§ 33B-17. Distribution on termination. - North Carolina Statutes

§33B‑17.  Distribution on termination.

(a)        Upon termination ofa custodial trust, the custodial trustee shall transfer the unexpendedcustodial trust property:

(1)        To the beneficiary,if not incapacitated or deceased;

(2)        To the guardian ofthe estate or other recipient designated by the court for an incapacitatedbeneficiary; or

(3)        Upon thebeneficiary's death, in the following order:

a.         As last directed ina writing signed by the deceased beneficiary while not incapacitated andreceived by the custodial trustee during the life of the deceased beneficiary;

b.         As designated in theinstrument creating the custodial trust; or

c.         To the estate of thedeceased beneficiary.

(b)        If, when thecustodial trust would otherwise terminate, the distributee is incapacitated,the custodial trust continues for the use and benefit of the distributee asbeneficiary until the incapacity is removed or the custodial trust is otherwiseterminated.

(c)        Death of abeneficiary does not terminate the power of the custodial trustee to dischargeobligations of the custodial trustee or beneficiary incurred before thetermination of the custodial trust.

(d)        The writingdescribed in G.S. 33B‑17(a)(3)a. or the instrument described in G.S. 33B‑17(a)(3)b.must also be signed by at least two witnesses, neither of whom is the custodialtrustee or the distributee of the custodial trust property, and be acknowledgedby the beneficiary or transferor before an individual authorized to administeroaths or take acknowledgements. Failure to comply with the witness oracknowledgement requirement shall not affect the validity of the custodialtrust during the life of the beneficiary, but shall invalidate only thedirection or designation of the distributee on termination of the custodialtrust under G.S. 33B‑17(a)(3)a. or G.S. 33B‑17(a)(3)b., and upontermination of the custodial trust the custodial trustee shall transfer theunexpended custodial trust property according to the remaining provisions ofthis section. (1995, c. 486, s. 1.)