§ 41-23. Perpetuities and suspension of power of alienation for trusts. - North Carolina Statutes

§ 41‑23.  Perpetuitiesand suspension of power of alienation for trusts.

(a)        A trust is void ifit suspends the power of alienation of trust property, as that term is definedin G.S. 36C‑1‑103, for longer than the permissible period. Thepermissible period is no later than 21 years after the death of an individualthen alive or lives then in being plus a period of 21 years.

(b)        If the settlor of arevocable trust, as those terms are defined in G.S. 36C‑1‑103, hasan unlimited power to revoke or amend the trust, the permissible period undersubsection (a) of this section is computed from the termination of that power.

(c)        If a trust iscreated by exercise of a power of appointment, the permissible period undersubsection (a) of this section is computed from the time the power is exercisedif the power is a general power even if the power is only exercisable as atestamentary power. In the case of other powers, the permissible period iscomputed from the time the power is created, but facts at the time the power isexercised shall be considered in determining whether the power of alienation issuspended beyond a life or lives in being at the time of the creation of thepower plus 21 years.

(d)        The power ofalienation is suspended only when there are no persons in being who, alone orin combination with others, can convey an absolute fee in possession of land,or full ownership of personal property.

(e)        Notwithstandingsubsection (a) of this section, there is no suspension of the power ofalienability by a trust or by equitable interests under a trust if the trusteehas the power to sell, either expressed or implied, or if there exists anunlimited power to terminate the trust in one or more persons in being.

(f)         This section doesnot apply to a transfer in trust (i) for charitable purposes, as defined inG.S. 36C‑4‑405; (ii) to a literary or charitable organization;(iii) to a veterans' memorial organization; (iv) to a cemetery corporation,society, or association; or (v) as part of a pension, retirement, insurance,savings, stock bonus, profit sharing, death, disability, or similar planestablished by an employer for the benefit of some or all of its employees forthe purpose of accumulating and distributing to such employees the earnings orthe principal, or both earnings and principal, of the trust.

(g)        This section doesnot apply to a future interest other than a future interest in trust and, otherthan as set forth in this section, this section does not modify the common lawof the State regarding the power of alienation in this State.

(h)        The provisions ofG.S. 41‑15 and the common law rule against perpetuities do not apply totrusts created or administered in this State. (2007‑390, s. 1.)