§ 36C-7-703. Cotrustees. - North Carolina Statutes

§ 36C‑7‑703. Cotrustees.

(a)        Cotrustees who areunable to reach a unanimous decision may act by majority decision if more thantwo are serving. Unanimity is required when only two cotrustees are serving.

(b)        If a vacancy occursin a cotrusteeship, the remaining cotrustees may act for the trust and exerciseall trustee powers, except those powers that the remaining trustees areprohibited from exercising under the trust instrument or by law.

(c)        A cotrustee mustparticipate in the performance of a trustee's function unless the cotrustee isunavailable to perform the function because of absence, illness,disqualification under other law, or other temporary incapacity, or thecotrustee has properly delegated the performance of the function to anothertrustee.

(d)        If a cotrustee isunavailable to perform duties because of absence, illness, disqualificationunder other law, or other temporary incapacity, and prompt action is necessaryto achieve the purposes of the trust or to avoid injury to the trust property, theremaining cotrustee or a majority of the remaining cotrustees may act for thetrust.

(e)        A trustee maydelegate to a cotrustee with the consent of the cotrustee the performance ofany function other than those the settlor reasonably expected the trustees toperform jointly. The following functions are not considered to be those thatthe settlor reasonably expected the trustees to perform jointly:

(1)        Establish andmaintain bank accounts for the trust and issue checks for the trust.

(2)        Maintain inventories,accountings, and income and expense records of the trust.

(3)        Enter any safetydeposit box rented by the trust.

(4)        Employ persons asadvisors or assistants in the performance of administrative duties, includingagents, attorneys, accountants, brokers, appraisers, and custodians.

(5)        List trust propertyfor taxes and prepare and file tax returns for the trust.

(6)        Collect and givereceipts for claims and debts of the trust.

(7)        Pay debts, claims,costs of administration, and taxes of the trust.

(8)        Compromise, adjust,or otherwise settle any claim by or against the trust and release, in whole orin part, a claim belonging to the trust.

(9)        Have custody of thetrust property.

(10)      Perform any functionrelating to investment of trust assets.

The list of functionscontained in this subsection is not intended to be exclusive of others that maybe delegated to a cotrustee in accordance with this subsection.

(f)         Repealed bySession Laws 2007‑106, s. 27, effective October 1, 2007.

(g)        A trustee shallexercise reasonable care in connection with matters for which the trustee isgiven authority under the terms of a trust to:

(1)        Avoid enabling acotrustee to commit a serious breach of trust; and

(2)        Compel a cotrusteeto redress a serious breach of trust.

(h)        Notwithstandingsubsection (g) of this section, a cotrustee is not liable for the action of amajority of the other trustees if either of the following apply:

(1)        The trustee does notjoin in an action approved by a majority of the other trustees.

(2)        The dissentingtrustee joins in an action necessary to carry out the decision of the majorityof the trustees and notifies in writing the cotrustees of the dissent at orbefore joining in the action, unless the trustee had knowledge that the actiontaken involved intentional misconduct or was taken with an intention todirectly or indirectly provide an improper personal benefit to one or moretrustees approving the action.

(i)         Notwithstandingany other provision of this section to the contrary, if two or more trusteesown shares of corporate stock or other securities, their acts with respect tovoting shall have the following effect:

(1)        If only one votes,in person or by proxy, the act binds all;

(2)        If more than onevote, in person or by proxy, the act binds all; and

(3)        If more than onevote, in person or by proxy, but the vote is evenly split on any particularmatter, each faction is entitled to vote the stock or other securities inquestion proportionately. (2005‑192, s. 2; 2007‑106, ss. 27, 28,29.)