Scope Note: This outline discusses changes in North Carolina s General Statutes related to estate planning and relevant cases from 2015 to 2016.

Transcription

1 North Carolina Recent Developments for Estate Planners Statutes and Cases Rebecca L. Smitherman Craige Jenkins Liipfert & Walker, LLP Winston-Salem, North Carolina Scope Note: This outline discusses changes in North Carolina s General Statutes related to estate planning and relevant cases from 2015 to Recap of Fourth-Grade Civics The North Carolina General Assembly is a bicameral state legislature it consists of a Senate and a House of Representatives. The Senate has 50 members, and the House has 120 members. Both Senators and Representatives have two-year terms. Representatives elect a Speaker who presides over the House. The current Speaker is Tim Moore (R-Cleveland). The Lieutenant Governor presides over the Senate (Dan Forrest is the current Lieutenant Governor). The Senate also elects officers, including the President Pro Tempore. The current President Pro Tem is Phil Berger (R-Guilford/Rockingham). The President Pro Tem fills in when the Lieutenant Governor is not available, and is the second-highest official in the state Senate. The General Assembly meets for a long session starting in January of each oddnumbered year. It adjourns the long session and then reconvenes for a short session in each even-numbered year. The long session typically lasts about six months. The short session typically goes for about six weeks. Most new legislation is considered in the long session. In the short session, the General Assembly typically considers matters that were introduced and approved by one of the houses, but which were not reached by the other. I. Living Probate a. Before the living probate statute, 28A-2B-1, was added, a will s validity could only be determined after the testator s death. b. The living probate statute sets out a procedure allowing a petitioner to petition the court for an order confirming the validity of his or her will. i. The testator is the only person who can file the petition. ii. The petitioner asks the clerk (in a petition filed under Article 2 of Chapter 28A) to find that the will is valid. The petition must state: 1

2 1. The petitioner s county of residence 2. The will was prepared and executed in accordance with NC law and the petitioner had testamentary intent at the time the will was executed. 3. The petitioner had testamentary capacity 4. The petitioner was free from undue influence and duress, and the petitioner exercised free will in making the will. 5. The identity of all persons interested in the proceeding (use the caveat definition of interested person) iii. The clerk schedules a hearing. An interested party may object to the living probate in writing or at the hearing. If there is an objection, the matter is transferred to Superior Court and is handled like a caveat. If there is no objection, and the clerk is satisfied that the statements in the petition are correct, the clerk will enter an order finding that the will or codicil is valid. iv. The clerk s order that a will is valid under the Living Probate statute bars all of the parties who received notice from filing a caveat. 1. There is one exception - if a person can show by clear and convincing evidence that the testator was subject to duress and coercion to such a degree that the testator could not disclose it at the hearing, then a party may proceed with a caveat. 2. Intended to be a limited exception for egregious circumstances. v. The petitioner may request that the order state that the will or codicil may not be revoked or changed without a subsequent proceeding, or the petitioner may choose not to request this and retain the right to change the will without a proceeding. vi. The petitioner may move to seal the contents of the file. Once the testator dies, the file may be unsealed by any interested person for purposes of probating the will and administering the estate. II. Digital Assets - RUFADAA (Revised Uniform Fiduciary Access to Digital Assets Act) Senate Bill 805, introduced on May 4,

3 a. Terminology i. Difference between content of electronic communications and other digital assets. ii. Custodian iii. User b. Executor s Access i. Can access content of electronic communications only if the decedent consented to the disclosure. The custodian of the communications may require a court order specifically identifying the account and finding that there was consent. ii. Can access other digital assets unless the decedent opted out by stating otherwise or by clicking a box. The custodian of the assets may require a court order identifying the account and finding that access is reasonably necessary for estate administration. c. Guardian s Access i. Can access content of electronic communications only with the express consent of the ward, but the custodian/provider may suspend or terminate the account for good cause if requested by the guardian. ii. Can access other digital assets if authorized by the court. The custodian may require specific identification of the account and evidence linking the account to the ward. d. Attorney-in-fact Access (under power of attorney) i. Can access electronic communications if expressly authorized by the principal. The custodian may require specific identification of the account and evidence linking the account to the principal. ii. Can access other digital assets under a grant of general or specific authority. The custodian may require specific identification of the account and evidence linking the account to the principal. iii. Sample Language for Durable Power of Attorney: Digital Assets: The power to open, continue, modify, terminate, access, view, make use of, and give instructions in regards to any financial, social media, or other account or arrangement of 3

4 mine on the world wide web (also known as the internet) and/or on any other public or private network, and to access, view, and transfer any or all data owned by or concerning me in any format, including electronic or digital data, no matter where it is located, in North Carolina or another state or country. My attorney-in-fact may obtain password and/or login information, and have complete access to any electronic account maintained by me or on my behalf, including without limitation electronic mail and on-line financial accounts. e. Trustee s Access i. If the trustee is the original user, then the trustee can access the contents of electronic communications. Also permitted if access is authorized by the trust instrument. The custodian may require specific identification of the account and evidence linking the account to the trust. ii. A trustee s access to other digital assets of the trust is permitted unless prohibited by the user, the trust instrument, or a court. iii. Sample Language in Trustee Powers regarding Digital Assets: Digital Assets: My Trustee has the authority to access, modify, control, archive, transfer, and delete my digital assets. Digital assets include my sent and received s, including their contents, accounts, digital music, digital photographs, digital videos, gaming accounts, software licenses, social-network accounts, file-sharing accounts, financial accounts, domain registrations, Domain Name System (DNS) service accounts, blogs, listservs, web-hosting accounts, taxpreparation service accounts, online stores and auction sites, online accounts, and any similar digital asset that currently exists or may be developed as technology advances. My digital assets may be stored on the cloud or on my own digital devices. My Trustee may access, use, and control my digital devices in order to access, modify, control, archive, 4

5 transfer, and delete my digital assets this power is essential for access to my digital assets that are only accessible through my digital devices. Digital devices include desktops, laptops, tablets, peripherals, storage devices, mobile telephones, smartphones, and any similar hardware that currently exists or may be developed as technology advances. f. Terms of Service i. If a user uses an online tool to give directions with regard to an online account, that overrides on offline direction (like a power of attorney, will, etc.) and the boilerplate terms of service, as long as the online direction can be modified or deleted at all times. ii. Direction in a will, power of attorney, trust, or other record will prevail over boilerplate terms of service. iii. If there is no direction, the terms of service control. iv. If other terms of service do not conflict with the user s direction, they will be preserved, and the fiduciary will not have rights any greater than the rights of the user. g. Disclosure of Digital Assets i. Custodian has 3 options: 1. Allow the requestor to access the user s account just like the user does/did. 2. Allow the requestor to partially access the user s account if sufficient to perform the necessary tasks. 3. Provide the requestor with a data dump of all of the digital assets held in the account. ii. A custodian may assess a reasonable administrative charge for the cost of disclosing a user s digital assets. iii. A request for some, but not all, of a user s digital assets need not be fulfilled if segregation is unduly burdensome. Either party may petition a court for help with this issue. iv. A custodian need not disclose deleted assets. 5

6 h. Other Matters i. Account termination: If termination would not violate a fiduciary duty, a fiduciary may request that an account be terminated, rather than requesting disclosure. ii. Joint accounts. The custodian need not disclose joint accounts, if the custodian is aware of lawful access to the account by the joint owner after the receipt of the disclosure request. iii. Custodian immunity Custodian is immune from liability for an act or omission done in good faith in compliance with the act. III. North Carolina Uniform Voidable Transfer Act - new version effective October 1, 2015, Session law Substituted the word voidable for fraudulent. This change in terminology stresses that intent to defraud is not a condition to recovery under the UVTA. a. Three kinds of creditors i. Present creditor - has obtained a judgment against the debtor, or is owed a debt by the debtor prior to the transfer. ii. Known potential future creditor - client could reasonably foresee (for example, victim of a tort who has not yet obtained judgment). iii. Unknown future creditor - client could not reasonably foresee. b. Solvency i. Insolvency under the UVTA is when the sum of a debtor s debts is greater than all of the debtor s assets at a fair valuation. N.C.G.S ii. A debtor who is generally not paying debts as they come due is presumed to be insolvent. The 2015 revisions to the UVTA provide that the party against whom the presumption is directed (usually the debtor) has the burden of proving that the nonexistence of insolvency is more probable than its existence. iii. For determining whether a debtor is insolvent, the debtor s property secured by a valid lien is not considered an asset. Likewise, in determining whether a debtor is insolvent, the debts that are secured by a valid lien on property of the debtor excluded from assets are also excluded from debts for the calculation. 6

7 iv. The 2015 revisions to the UVTA clarifies that non-payment of a debt that is subject to a bona fide dispute is not a factor in the determination of insolvency. v. The 2015 revisions to the UVTA removed the more specific definition of when a partnership is insolvent that had been contained in Instead, partnerships are now subject to the general definition of insolvency. c. For present creditors, there is a bright line test. A transfer is fraudulent as to an existing creditor if the debtor made the transfer: i. without receiving a reasonably equivalent value in exchange for the transfer; and ii. the debtor was insolvent at the time of the transfer or became insolvent as a result of the transfer. N.C.G.S d. The 2015 revisions to UVTA clarify that the creditor has the burden of proving the elements of the claim that the transfer is voidable by a preponderance of the evidence. e. For future creditors (and present creditors, too), a facts and circumstances test applies: i. A transfer is voidable as to a creditor if it was made with intent to hinder, delay, or defraud any creditor of the debtor. Intent can be demonstrated by a nonexclusive list of factors set out in the statute, including whether: 1. The transfer or obligation was to an insider; 2. The client retained possession or control of the property transferred after the transfer; 3. The transfer or obligation was disclosed or concealed; 4. Before the transfer was made, the debtor had been sued or threatened with suit; 5. The transfer was of substantially all of the debtor s assets; 6. The debtor absconded; 7. The transfer was/was not a gift - was there consideration reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred? 8. The debtor removed or concealed assets; 9. The client was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred 7

8 10. The transfer occurred shortly before or shortly after a substantial debt was incurred; 11. The client transferred essential assets of the business to a lienor who transferred the assets to an insider of the client; 12. The client made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the client reasonably should have believed that the client would incur debts beyond the client s ability to pay as they became due; and 13. The client transferred the assets in the course of legitimate estate or tax planning. ii. A transfer is also voidable as to a creditor, whether the creditor s claim arose before or after the transfer, if the debtor made the transfer without receiving a reasonably equivalent value in exchange for the transfer and the debtor was engaged or was about to engage in a business or transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction or the debtor intended to incur or believed that he would incur debts beyond his ability to pay them as they became due. f. Statutes of Limitations i. UVTA has a 4-year statute of limitations. A creditor may seek to set aside a transaction for up to 4 years after it was made. N.C.G.S ii. But if a transfer was made to an insider for an antecedent debt, the statute of limitations is one year. g. Defenses i. Foreclosure sale - If the transfer is the result of a regularly conducted, noncollusive foreclosure sale, a debtor conclusively has received reasonably equivalent value. N.C.G.S ii. Lawful lease termination. N.C.G.S (e)(1). iii. Absolute defense for transfer that results from enforcement of a security interest in compliance with Article 9 of the UCC. N.C.G.S (e)(2). 8

9 iv. A transferee can raise a defense that it took in good faith. The 2015 revisions require that a transferee will qualify for the good faith only if the transferee took in good faith and gave reasonably equivalent value to the debtor. v. The defense for a subsequent or mediate transferee who takes in good faith and for value applies not only to an action on a money judgment, but also to a recovery of, or from, the transferred property or its proceeds, by levy or otherwise. h. Burdens of Proof i. Creditors have the burden of proving the elements of a voidable transaction under the UVTA. ii. Debtors have the burden of proving the elements of a defense to a voidable transaction under the UVTA. iii. The elements of a claim or defense must be proven by a preponderance of the evidence. i. Governing Law - New in UVTA A claim under the UVTA is governed by the local law of the jurisdiction where the debtor was located when the transfer was made. j. Series Organizations. The UVTA now addresses series organizations and treats each entity that is part of a series organization as a person for purposes of UVTA, regardless of how it is treated for other purposes. IV. Tenancy by the Entirety a. Conveyance of a tenancy by the entirety to a trust b. In 2013, North Carolina added a provision that allows real property held by the entireties to be conveyed to a joint trust or two separate trusts settled by the owners of the real property to retain its entireties protection from creditors. c. In 2015, the statute, N.C.G.S was rewritten to clarify that: i. The husband and wife must be married at the time of the conveyance. ii. The property can go into a joint trust or in equal shares to two separate trusts created by the husband and wife. iii. The creditor protection lasts as long as the husband and wife remain married, the real property continues to be held in the 9

10 trust(s), and the husband and wife are current beneficiaries of the joint trust or of each separate trust. iv. In practice - designate on deed of conveyance that property will retain entireties character. Include in certificate of trust whether property retains entireties character (whether the requirements of the statute are met). d. A bill has been introduced in the General Assembly to preserve tenancy by the entireties treatment of real property, both held by married persons and held in married persons trusts, in light of the Obergefell v. Hodges Supreme Court Opinion. Senate Bill 806, introduced May 4, i. The current tenancy by the entireties statutes refer to a man and wife or a woman and husband. ii. May be unconstitutional in light of Supreme Court opinion. iii. Proposed fix would allow a tenancy by the entireties to be created if the conveyance names: 1. Individual and wife 2. Individual and husband 3. Individual and spouse iv. The provision regarding entireties property held in trust would be updated with similar conforming changes. v. Statute regarding tenancy by the entireties in mobile homes would also be updated. vi. Joint tenancy statute would be updated to replace term husband and wife with two individuals then married to each other. V. Uniform Powers of Appointment Act In 2015, the General Assembly adopted the North Carolina Uniform Powers of Appointment Act, a new Chapter 31D, which addresses all aspects of a power of appointment, including creation of a power, the exercise of a power, disclaimer or release of a power, and the rights of a creditor to reach property subject to a power of appointment. a. General Power of Appointment can appoint to power holder, power holder s estate or creditors of either. Can be lifetime or testamentary, and generally triggers gift tax/estate inclusion. 10

11 b. Limited Power of Appointment power to appoint excludes power to appoint to self, estate or creditors of either. Usually does not trigger gift tax or estate inclusion (except Delaware Tax Trap) c. Article 1 Definitions i. Donor ii. Power holder iii. Permissible appointee d. Article 2 Creation, revocation and amendment of powers of appointment e. Article 3 Exercise of power of appointment. Instrument must manifest the power holder s intent to exercise the power f. Article 4 North Carolina s law of disclaimers and renunciations applies to power holders and permissible appointees. The power may be released unless prohibited by the donor. g. Article 5 of the UPOAA deals with the rights of the creditors of a power holder. i. The basic rule is that if an individual retains a general power over property that the individual owned, the individual/power holder s creditors can reach the property. Appointive property subject to a general power of appointment created by the power holder is subject to a claim of and is currently reachable by a creditor of the power holder or the power holder s estate to the extent that the power holder s property is insufficient to satisfy that claim. ii. Exception: An irrevocable exercise of the general power by the power holder in favor of someone other than the power holder or the power holder s estate eliminates the basic rule to the extent of the assets appointed. The UVTA rules are still applicable to this kind of exercise. iii. If a power of appointment is created by someone else, and is a general power of appointment, and is presently exercisable, then the creditor of the power holder can reach the appointive property, to the extent that the power holder s property is insufficient. But, if a power is subject to an ascertainable standard, it is considered a non-general power and is not reachable. 11

12 iv. A power to withdraw property from a trust is treated as a presently exercisable general power of appointment. But if a power to withdraw property is created by someone other than the power holder, creditors can only reach the property subject to the power to the extent that the power is actually exercised. v. Appointive property subject to a non-general power of appointment is not subject to claims against the power holder, but 1. If the power holder owned the property, and, reserving a nongeneral power, transferred the property in violation of the UVTA, the power holder s creditors can reach the property. 2. If the initial taker in default of the power of appointment is the power holder or the power holder s estate, a nongeneral power of appointment is treated as a general power. (In this instance, the nongeneral power is in substance a general power.) VI. Uniform Trust Code Changes a. Statute of limitations against a trustee i. Under law prior to the 2015 change to N.C.G.S. 36C (b), trustees faced very long potential periods of liability, because the statute of limitations was tolled as to beneficiaries of a trust who were under age 18 or were incompetent, even if trustee actions were disclosed to persons who represented the interests of those underage or incompetent beneficiaries. ii. The 2015 revision provides that on the day that the statute of limitations starts running with respect to a claim held by the person involving a trust, the statute of limitations starts running as to all persons the person would be entitled to represent, with or without consent to serve as trustee. iii. Effective 10/1/15 b. Default and mandatory rules governing power holders i. *Different from power holders under Uniform Powers of Appointment Act. 12

13 ii. These provisions deal with directed trustees and other directed person. iii. In general, a fiduciary cannot be excused from basic fiduciary duties, such as the duty to act in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries. But if a person is appointed as a power holder in a non-fiduciary capacity, the settlor can excuse these duties. iv. Effective 10/1/15 c. Standard of liability for directed trustee i. If a trust gives certain duties to one co-trustee and excludes another co-trustee, the excluded co-trustee is not liable for the actions taken by the empowered co-trustee. The excluded cotrustee does not have to monitor the conduct of the other trustee. ii. If a trust gives power to co-trustees but allows the decision of one or more co-trustees to control in event of a disagreement, then, unless a dissenting trustee has actual knowledge that the action being taken is a serious breach of trust, a co-trustee who dissents is not liable for the action if either the dissenting cotrustee does not join in the action or the dissenting trustee joins in the action necessary to carry out the decisions and gives notice of dissent to the other co-trustees before joining in the action. iii. This raises a question of what the dissenting co-trustee is supposed to do if they know of an act is a serious breach of trust. Notify beneficiaries? Bring a petition to remove the co-trustee? d. Decanting to SNT i. If a trustee has discretionary power to make distributions of principal and income, the trustee may exercise the discretion to put the trust property into a new trust for the benefit of one or more of the trust beneficiaries. ii. In the 2015 legislative session, the General Assembly, clarified that the second trust may have a longer duration than the original trust. iii. The General Assembly further authorized the trustee to decant into a supplemental needs trust, which is a discretionary trust 13

14 that is sensitive to a disabled beneficiary s qualification for governmental benefits. iv. The amendment to the decanting statute, N.C.G.S. 36C , also included savings language to ensure that a decanted trust does not inadvertently mess up a GST election, an election with regard to a qualified retirement plan, or other tax election. VII. Standby and Successor Guardians for Incompetent Adults a. Prior Law: G. S. 35A-1207, Allows for the appointment of a standby guardian for a minor child during parent s incapacity upon petition or by written designation. b. In 2015, the standby guardian statute, G.S. 35A-1370, was amended to include incompetent adults. c. New definition for incompetent adult is added d. Outlines procedure for appointing standby guardian: petition/hearing e. Notice must be provided f. Rule 5 service of process g. Designation of a standby guardian for incompetent adult by a writing designation (will) G.S. 35A-1374 VIII. Elective Share Statute Clarification a. G.S A(e) is rewritten b. Amends the valuation of life estates and contingent interest in property under the elective share statute to reflect the principle that the value used should be the fair market value. c. The Clerk determines that the use of the tables or rate of return is not appropriate. Table set forth in G.S and G.S IX. Tax Reform a. Corporate Income Tax Changes i. In 2013, the General Assembly lowered the corporate income tax rate from 6.9% to 6% for 2014 and to 5% for The General Assembly also provided for an automatic reduction to 4% if general fund revenues hit a target of $20.2 billion in the fiscal year and to 3% if general fund revenues hit a target 14

15 of $ billion in the fiscal year. The target was exceeded for , and the 4% rate is in effect. ii. Some federal deductions have been eliminated for computation of state net income, because they were deemed obsolete. iii. New limitation on deductions for net interest paid to affiliates - corporation may not deduct net interest paid to affiliates that exceed 30% of the taxpayer s adjusted taxable income. There are some exceptions where the affiliate is a bank and where the affiliate is in another state or another country. iv. New calculation of the Franchise Tax for corporations is based on the net worth of the corporation (had been based on capital stock previously). b. Personal Income Tax Changes i. Medical expense deduction restored. ii. Standard deduction increased to $15,500 (from $15,000) for married taxpayers filing jointly, to $12,400 (from $12,000) for heads of household, and to $7,750 (from $7,500) for single taxpayers and married taxpayers filing separately. iii. Beginning in 2017, personal income tax rate drops from 5.75% to 5.499% iv. New withholding tables starting in v. Historic preservation tax credit revived starting in 2016, and is set to cease in c. Sales Tax i. Beginning March 1, 2016, sales tax base includes repair, installation, and maintenance services. Includes motor vehicles. But there are exceptions: 1. A person not otherwise engaged in a retail trade (and who derives less than half of its revenue from retail sales) is not considered a retailer liable for sales tax. 2. A person who operates solely as a real property contractor is not considered a retailer. 3. Specific exemptions: services purchased for resale; services provided under dealer or manufacturer warranties, services performed with respect to property other than a motor vehicle that is exempt from sales tax; 15

16 services performed on utility network assets, services performed on motorsports racing team property, services performed on property subject to 1% mill machinery privilege tax, and services performed on certain jet aircraft and jet engines. ii. Sales Tax Leakage 1. Local Option Sales Tax When local jurisdictions impose a sales tax, some jurisdictions generate sales tax revenue not only from their own citizens, but also from citizens of other jurisdictions. Conversely, that means that some jurisdictions do not collect sales tax revenue from their own citizens and lose that potential revenue. One reason that LOSTs are popular with local governments is that they DO shift some tax burden to non-residents. Urban centers and regional retail centers benefit, while more rural counties fare worse. These taxes are collected by the state and then distributed to counties on either a per capita or point of delivery basis. 2. This issue was heavily debated, but the General Assembly decided to allocate certain LOST revenue to more rural counties. So, some North Carolina counties will end up being subsidized to some degree by other North Carolina counties. 3. The counties receiving the highest amount of the extra LOST revenue are Harnett (5.17%), Davidson (4.95%), and Randolph (4.27%). The counties receiving the lowest amount (as in, none) are Wake, Mecklenburg, Forsyth, and Guilford. 4. For more detailed information, please see the excellent summary provided by Smith Anderson to NCACPA: edition/ X. Case law update a. In re Taylor, 774 S.E.2d 863 (2015). i. Estate involved several contested issues 16

17 1. Beneficiary claimed reimbursement for care services provided 2. Beneficiary asked to be reimbursed for funeral expenses, but request was untimely filed ii. Estate incurred $91,340 of attorney fees to deal with probate and administration as well as litigation matters. iii. Clerk of Court (Cumberland County) approved only $26, as a valid expense of the estate. iv. Trial court reversed and ordered that full attorney fee be paid from the estate v. The question before the court of appeals was whether a clerk of court has the authority to review for reasonableness the legal fees incurred by an executor on behalf of an estate or, alternatively, whether the clerk s authority is limited to the ministerial task of simply determining whether the entries in a submitted account reflect the actual receipts and disbursements made by the executor. vi. Court of Appeals held that the clerk has authority to review attorney fees for reasonableness, determined in the discretion of the clerk. An order dealing with fees must contain findings of fact to support the Clerk s determination. b. Legalzoom.com, Inc. v. North Carolina State Bar, 11 CVS i. Consent judgment has been entered ii. Depends on a revision to North Carolina s law on what constitutes the practice of law being passed in the General Assembly iii. House Bill 436. c. Nelson v. State Employees Credit Union, 775 S.E.2d 334 (2015). i. POD accounts and Totten Trusts ii. Mr. Nelson, shortly before he died, called SECU and asked them to move an account out of his revocable trust and set it up to pay on death to one of his three children (a daughter). iii. The POD paperwork was not properly completed, but the bank paid the funds to the daughter. iv. The court found that, even though the POD paperwork was deficient, a common law Totten trust had been created. v. Mr. Nelson expressed his intent to place the funds in a tentative trust with his daughter as a beneficiary. 17

18 d. In re Estate of Pickelsimer, 776 S.E.2d 216. i. Caveat went to jury trial, and jury found that will was valid. ii. Dead Man s Statute Case iii. The Dead Man s Statute is an evidence rule that a person who receives an interest from a deceased person cannot testify as to oral statements made by that deceased person. iv. Can be overcome if the other party opens the door to it, by asking about it or permitting otherwise prohibited testimony about a decedent s oral statements. v. In this case, Mr. Pickelsimer s attorney testified about statements made to him while rendering legal services to Mr. Pickelsimer. vi. The caveators argued that this testimony opened the door to testimony by other interested persons about oral conversations with Mr. Pickelsimer. vii. The court found that the evidence offered was properly excluded and furthermore it would not have altered the jury s verdict, even if it had been admitted. e. Brittian ex re. Hildebran v. Brittian, 776 S.E.2d 867 (2015). i. Declaratory judgment action regarding the rights of the parties under will ii. There were blacked out portions of the will that was probated, and the clerk interpreted those as partial revocation. The part that was blocked out contained gifts to a granddaughter of the decedent. iii. The daughter who benefitted from disinheritance of the granddaughter filed a declaratory judgment action asking the court to construe the will. The granddaughter asserted that the daughter was objecting to a duly probated will, and that could only be done in a caveat action. iv. The trial court agreed with the granddaughter and dismissed the declaratory judgment action. The daughter appealed. v. The court of appeals reversed and stated that when the construction rather than the validity of a will is contested, a declaratory judgment is the proper action. f. Morgan-McCoart v. Machette, S.E.2d (2016). No. COA i. Two sisters were managing their mother s affairs. ii. The mother had a trust and a power of attorney. One sister was named as trustee and attorney-in-fact, but she lived in 18

19 California, and resigned in favor of the sister who lived closer to the mother. The sisters had a written agreement about the change in trustee and attorney-in-fact. The geographically closer sister was also named guardian for the mother. iii. The sister who had resigned asked for reimbursement for expenses incurred while serving as attorney-in-fact and trustee. iv. The clerk denied the California sister s request for reimbursement from the mother and the trust in the amount of $22,405.56, and allowed only $1, v. The California sued the North Carolina sister in District court, individually, as trustee, and as guardian. vi. The court of appeals held that 1. The claim against the North Carolina sister as Trustee had to be heard by the Clerk of Court. 2. The claim against the North Carolina sister individually for violating the agreement could be heard in District Court 19