward's real estate for a term of not more than three years, or to sell, lease or exchange any of the ward's personal property including securities, provided that the aggregate value of all items of the ward's tangible personal property sold without court order over the duration of the estate shall not exceed one thousand five hundred dollars ($1,500).  When any item of the ward's tangible personal property has a value which when increased by the value of all other tangible personal property previously sold in the estate without a court order would exceed one thousand five hundred dollars ($1,500), a guardian may sell the item only as provided in subdivision (17)b.
b.	A guardian who is required by subdivision (17)a. to do so shall, and any other guardian who so desires may, by motion in the cause, request the court to issue him an order to lease any of the ward's real estate or to sell any item or items of the ward's personal property.  Notice of the motion and of the date, time and place of a hearing thereon shall be served, as provided in G.S. 1A-1, Rule 5, Rules of Civil Procedure, upon all parties of record and upon such other persons as the clerk may direct, and the court may issue the order after hearing and upon such conditions as the court may require; provided that:
1.	A sale, lease, or exchange under this subdivision may not be subject to Article 29A of Chapter 1 of the General Statutes unless the order so requires; and
2.	The power granted in this subdivision shall not affect the power of the guardian to petition the court for prior approval of expenditures from estate principal under subdivision (12) of this section.
(18)	To foreclose, as an incident to the collection of any bond, note or other obligation, any mortgage, deed of trust, or other lien securing such bond, note or other obligation, and to bid in the property at such foreclosure sale, or to acquire the property by deed from the mortgagor or obligor without foreclosure; and to retain the property so bid in or taken over without foreclosure.
(19)	To borrow money for such periods of time and upon such terms and conditions as to rates, maturities, renewals, and security as the guardian shall deem advisable, including the power of a corporate guardian to borrow from its own banking department, for the purpose of paying debts, taxes, and other claims against the ward, and to mortgage, pledge, or otherwise encumber such portion of the ward's estate as may be required to secure such loan or loans; provided, in respect to the borrowing of money on the security of the ward's real property, Subchapter III of this Chapter is controlling.
(20)	To execute and deliver all instruments that will accomplish or facilitate the exercise of the powers vested in the guardian."
Sec. 4.  G.S. 35A-1252 reads as rewritten:
"§ 35A-1252.  Guardian's powers in administering minor ward's estate.
In the case of a minor ward, a general guardian or guardian of the estate has the power to perform in a reasonable and prudent manner every act that a reasonable and prudent person would perform incident to the collection, preservation, management, and use of the ward's estate to accomplish the desired result of administering the ward's estate legally and in the ward's best interest, including but not limited to the following specific powers:
(1)	To take possession, for the ward's use, of all the ward's estate, as defined in G.S. 35A-1202(5).
(2)	To receive assets due the ward from any source.
(3)	To maintain any appropriate action or proceeding to obtain support to which the ward is legally entitled, to recover possession of any of the ward's property, to determine the title thereto, or to recover damages for any injury done to any of the ward's property; also, to compromise, adjust, arbitrate, sue on or defend, abandon, or otherwise deal with and settle any other claims in favor of or against the ward.
(4)	To abandon or relinquish all rights in any property when, in the guardian's opinion, acting reasonably and in good faith, it is valueless, or is so encumbered or is otherwise in such condition that it is of no benefit or value to the ward or his estate.
(5)	To vote shares of stock or other securities in person or by general or limited proxy, and to pay sums chargeable or accruing against or on account of securities owned by the ward.
(6)	To insure the ward's assets against damage or loss, at the expense of the ward's estate.
(7)	To pay taxes, assessments, and other expenses incident to the collection, care, administration, and protection of the ward's estate.
(8)	To sell or exercise stock subscription or conversion rights; consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution, or liquidation of a corporation or other business enterprise.
(9)	To expend estate income on the ward's behalf and to petition the court for prior approval of expenditures from estate principal; provided, neither the existence of the estate nor the guardian's authority to make expenditures therefrom shall be construed as affecting the legal duty that a parent or other person may have to support and provide for the ward.
(10)	To pay from the ward's estate necessary expenses of administering the ward's estate.
(11)	To employ persons, including attorneys, auditors, investment advisors, appraisers, or agents to advise or assist him in the performance of his duties as guardian.
(12)	To continue any business or venture or farming operation in which the ward was engaged, where such continuation is reasonably necessary or desirable to preserve the value, including goodwill, of the ward's interest in such business.
(13)	To acquire and retain every kind of property and every kind of investment, including specifically, but without in any way limiting the generality of the foregoing bonds, debentures, and other corporate or governmental obligations; stocks, preferred or common; real estate mortgages; shares in building and loan associations or savings and loan associations; annual premium or single premium life, endowment, or annuity contracts; and securities of any management type investment company or investment trust registered under the Federal Investment Company Act of 1940, as from time to time amended.
(14)	
a.	Without a court order to lease any of the ward's real estate for a term of not more than three years, or to sell, lease or exchange any of the ward's personal property including securities, provided that the aggregate value of all items of the ward's tangible personal property sold without court order over the duration of the estate shall not exceed one thousand five hundred dollars ($1,500).  When any item of the ward's tangible personal property has a value which when increased by the value of all other tangible personal property previously sold in the estate without a court order would exceed one thousand five hundred dollars ($1,500), a guardian may sell the item only as provided in subdivision (14)b.
b.	A guardian who is required by subdivision (14)a. to do so shall, and any other guardian who so desires may, by motion in the cause, request the court to issue him an order to lease any of the ward's real estate or to sell any item or items of the ward's personal property.  Notice of the motion and of the date, time and place of a hearing thereon shall be served, as provided in G.S. 1A-1, Rule 5, Rules of Civil Procedure, upon all parties of record and upon such other persons as the clerk may direct, and the court may issue the order after hearing and upon such conditions as the court may require; provided that:
1.	A sale, lease, or exchange under this subdivision may not be subject to Article 29A of Chapter 1 of the General Statutes unless the order so requires; and
2.	The power granted in this subdivision shall not affect the power of the guardian to petition the court for prior approval of expenditures from estate principal under subdivision (9) of this section.
(15)	To foreclose, as an incident to the collection of any bond, note or other obligation, any mortgage, deed of trust, or other lien securing such bond, note or other obligation, and to bid in the property at such foreclosure sale, or to acquire the property by deed from the mortgagor or obligor without foreclosure; and to retain the property so bid in or taken over without foreclosure.
(16)	To borrow money for such periods of time and upon such terms and conditions as to rates, maturities, renewals, and security as the guardian shall deem advisable, including the power of a corporate guardian to borrow from its own banking department, for the purpose of paying debts, taxes, and other claims against the ward, and to mortgage, pledge, or otherwise encumber such portion of the ward's estate as may be required to secure such loan or loans; provided, in respect to the borrowing of money on the security of the ward's real property, Subchapter III of this Chapter is controlling.
(17)	To execute and deliver all instruments that will accomplish or facilitate the exercise of the powers vested in the guardian."
Sec. 5.  The title of Article 14 of Chapter 35A of the General Statutes reads as rewritten:
"ARTICLE 14.
"Sale, Mortgage, Exchange or Lease of Ward's Estate."
Sec. 6.  G.S. 35A-1301 reads as rewritten:
"§ 35A-1301.  Special proceedings to sell, exchange, mortgage, or lease.
(a)	Whenever used herein, the word 'guardian' shall be construed to include general guardian, guardian of the estate, ancillary guardian, next friend, guardian ad litem, or commissioner of the court acting pursuant to this Article, but not a guardian who is guardian of the person only; and the word 'mortgage' shall be construed to include deeds of trust.
(b)	A guardian may apply to the clerk, by verified petition setting forth the facts, to sell, mortgage, exchange, or lease for a term of more than three years, any part of his ward's real estate,  and such proceeding shall be conducted as in other cases of special proceedings.  The clerk, in his discretion, may direct that the next of kin or presumptive heirs of the ward be made parties to such proceeding.  The clerk may order a sale, mortgage, exchange, or lease to be made by the guardian in such way and on such terms as may be most advantageous to the interest of the ward, upon finding by satisfactory proof that:
(1)	The ward's interest would be materially promoted by such sale, mortgage, exchange, or lease, or
(2)	The ward's personal estate has been exhausted or is insufficient for his support and the ward is likely to become chargeable on the county, or
(3)	A sale, mortgage, exchange, or lease of any part of the ward's real estate is necessary for his maintenance or for the discharge of debts unavoidably incurred for his maintenance, or
(4)	Any part of the ward's real estate is required for public purposes, or
(5)	There is a valid debt or demand against the estate of the ward; provided, when an order is entered under this subdivision, (i) it shall authorize the sale of only so much of the real estate as may be sufficient to discharge such debt or demand, and (ii) the proceeds of sale shall be considered as assets in the hands of the guardian for the benefit of creditors, in like manner as assets in the hands of a personal representative, and the same proceedings may be had against the guardian with respect to such assets as might be taken against an executor, administrator or collector in similar cases.
The order shall specify particularly the property thus to be disposed of, with the terms of leasing or sale or exchange or mortgage, and shall be entered at length on the records of the court.  The guardian may not mortgage the property of his ward for a term of years in excess of the term fixed by the court in its order.
(c)	In the case of a ward who is a minor, no sale, mortgage, exchange, or lease under this Article shall be made until approved by the superior court judge, nor shall the same be valid, nor any conveyance of the title made, unless confirmed and directed by the judge, and the proceeds of the sale, mortgage, exchange, or lease shall be exclusively applied and secured to such purposes and on such trusts as the judge shall specify.
(d)	All petitions filed under this section wherein an order is sought for the sale, mortgage, exchange, or lease of the ward's real estate shall be filed in the county in which all or any part of the real estate is situated.  
(e)	The procedure for a sale pursuant to this section shall be as provided by Article 29A of Chapter 1 of the General Statutes.
(f)	Nothing herein contained shall be construed to divest the court of the power to order private sales as heretofore ordered in proper cases.
(g)	On and after June 1, 1973, no sales of property belonging to minors or incompetent persons prior to that date by next friend, guardian ad litem, or commissioner of the court regular in all other respects shall be declared invalid nor shall any claim or defense be asserted on the grounds that said sale was not made by a duly appointed guardian as provided herein or on the grounds that said minor or incompetent person was not represented by a duly appointed guardian."
Sec. 7.  G.S. 35A-1304 is repealed.
Sec. 8.  G.S. 35A-1307 reads as rewritten:
"§ 35A-1307.  Spouse of incompetent husband or wife entitled to special proceeding for sale of real property.
Every married person whose husband or wife is adjudged incompetent and is confined in a mental hospital or other institution in this State, and who was living with the incompetent spouse at the time of commitment shall, if he or she be in needy circumstances, have the right to bring a special proceeding before the clerk to sell the real property of the incompetent spouse, or so much thereof as is deemed expedient, and have the proceeds applied for support:  Provided, that said proceeding shall be approved by the judge of the superior court holding the courts of the superior court district or set of districts as defined in G.S. 7A-41.1 where the said property is situated.  When the deed of the commissioner appointed by the court, conveying the lands belonging to the incompetent spouse is executed, probated, and registered, it conveys a good and indefeasible title to the purchaser."
Sec. 9.  G.S. 35A-1231 reads as rewritten:
"§ 35A-1231.  Terms and conditions of bond; increase on sale of realty or personal property.
(a)	Before issuing letters of appointment to a general guardian or guardian of the estate the clerk shall require the guardian to give a bond payable to the State.  The clerk shall determine the value of all the ward's personal property and the rents and profits of the ward's real estate by examining, under oath, the applicant for guardianship or any other person or persons.  The penalty in the bond shall be set as follows:
(1)	Where the bond is executed by personal sureties, the penalty must be at least double the value so determined by the clerk;
(2)	Where the bond is executed by a duly authorized surety company, the penalty may be fixed at not less than one and one-fourth times the value so determined by the clerk;
(3)	Provided, however, the clerk may accept bond in estates where the value determined by the clerk exceeds the sum of one hundred thousand dollars ($100,000), in a sum equal to one hundred and ten percent (110%) of the determined value.
The bond must be secured with two or more sufficient sureties, jointly and severally bound, and must be acknowledged before and approved by the clerk.  The bond must be conditioned on the guardian's faithfully executing the trust reposed in him as such and obeying all lawful orders of the clerk or judge relating to the guardianship of the estate committed to him.  The bond must be recorded in the office of the clerk appointing the guardian, except, if the guardianship is transferred to a different county, it must be recorded in the office of the clerk in the county where the guardianship is docketed.
(b)	If the court orders a sale of the ward's real property, or if the guardian expects or offers to sell personal property that he knows or has reason to know has a value greater than the value used in determining the amount of the bond posted, the guardian shall, before receiving the proceeds of the sale, furnish bond or increase his existing bond to cover the proceeds if real estate is sold, or to cover the increased value if personal property is sold.  The bond, or the increase in the existing bond, shall be twice the amount of the proceeds of any real property sold, or of the increased value of any personal property sold, except where the bond is executed by a duly authorized surety company, in which case the penalty of the bond need not exceed one and one-fourth times the amount of the real property sold or the increased value of the personal property sold."
Sec. 10.  G.S. 1-339.1 reads as rewritten:
"§ 1-339.1. Definitions.
(a)	A judicial sale is a sale of property made pursuant to an order of a judge or clerk in an action or proceeding in the superior or district court, including a sale pursuant to an order made in an action in court to foreclose a mortgage or deed of trust, but is not
(1)	A sale made pursuant to a power of sale
a.	Contained in a mortgage, deed of trust, or conditional sale contract, or
b.	Granted by statute with respect to a mortgage, deed of trust, or conditional sale contract, or
(2)	A resale ordered with respect to any sale described in subsection (a)(1), where such original sale was not held under a court order, or
(3)	An execution sale, or
(4)	A sale ordered in a criminal action, or
(5)	A tax foreclosure sale, or
(6)	A sale made pursuant to Article 4 of Chapter 35 of the General Statutes, relating to sales of estates held by the entireties when one or both spouses are mentally incompetent, or
(7)	A sale made in the course of liquidation of a bank pursuant to G.S. 53-20, or
(8)	A sale made in the course of liquidation of an insurance company pursuant to Article 17A of Chapter 58 of the General Statutes, or
(8a)	A lease, sale, or exchange made pursuant to G.S. 35A-1251(17) or G.S. 35A-1252(14), unless any order thereunder requires, or
(9)	Any other sale the procedure for which is specially provided by any statute other than this Article."
Sec. 11.  G.S. 35A-1101(11) reads as rewritten:
"(11)	'Interim guardian' means a guardian, appointed prior to adjudication of incompetence and for a temporary period, for a respondent who requires immediate intervention to address conditions that constitute imminent or foreseeable risk of harm to his physical well-being or to his estate."
Sec. 12.  G.S. 35A-1114 reads as rewritten:
"§ 35A-1114.  Appointment of interim guardian.
(a)	At the time of or subsequent to the filing of a petition under this Article, the petitioner may also file a verified motion with the clerk seeking the appointment of an interim guardian.
(b)	The motion shall set forth facts tending to show:
(1)	That there is reasonable cause to believe that the respondent is incompetent, and
(2)	One or both of the following:
a.	That the respondent is in a condition that constitutes or reasonably appears to constitute an imminent or foreseeable risk of harm to his physical well-being and that requires immediate intervention;
b.	That there is or reasonably appears to be an imminent or foreseeable risk of harm to the respondent's estate that requires immediate intervention in order to protect the respondent's interest, and
(3)	That the respondent needs an interim guardian to be appointed immediately to intervene on his behalf prior to the adjudication hearing.
(c)	Upon filing of the motion for appointment of an interim guardian, the clerk shall immediately set a date, time, and place for a hearing on the motion.  The motion and a notice setting the date, time, and place for the hearing shall be served promptly on the respondent and on his counsel or guardian ad litem and other persons the clerk may designate.  The hearing shall be held as soon as possible but no later than 15 days after the motion has been served on the respondent.
(d)	If at the hearing the clerk finds that there is reasonable cause to believe that the respondent is incompetent, and:
(1)	That the respondent is in a condition that constitutes or reasonably appears to constitute an imminent or foreseeable risk of harm to his physical well-being, and that there is immediate need for a guardian to provide consent or take other steps to protect the respondent, or
(2)	That there is or reasonably appears to be an imminent or foreseeable risk of harm to the respondent's estate, and that immediate intervention is required in order to protect the respondent's interest,
the clerk shall immediately enter an order appointing an interim guardian.
(e)	The clerk's order appointing an interim guardian shall include specific findings of fact to support the clerk's conclusions, and shall set forth the interim guardian's powers and duties.  Such powers and duties shall be limited and shall extend only so far and so long as necessary to meet the conditions necessitating the appointment of an interim guardian. In any event, the interim guardianship shall terminate on the earliest of the following: the date specified in the clerk's order; 45 days after entry of the clerk's order unless the clerk, for good cause shown, extends that period for up to 45 additional days; when any guardians are appointed following an adjudication of incompetence; or when the petition is dismissed by the court.  An interim guardian whose authority relates only to the person of the respondent shall not be required to post a bond.  If the interim guardian has authority related to the respondent's estate, the interim guardian shall post a bond in an amount determined by the clerk, with any conditions the clerk may impose, and shall render an account as directed by the clerk. 
(f)	When a motion for appointment of an interim guardian has been made, the petitioner may voluntarily dismiss the petition for adjudication of incompetence only prior to the hearing on the motion for appointment of an interim guardian."
Sec. 13.  G.S. 35A-1251, as rewritten by Section 3 of this act, is amended by adding a subdivision to read:
"(21)	To expend estate income for the support, maintenance, and education of the ward's minor children, spouse, and dependents, and to petition the court for prior approval of expenditures from estate principal for these purposes; provided, the clerk, in the original order appointing the guardian or a subsequent order, may require that the expenditures from estate income also be approved in advance.  In determining whether and in what amount to make or approve these expenditures, the guardian or clerk shall take into account the ward's legal obligations to his minor children, spouse, and dependents; the sufficiency of the ward's estate to meet the ward's needs; the needs and resources of the ward's minor children, spouse, and dependents; and the ward's conduct or expressed wishes, prior to becoming incompetent, in regard to the support of these persons."
Sec. 14.  G.S. 35A-1320 is repealed.
Sec. 15.  G.S. 35A-1116(a) reads as rewritten:
"(a)	Except as otherwise provided herein, costs shall be assessed as in special proceedings.  Costs, including any reasonable fees and expenses of counsel for the petitioner which the clerk, in his discretion, may allow, may be taxed against either party in the discretion of the court unless:
(1)	The clerk finds that the petitioner did not have reasonable grounds to bring the proceeding, in which case costs shall be taxed to the petitioner; or
(2)	The respondent is indigent, in which case the costs shall be waived by the clerk if not taxed against the petitioner as provided above or otherwise paid as provided in subsection (b) or (c)."
Sec. 16.  G.S. 35A-1265(a) reads as rewritten:
"(a)	If any guardian omits to account, as directed in G.S. 35A-1264, or renders an insufficient and unsatisfactory account, the clerk shall forthwith order such guardian to render a full and satisfactory account, as required by law, within 20 days after service of the order.  Upon return of the order, duly served, if the guardian fails to appear or refuses to exhibit such account, the clerk may issue an attachment against him for contempt and commit him until he exhibits such account, and may likewise remove him from office.  In all proceedings hereunder the defaulting guardian will be liable personally for the costs of the said proceedings, including the costs of service of all notices or writs incidental to, or thereby acquiring, and also including reasonable attorney fees and expenses incurred by a successor guardian or other person in bringing any such proceeding, or other proceedings deemed reasonable and necessary to discover or obtain possession of assets of the ward in the possession of the defaulting guardian or which the defaulting guardian should have discovered or which the defaulting guardian should have turned over to the successor guardian.  The amount of the costs and attorney fees and expenses of such proceeding may be deducted from any commissions which may be found due said guardian on settlement of the estate."
Sec. 17.  G.S. 115C-366.2 reads as rewritten:
"§ 115C-366.2.  Applicability to certain persons.
For the purposes of G.S. 115C-366 and 115C-366.1 for any person who is a resident of a place which is not the person's place of domicile, because: (i) of the residence of a parent, guardian, or legal custodian  who is a student, employee or faculty member, of a college or university, or a visiting scholar at the National Humanities Center; or (ii) the child is placed in or assigned to a group home, foster home, or other similar facility or institution, other than a child covered by G.S. 115C-140.1(a); or (iii) the child resides with a legal custodian who is not the child's parent or guardian, those sections shall be applied by substituting the word 'residing' for the word 'domiciled,' by substituting the word 'residence' for the word 'domicile,' and by substituting the word 'residents' for the word 'domiciliaries.'  For purposes of this section, 'legal custodian' means the person or agency that has been awarded legal custody of the child by a court.
This section shall not be construed to affect the ability of any person to acquire a new domicile."
Sec. 18.  G.S. 35A-1109 reads as rewritten:
"§ 35A-1109.  Service of notice and petition.
Copies of the petition and initial notice of hearing shall be personally served on the respondent.  Respondent's counsel or guardian ad litem shall be served pursuant to G.S. 1A-1, Rule 4, Rules of Civil Procedure.  A sheriff who serves the notice and petition shall do so without demanding his fees in advance.  The petitioner, within five days after filing the petition, shall mail or cause to be mailed, by first-class mail, copies of the notice and petition to the respondent's next of kin alleged in the petition and any other persons the clerk may designate, unless such person has accepted notice.  Proof of such mailing or acceptance shall be by affidavit or certificate of acceptance of notice filed with the clerk.  The clerk shall mail, by first-class mail, copies of subsequent notices to the next of kin alleged in the petition and to such other persons as the clerk deems appropriate."
Sec. 19.  G.S. 35A-1222 reads as rewritten:
"§ 35A-1222.  Service of application and notices.
A copy of the application and written notice of the time, date, and place set for a hearing shall be served on each parent, guardian, and legal custodian of the minor who is not an applicant, and on any other person the clerk may direct, including the minor.  Service shall be provided by G.S. 1A-1, Rule 4, Rules of Civil Procedure, unless the clerk directs otherwise.  When service is made by the sheriff, the sheriff shall make such service without demanding his fees in advance.  Parties may waive their right to notice of the hearing and the clerk may proceed to consider the application upon determining that all necessary parties are before the court and agree to have the application considered."
Sec. 20.  G.S. 35A-1237 reads as rewritten:
"§ 35A-1237.  Relief of endangered sureties.
Any surety of a guardian, who is in danger of sustaining loss by his suretyship, may file a motion in the cause before the clerk where the guardianship is docketed, setting forth the circumstances of his case and demanding relief.  The guardian shall have 10 days after service of the motion to answer the motion.  If, upon the hearing, the clerk deems the surety entitled to relief, the clerk may order the guardian to give a new bond or to indemnify the surety against apprehended loss, or may remove the guardian from his trust.  If the guardian fails to give a new bond or security to indemnify within a reasonable time when required to do so, the clerk must enter a peremptory order for his removal, and his authority as guardian shall cease."
Sec. 21.  G.S. 35A-1269 reads as rewritten:
"§ 35A-1269.  Commissions.
The clerk shall allow commissions to the guardian for his time and trouble in the management of the ward's estate, in the same manner and under the same rules and restrictions as allowances are made to executors, administrators and collectors under the provisions of G.S. 28A-23-3 and G.S. 28A-23-4."
Sec. 22.  G.S. 35A-1105 reads as rewritten:
"§ 35A-1105.  Petition before clerk.
A verified petition for the adjudication of incompetence of an adult, or of a minor who is within six months of reaching majority, may be filed with the clerk by any person, including any State or local human resources agency through its authorized representative."
Sec. 23.  G.S. 35A-1227(d) reads as rewritten:
"(d)	Inter vivos or testamentary transfers to minors may be made and administered according to the North Carolina Uniform Transfers to Minors Act, Chapter 33A of the General Statutes."
Sec. 24.  G.S. 35A-1221 reads as rewritten:
"§ 35A-1221.  Application before clerk.
Any person or corporation, including any State or local human resources agency through its authorized representative, may make application for the appointment of a guardian of the estate for any minor or for the appointment of a guardian of the person or general guardian for any minor who has no natural guardian by filing an application with the clerk.  The application shall set forth, to the extent known:
(1)	The minor's name, date of birth, address, and county of residence;
(2)	The names and addresses of the minor's parents, if living, and of other persons known to have an interest in the application for appointment of a guardian; the name and date of death of the minor's deceased parent or parents;
(3)	The applicant's name, address, county of residence, relationship if any to the minor, and interest in the proceeding;
(4)	If a guardian has been appointed for the minor or custody of the minor has been awarded, a statement of the facts relating thereto and a copy of any guardianship or custody order, if available;
(5)	A general statement of the minor's assets and liabilities with an estimate of the value of any property, including any income and receivables to which he is entitled;
(6)	A statement of the reason or reasons that the appointment of a guardian is sought; whether the applicant seeks the appointment of a guardian of the person, a guardian of the estate, or a general guardian; and whom the applicant recommends or seeks to have appointed as such guardian or guardians; and
(7)	Any other information that will assist the clerk in determining the need for a guardian or in appointing a guardian."
Sec. 25.  G.S. 35A-1211 reads as rewritten:
"§ 35A-1211.  Service of application, motions, and notices.
(a)	Application for appointment of a guardian and related motions and notices shall be served on the respondent, respondent's counsel or guardian ad litem, other parties of record, and such other persons as the clerk shall direct.
(b)	When the application for appointment of a guardian is joined with a petition for adjudication of incompetence, the application shall be served with and in the same manner as the petition for adjudication of incompetence.  When the application is filed subsequent to the petition for adjudication of incompetence, the applicant shall serve the application as provided by G.S. 1A-1, Rule 5, Rules of Civil Procedure, unless the clerk directs otherwise."
Sec. 26.  G.S. 35A-1261 reads as rewritten:
"§ 35A-1261.  Inventory or account within three months.
Every guardian, within three months after his appointment, shall file with the clerk an inventory or account, upon oath, of the estate of his ward; but the clerk may extend such time not exceeding six months, for good cause shown."
Sec. 27.  G.S. 35A-1262 reads as rewritten:
"§ 35A-1262.  Procedure to compel inventory or account.
(a)	In cases of default to file the inventory or account required by G.S. 35A-1261, the clerk must issue an order requiring the guardian to file the inventory or account within the time specified in the order, or to show cause why he should not be removed from office or held in civil contempt, or both.  If after due service of the order, the guardian does not, within the time specified in the order, file such inventory or account, or obtain further time to file the same, the clerk may remove him from office, hold him in civil contempt as provided in Article 2 of Chapter 5A, or both.
(b)	The guardian shall be personally liable for the costs of any proceeding incident to his failure to file the inventory or account required by G.S. 35A-1261.  Such costs shall be taxed against him by the clerk and may be collected by deduction from any commissions that may be found due the guardian upon final settlement of the estate."
Sec. 28.  G.S. 35A-1263 is repealed.
Sec. 29.  Article 10 of Chapter 35A of the General Statutes is amended by adding a new section to read:
"§ 35A-1263.1. Supplemental inventory.
Whenever any property not included in the original inventory report becomes known to the guardian or whenever the guardian learns that the valuation or description of any property or interest therein indicated in the original inventory is erroneous or misleading, he shall prepare and file with the clerk a supplementary inventory in the same manner as prescribed for the original inventory.  The clerk shall record the supplemental inventory with the original inventory.  A guardian who fails to file a supplementary inventory as required by this section shall be subject to the enforcement provisions of G.S. 35A-1262."
Sec. 30.  The title of Article 13 of Chapter 35A of the General Statutes reads as rewritten:
"ARTICLE 13.
"Removal or Resignation of Guardian; Successor Guardian;
Estates Without Guardians; Termination of Guardianship."
Sec. 31.  Article 13 of Chapter 35A of the General Statutes is amended by adding a new section to read:
"§ 35A-1295. Termination of guardianship.
(a)	Every guardianship shall be terminated and all powers and duties of the guardian provided in Article 9 of this Chapter shall cease when the ward:
(1)	Ceases to be a minor as defined in G.S. 35A-1202(12),
(2)	Is adjudicated to be restored to competency pursuant to the provisions of G.S. 35A-1130, or 
(3)	Dies.
(b)	Notwithstanding subsection (a), a guardian of the estate or a general guardian is responsible for all accountings required by Article 10 of this Chapter until the guardian is discharged by the clerk."
Sec. 32.  G.S. 35A-1266 reads as rewritten:
"§ 35A-1266.  Final account and discharge of guardian.
Within 60 days after a guardianship is terminated under G.S. 35A-1295, the guardian shall file a final account for the period from the end of the period of his most recent annual account to the date of that event.  If the clerk, after review of the guardian's account, approves the account, the clerk shall enter an order discharging the guardian from further liability."
Sec. 33.  This act shall become effective October 1, 1989.
In the General Assembly read three times and ratified this the 27th day of June, 1989.