2005 North Carolina Code - General Statutes § 30-3.3. Property passing to surviving spouse.

§ 30‑3.3.  Property passing to surviving spouse.

(a)       Property Passing to Surviving Spouse. – For purposes of this Article, "Property Passing to Surviving Spouse" means the sum of the following:

(1)       One‑half of the value of any interest in property held by the decedent and the surviving spouse as tenants by the entirety or as joint tenants with rights of survivorship;

(2)       The value of any interest in property (outright or in trust, including any interest subject to a general power of appointment held by the surviving spouse, as defined in section 2041 of the Code) devised by the decedent to the surviving spouse, or which passes to the surviving spouse by intestacy, or by beneficiary designation, or by exercise of or in default of the exercise of the decedent's testamentary general or limited power of appointment, or by operation of law or otherwise by reason of the decedent's death, excluding any benefits under the federal social security system;

(3)       Any year's allowance awarded to the surviving spouse;

(4)       The value of any property renounced by the surviving spouse;

(5)       The value of the surviving spouse's interest, outright or in trust, in any life insurance proceeds on the life of the decedent;

(6)       The value of any interest in property, outright or in trust, transferred from the decedent to the surviving spouse during the lifetime of decedent for which (i) a gift tax return is timely filed reporting such gift, or (ii) the surviving spouse signs a statement acknowledging such a gift. For purposes of this subdivision, any gift to the surviving spouse by the decedent of the decedent's interest in any property held by the decedent and the surviving spouse as tenants by the entirety or as joint tenants with right of survivorship shall be valued at one‑half of the entire value of that interest in property at the time the gift is made;

(7)       Notwithstanding any other provision of law related to valuing a partial interest in property, the entire fair market value of any property held in trust for the exclusive benefit of the surviving spouse during the surviving spouse's lifetime, if the terms of the trust meet the following requirements:

a.         During the lifetime of the surviving spouse, the trust is controlled by one or more Nonadverse Trustees;

b.         The trustee is required to distribute to or for the benefit of the surviving spouse either (i) the entire net income of the trust at least annually; or (ii) the income of the trust in such amounts and at such times as the trustee, in its discretion, determines necessary for the health, maintenance, and support of the surviving spouse;

c.         The trustee is required to distribute to or for the benefit of the surviving spouse out of the principal of the trust such amounts and at such times as the trustee, in its discretion, determines necessary for the health, maintenance, and support of the surviving spouse; and

In exercising discretion, the trustee may be authorized or required to take into consideration all other income, assets, and other means of support as are available to the surviving spouse; and

(8)       The net value of the marital estate awarded to the surviving spouse pursuant to G.S. 50‑20 subsequent to the death of the decedent.

(b)       Death Taxes. – The value of Property Passing to Surviving Spouse shall be reduced by any death taxes that are a charge against or apportioned against the surviving spouse on property interests included in Property Passing to Surviving Spouse.

(c)       No Duplication. – In case of overlapping application of the same property under more than one provision, the property shall be included only once, under the provision yielding the greatest value. (2000‑178, s. 2; 2001‑364, s. 5; 2003‑296, s. 3.)