A BILL TO BE ENTITLED
AN ACT to amend the trust administration act.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 36A‑23.1(a) reads as rewritten:
"(a)	The clerks of superior court of this State have original jurisdiction over all proceedings initiated by interested persons concerning the internal affairs of trusts except proceedings  governed by Article 11A of this Chapter. Except as provided in subdivision (3) of this subsection, the clerk's jurisdiction is exclusive. Proceedings that may be maintained under this subsection are those concerning the administration and distribution of trusts, the declaration of rights, and the determination of other matters involving trustees and trust beneficiaries, to the extent that those matters are not otherwise provided for in the governing instrument. These include proceedings:
(1)	To appoint or remove a trustee;
(1a)	To permit a trustee to resign or renounce; however, no trustee shall be required to initiate a proceeding to resign or renounce as trustee where a successor trustee named in the governing instrument or in accordance with a procedure provided in the governing instrument is willing to serve, unless the trustee is required to account to the clerk;
(2)	To review trustees' fees pursuant to  Article 5 of Chapter 32 of the General Statutes and review and settle interim or final accounts; and
(3)	To ascertain beneficiaries, to determine any question arising in the administration or distribution of any trust, including questions of construction of trust instruments, and to determine the existence or nonexistence of trusts created other than by will and the existence or nonexistence of any immunity, power, privilege, duty, or right. The clerk, on the clerk's own motion, may determine that a proceeding to determine an issue listed in this subdivision shall be originally heard by a superior court judge."
SECTION 2.  G.S. 36A‑24.1(b) reads as rewritten:
"(b)	If the trustee is not required to account to the clerk, then unless the terms of the governing instrument provide otherwise, venue for proceedings under G.S. 36A‑23.1 involving trusts  is:
(1)	In the case of an inter vivos trust, in any county of this State in which the trust has its principal place of administration or where any beneficiary  resides; or
(2)	In the case of a testamentary trust, in any county of this State in which the trust has its principal place of administration, where any beneficiary resides, or in which the testator's estate was administered."
SECTION 3.  G.S. 36A‑26.1 reads as rewritten:
"§ 36A‑26.1.  Trust proceedings; necessary parties.
Proceedings under G.S. 36A‑23.1 are initiated by filing a petition or complaint in the office of the clerk of superior court. Upon the filing of the petition, the clerk shall docket the cause as an estate matter. All trustees and interested persons not joined as petitioners shall be joined as respondents. The clerk shall issue the summons for the respondents. The clerk may order  that additional persons be joined as respondents and shall issue the summons for such additional persons.  The summons shall notify the respondents to appear and answer the petition within 10 days after its service upon the respondents. The summons shall comply with the requirements set forth in G.S. 1-394 for a special proceeding summons except that the clerk shall indicate on the summons by appropriate words that the summons is issued in an estate matter and not in a special proceeding or in a civil action. The clerk shall set the matter for hearing after the period for respondents to answer the petition has expired and shall provide notice of such hearing to respondents. At the hearing, petitioners and respondents shall have the right to offer evidence for and against granting the petition, and the clerk shall decide and determine the matter as provided  in G.S. 1-301.3. An order entered by the clerk is valid as to all persons to whom a summons is issued."
SECTION 4.  G.S. 36A‑29 reads as rewritten:
"§ 36A‑29.  Accounting to the clerk.
(a)	No trustee, including a trustee appointed by the clerk, shall be required to account to the clerk of superior court unless the governing instrument directs that the trustee shall be required to account to the clerk or unless the trustee is otherwise required by law to account to the clerk.
(b)	If the trustee is required to account to the clerk of superior court, then unless the terms of the governing instrument provide otherwise, no trustee shall be permitted to resign as trustee until a final account of the trust estate is filed with the clerk, and until the court shall be satisfied that the account is true and correct."
SECTION 5.  G.S. 36A‑31 reads as rewritten:
"§ 36A‑31.  When bond required.
A trustee  shall provide bond to secure performance of the trustee's duties if:
(1)	The terms of the governing instrument require the trustee to provide bond;
(2)	A beneficiary requests the trustee to provide bond and the clerk finds the request to be reasonable; or
(3)	The clerk finds that it is necessary for the trustee to provide bond in order to protect the interests of beneficiaries who are not able to protect themselves and whose interests otherwise are not adequately represented.
However, in no event shall bond be required of a trustee, including a trustee appointed by the clerk, if the governing instrument directs otherwise. On petition of the trustee or other interested person, the clerk may excuse a requirement of bond, reduce the amount of the bond, release the surety, or permit the substitution of another bond with the same or different sureties.  If bond is required, it shall be in a sum double the value of the personal property to come into the trustee's hands when bond is executed by a personal surety, and in an amount not less than one and one‑fourth times the value of all personal property of the trust estate when the bond is secured by a suretyship bond executed by a corporate surety company authorized by the Commissioner of Insurance to do business in this State, provided that the clerk of superior court, when the value of the personal property exceeds one hundred thousand dollars ($100,000), may accept bond in an amount equal to the value of the personal property plus ten percent (10%) thereof, conditioned upon the faithful performance of the trustee's duties and for the payment to the persons entitled to receive all moneys, assets, or other things of value which may come into the trustee's hands. All bonds executed under the provisions of this Article shall be filed with the clerk."
SECTION 6.  G.S. 36A‑32 reads as rewritten:
"§ 36A‑32.  Rights and duties devolve on successor.
A successor trustee, including a successor trustee appointed by the clerk, shall succeed to all the rights, powers, and privileges, and shall be subject to all the duties, liabilities, and responsibilities that were imposed upon the original trustee unless a contrary intent appears from the governing  instrument or unless the order appointing the successor trustee provides otherwise."
SECTION 7.  This act becomes effective January 1, 2004, and applies to all trusts created before or after that date.