§ 30-3.2. Definitions.

§ 30‑3.2.  Definitions.

The following definitionsapply in this Article:

(1)        Claims. – Includesliabilities of the decedent, whether arising in contract, in tort, orotherwise, and liabilities of the decedent's estate that arise at or after thedeath of the decedent, including funeral and administrative expenses, exceptfor:

a.         A claim forequitable distribution of property pursuant to G.S. 50‑20 awardedsubsequent to the death of the decedent.

b.         Death taxes, exceptfor those death taxes attributable to Property Passing to the Surviving Spouse."Death taxes attributable to Property Passing to the SurvivingSpouse" equals the amount of decedent's death taxes as finally determined,less the amount such death taxes would have been if all Property Passing to theSurviving Spouse had qualified for the federal estate tax marital deductionpursuant to section 2056 of the Code or had qualified for a similar provisionunder the laws of another applicable taxing jurisdiction.

c.         A claim founded on apromise or agreement of the decedent, to the extent such claim is not arm'slength or is not supported by full or adequate consideration in money ormoney's worth.

d.         Expenses apportionedby the clerk of court under G.S. 30‑3.4(h).

(1a)      Code. – The InternalRevenue Code in effect at the time of the decedent's death.

(2)        Death taxes. – Anyestate, inheritance, succession, and similar taxes imposed by any taxingauthority, reduced by any applicable credits against those taxes.

(2a)      General power ofappointment. – Any power of appointment, including a power to designate thebeneficiary of a beneficiary designation, exercisable by the decedent,regardless of the decedent's capacity to exercise such power, in favor of thedecedent, the decedent's estate, the decedent's creditors, or the creditors ofthe decedent's estate, except for (i) powers limited by an "ascertainablestandard" as defined in G.S. 36C‑1‑103 and (ii) powers whichare not exercisable by the decedent except in conjunction with a person whocreated the power or has a substantial interest in the property subject to thepower and whose interest is adverse to the exercise of the power in favor ofthe decedent, the decedent's estate, the decedent's creditors, or the creditorsof the decedent's estate. In no event shall a power held by the decedent asattorney‑in‑fact under a power of attorney be considered a generalpower of appointment.

(2b)      Lineal descendant. – Definedin G.S. 29‑2.

(2c)      Net Property Passingto Surviving Spouse. – The Property Passing to Surviving Spouse reduced by (i)death taxes attributable to property passing to surviving spouse, and (ii)claims payable out of, charged against or otherwise properly allocated toProperty Passing to Surviving Spouse.

(3)        Nonadverse trustee.– Any of the following:

a.         Any person who doesnot possess a substantial beneficial interest in the trust that would beadversely affected by the exercise or nonexercise of the power that theindividual trustee possesses respecting the trust;

b.         Any person subjectto a power of removal by the surviving spouse with or without cause; or

c.         Any companyauthorized to engage in trust business under the laws of this State, or thatotherwise meets the requirements to engage in trust business under the laws ofthis State.

(3a)      Nonspousal assets. – Allproperty included in total assets other than the property included in PropertyPassing to Surviving Spouse.

(3b)      Presently exercisablegeneral power of appointment. – A general power of appointment which isexercisable at the time in question. A testamentary general power ofappointment is not presently exercisable.

(3c)      Property Passing toSurviving Spouse. – The sum of the values, as valued pursuant to G.S. 30‑3.3A,of the following:

a.         Property (i)devised, outright or in trust, by the decedent to the surviving spouse or (ii)that passes, outright or in trust, to the surviving spouse by intestacy,beneficiary designation, the exercise or failure to exercise the decedent'stestamentary general power of appointment or the decedent's testamentary limitedpower of appointment, operation of law, or otherwise by reason of thedecedent's death, excluding any benefits under the federal social securitysystem.

b.         Any year's allowanceawarded to the surviving spouse.

c.         Property renouncedby the surviving spouse.

d.         The survivingspouse's interest in any life insurance proceeds on the life of the decedent.

e.         Any interest inproperty, outright or in trust, transferred from the decedent to the survivingspouse during the lifetime of the decedent for which the surviving spouse signsa statement acknowledging such a gift. For purposes of this sub‑subdivision,any gift to the surviving spouse by the decedent of the decedent's interest inany property held by the decedent and the surviving spouse as tenants by theentirety or as joint tenants with right of survivorship shall be deemed to be agift of one‑half of the entire interest in property so held by thedecedent and the surviving spouse.

f.          Property awarded tothe surviving spouse, subsequent to the death of the decedent, pursuant to anequitable distribution claim under G.S. 50‑20.

g.         Property held in aspousal trust described in G.S. 30‑3.3A(e)(1).

Ifproperty falls under more than one sub‑subdivision of this subdivision,then the property shall be included only once, but under the sub‑subdivisionyielding the greatest value of the property.

(3d)      Responsible person. –A person or entity other than the surviving spouse that received, held, orcontrolled property constituting nonspousal assets on the date used todetermine the value of the property. The personal representative is theresponsible person for nonspousal assets that pass under the decedent's will orby intestate succession.

(3e)      Responsible person'snonspousal assets. – The nonspousal assets received, held, or controlled by aresponsible person.

(3f)       Total assets. – Thesum of the values, as determined pursuant to G.S. 30‑3.3A, of thefollowing:

a.         The decedent'sproperty that would pass by intestate succession if the decedent died without awill, other than wrongful death proceeds;

b.         Property over whichthe decedent, immediately before death, held a presently exercisable generalpower of appointment, except for (i) property held jointly with right ofsurvivorship, which is includable in total assets only to the extent providedin sub‑subdivision c. of this subdivision and (ii) life insurance, whichis includable in Total Assets only to the extent provided in sub‑subdivisiond. of this subdivision. Includes, without limitation:

1.         Property held in a trustthat the decedent could revoke.

2.         Property held in atrust to the extent that the decedent had an unrestricted power to withdraw theproperty.

3.         Property held in adepository account owned by the decedent in a financial institution payable ortransferable at decedent's death to a beneficiary designated by the decedent.

4.         Securities owned bythe decedent in an account or in certificated form that are payable ortransferable at decedent's death to a beneficiary designated by the decedent.

c.         Property held astenants by the entirety or jointly with right of survivorship as follows:

1.         One‑half ofany property held by the decedent and the surviving spouse as tenants by theentirety or as joint tenants with right of survivorship is included, withoutregard to who contributed the property.

2.         Property held by thedecedent and one or more other persons other than the surviving spouse as jointtenants with right of survivorship is included to the following extent:

I.          All propertyattributable to the decedent's contribution.

II.         The decedent's prorata share of property not attributable to the decedent's contribution, exceptto the extent of property attributable to contributions by a surviving jointtenant.

Thedecedent is presumed to have contributed the jointly owned property unlesscontribution by another is proven by clear and convincing evidence.

d.         Benefits payable byreason of the decedent's death under any policy, plan, contract, or otherarrangement, either owned by the decedent or over which the decedent had ageneral power of appointment or had the power to designate the surviving spouseas beneficiary, including, without limitation:

1.         Insurance on thelife of the decedent.

2.         Accidental deathbenefits.

3.         Annuities.

4.         Employee benefits orsimilar arrangements.

5.         Individualretirement accounts.

6.         Pension or profitsharing plans.

7.         Deferredcompensation.

8.         Any private orgovernmental retirement plan.

e.         Property irrevocablytransferred by the decedent to the extent the decedent retained the possessionor enjoyment of, or the right to income from, the property for life or for anyperiod not ascertainable without reference to the decedent's death or for anyperiod that does not in fact end before the decedent's death, except:

1.         Property transferredfor full and adequate consideration.

2.         Transfers to thatthe surviving spouse consented in writing by signing a deed, an income or gifttax return that reports the gift, or other writing.

3.         Transfers thatbecame irrevocable before the decedent's marriage to the surviving spouse.

Theproperty included in total assets is that fraction of the transferred propertyto which the decedent retained the right.

f.          Propertytransferred by the decedent to the extent the decedent created a power over theproperty or the income from the property, which, immediately prior to death,could be exercised by the decedent in conjunction with any other person, orwhich could be exercised by a person who does not have a substantial interestthat would be adversely affected by the exercise or nonexercise of the power,for the benefit of the decedent, the decedent's estate, the decedent'screditors, or the creditors of the decedent's estate, except:

1.         Property transferredfor full and adequate consideration.

2.         Transfers to which thesurviving spouse consented in writing by signing a deed, an income or gift taxreturn that reports the gift, or other writing.

3.         Transfers whichbecame irrevocable before the decedent's marriage to the surviving spouse.

Theproperty included in total assets with respect to a power over property is thatfraction of the property to which the power related.

g.         Property transferredby the decedent to persons other than the surviving spouse if such transfer wasmade both during the one‑year period immediately preceding the decedent'sdeath and during the decedent's marriage to the surviving spouse, except:

1.         Property transferredfor full and adequate consideration.

2.         Transfers to whichthe surviving spouse consented in writing by signing a deed, an income or gifttax return that reports such gift, or other writing.

3.         That part of anyproperty transferred to any one transferee that qualified for exclusion fromgift tax under section 2503 of the Code.

Forpurposes of this sub‑subdivision, the termination of a right or interestin, or power over, property that would have been included in the total assetsunder sub‑subdivisions b., e., or f. of this subdivision if the right,interest, or power had not terminated until the decedent's death shall bedeemed to be a transfer of such property. Termination occurs when, with respectto a right or interest in property, the decedent transfers or relinquishes theright or interest; with respect to a power over property, the power terminatesby exercise or release, but not by lapse or default.

Ifproperty falls under more than one sub‑subdivision of this subdivision,then the property shall be included only once, but under the sub‑subdivisionyielding the greatest value of the property.

(4)        Total Net Assets. – Thetotal assets reduced by year's allowances to persons other than the survivingspouse and claims.  (2000‑140,s. 92; 2000‑178, s. 2; 2001‑364, s. 4; 2001‑487, s. 16; 2003‑296,s. 2; 2009‑368, s. 1.)