(a) A trust is created only if:
(1) The settlor has capacity to create a trust;
(2) The settlor indicates an intention to create the trust;
(3) The trust has a definite beneficiary or is:
a. A charitable trust;
b. A trust for the care of an animal, as provided in G.S. 36C-4-408; or
c. A trust for a noncharitable purpose, as provided in G.S. 36C-4-409;
(4) The trustee has duties to perform; and
(5) The same person is not the sole trustee and sole beneficiary.
(b) A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities.
(c) A power in a trustee to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails, and the property subject to the power passes to the persons who would have taken the property had the power not been conferred. (2005-192, s. 2.)
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Last modified: March 23, 2014