Bill Text: NC H227 | 2017-2018 | Regular Session | Amended
Bill Title: Preserve Tenancy by the Entirety
Spectrum: Slight Partisan Bill (Democrat 8-4)
Status: (Introduced - Dead) 2017-04-25 - Re-ref Com On Rules, Calendar, and Operations of the House [H227 Detail]
Download: North_Carolina-2017-H227-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2017
H 2
HOUSE BILL 227
Committee Substitute Favorable 4/19/17
Short Title: Preserve Tenancy by the Entirety. |
(Public) |
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Sponsors: |
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Referred to: |
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March 2, 2017
A BILL TO BE ENTITLED
AN ACT to make conforming amendments to clarify that tenancy by the entirety is preserved in this state in light of the united states supreme court decision in obergefell v. hodges, as recommended by the general statutes commission, and to make other technical, clarifying, and other similar amendments to the laws relating to property conveyed by one spouse or between spouses.
The General Assembly of North Carolina enacts:
part i. preserve tenancy by the entirety
SECTION 1.1. G.S. 39‑13.3 reads as rewritten:
"§ 39‑13.3.
Conveyances between husband and wife.spouses.
(a) A conveyance from a husband
or wife to the other married grantor to that individual's spouse of
real property or any interest therein owned by the grantor alone vests such the
property or interest in the grantee.
(b) A conveyance of real
property, or any interest therein, by a husband or a wife to such husband
and wife married grantor to that individual and the individual's spouse vests
the same property in the husband and wife grantees as
tenants by the entirety unless a contrary intention is expressed in the
conveyance.
(c) A conveyance from a husband
or a wife to the other married individual to that individual's spouse
of real property, or any interest therein, held by such husband and wife the
spouses as tenants by the entirety dissolves such the tenancy
in the property or interest conveyed and vests such the property
or interest formerly held by the entirety in the grantee.
(d) The joinder of the spouse
of the grantor in any conveyance made by a husband or a wife married
grantor pursuant to the foregoing provisions of this section is not
necessary.
(e) Any conveyance authorized by this section is subject to the provisions of G.S. 52‑10 or 52‑10.1, except that acknowledgment by the spouse of the grantor is not necessary."
SECTION 1.2. G.S. 39‑13.6 reads as rewritten:
"§ 39‑13.6. Control of real property held in tenancy by the entirety.
(a) A husband and wife Two
individuals married to each other shall have an equal right to the control,
use, possession, rents, income, and profits of real property held by them in
tenancy by the entirety. Neither spouse may bargain, sell, lease, mortgage,
transfer, convey or in any manner encumber any property so held without the
written joinder of the other spouse. This section shall not be construed to
require the spouse's joinder where a different provision is made under
G.S. 39‑13, G.S. 39‑13.3, G.S. 39‑13.4, or
G.S. 52‑10.
(b) A Unless a
contrary intention is expressed in the conveyance, a conveyance of real
property, or any interest therein, to a husband and wife two
individuals then married to each other vests title in them as tenants by
the entirety when the conveyance is to:
(1) A named man individual
"and wife," or
(2) A named woman individual
"and husband," or
(2a) A named individual "and spouse," or
(3) Two named persons, individuals,
whether or not identified in the conveyance as being (i) husband and
wife, (ii) spouses, or (iii) married to each other, if at the time of
conveyance they are legally married;married to each other.
unless a contrary intention is
expressed in the conveyance.
(c) For income tax purposes, each spouse is considered to have received one‑half (1/2) the income or loss from property owned by the couple as tenants by the entirety."
SECTION 1.3. G.S. 39‑13.7 reads as rewritten:
"§ 39‑13.7. Tenancy by the entireties trusts in real property.
(a) Any real property held
by a husband and wife two individuals married to each other as a
tenancy by the entireties and conveyed to (i) a joint trust or (ii) in equal
shares to two separate trusts; shall no longer be held by the husband and
wife the grantors as tenants by the entirety and shall be disposed
of by the terms of the trust or trusts, but, subject to the provisions of
subsection (b) of this section, the real property shall have the same immunity
from the claims of the separate creditors of the husband and wife each
spouse as would exist if the spouses had continued to hold the property as
tenants by the entireties.
(b) The immunity from the claims of separate creditors provided by subsection (a) of this section shall apply as long as all of the following apply:
(1) The husband and wife two
individuals remain married.married to each other.
(2) The real property continues to be held in the trust or trusts as provided in subsection (a) of this section.
(3) Both husband and wife spouses
are current beneficiaries of the joint trust if the real property is
conveyed to that trust or of each separate trust if the real property is
conveyed in equal shares to their separate trusts.
(c) After the death of the
first of the husband and wife spouse to die, all property held in
trust that was immune from the claims of their separate creditors under
subsection (a) of this section immediately prior to the individual's death
shall continue to have immunity from the claims of the decedent's separate
creditors as would have existed if the husband and wife both spouses continued
to hold the property conveyed in trust as tenants by the entirety.
(d) The trustee acting under
the express provisions of a trust instrument or with the written consent of
both the husband and wife spouses may waive the immunity from the
claims of separate creditors provided under this section as to any specific
creditor or any specifically described property including all separate
creditors of a husband and wife spouse or all former tenancy by
the entirety property conveyed to the trustee.
(e) For purposes of this section:
(1) The reference to the real property conveyed to or held in the trust shall be deemed to include the proceeds arising from the involuntary conversion of the real property.
(2) The reference to a
"joint trust" means a revocable or irrevocable trust of which both the
husband and wife spouses are the settlors, and the reference to
"separate trusts" means revocable or irrevocable trusts of which the
husband one spouse is the settlor of one trust and the wife other
spouse is the settlor of the other trust.
(3) The husband and wife two
spouses are "beneficiaries" of a trust if they are distributees
or permissible distributees of the income or principal of the trust whether or
not other persons are also current or future beneficiaries of the trust."
SECTION 1.4. G.S. 41‑2 reads as rewritten:
"§ 41‑2. Survivorship in joint tenancy defined; proviso as to partnership; unequal ownership interests.
…
(b) The interests of the
grantees holding property in joint tenancy with right of survivorship shall be
deemed to be equal unless otherwise specified in the conveyance. Any joint
tenancy interest held by a husband and wife, two individuals then
married to each other, unless otherwise specified, shall be deemed to be
held by them as a single tenancy by the entirety, which shall be treated
as a single party when determining interests in the joint tenancy with right of
survivorship. Joint tenancy interests among two or more joint tenants holding
property in joint tenancy with right of survivorship are subject to the
provisions of G.S. 28A‑24‑3 upon the death of one or more of
the joint tenants.
This subsection shall apply to any conveyance of an interest in property created at any time that explicitly sought to create unequal ownership interests in a joint tenancy with right of survivorship. Distributions made prior to the enactment of this subsection that were made in equal amounts from a joint tenancy with the right of survivorship that sought to create unequal ownership shares shall remain valid and shall not be subject to modification on the basis of this subsection."
SECTION 1.5. G.S. 41‑2.5 reads as rewritten:
"§ 41‑2.5. Tenancy by the entirety in mobile homes.
(a) When a husband and
wife two individuals then married to each other become co‑owners
of a mobile home, in the absence of anything to the contrary appearing in the
instrument of title, they become tenants by the entirety with all the incidents
of an estate by the entirety in real property, including the right of
survivorship in the case of death of either.
(b) For the purpose of this section it shall be immaterial whether the property at any particular time shall be classified for any purpose as either real or personal. The provisions of subsection (a) of this section shall not limit or prohibit any other type of ownership otherwise authorized by law.
(c) For purposes of this
section "mobile home" means a portable manufactured housing unit
designed for transportation on its own chassis and placement on a temporary or
semipermanent foundation having a measurement of over 32 feet in length and
over eight feet in width. As used in this Article, section, "mobile
home" also means a double‑wide mobile home which is two or more
portable manufactured housing units designed for transportation on their own
chassis, which connect on site for placement on a temporary or semipermanent
foundation having a measurement of over 32 feet in length and over eight feet
in width.
(d) This section does not repeal or modify any provisions of the law relating to estate or inheritance taxes."
part ii. other amendments to the laws on conveyances of real property between spouses and conveyances by spouses to other parties
SECTION 2.1. G.S. 29‑30 reads as rewritten:
"§ 29‑30. Election of surviving spouse to take life interest in lieu of intestate share provided.
(a) In Except as
provided in this subsection, in lieu of the intestate share provided in
G.S. 29‑14 or G.S. 29‑21, or of the elective share
provided in G.S. 30‑3.1, the surviving spouse of an intestate or the
surviving spouse who has petitioned for an elective share shall be entitled to
take as the surviving spouse's intestate share or elective share a life estate
in one third in value of all the real estate of which the deceased spouse was
seised and possessed of an estate of inheritance at any time during coverture,
except that real estate as to which the surviving spouse:coverture. The
following exceptions apply if the surviving spouse:
(1) Has waived the surviving
spouse's rights by joining with the other spouse in a conveyance thereof, orthereof.
(1a) Has waived the right to take a life estate in lieu of an intestate or elective share by an express written waiver thereof.
(2) Has released or
quitclaimed Has waived, released, or conveyed the surviving spouse's
interest therein in accordance with G.S. 52‑10, orG.S. 52‑10.
(3) Was not required by law
to join in conveyance thereof in order to bar the elective life estate, orestate.
(3a) Has executed a written declaration permitting the deceased spouse to convey or encumber the property without the consent or joinder of the surviving spouse.
(4) Is otherwise not legally entitled to the election provided in this section.
…
(c) The election provided
for in subsection (a) shall be made by (i) the filing of a petition in
accordance with Article 2 of Chapter 28A of the General Statutes with the clerk
of the superior court of the county in which the administration of the estate
is pending, or, or (ii) if no
administration is pending, then with the clerk of the superior court of any
county in which the administration of the estate could be commenced.commenced,
together with the recording of a notice indicating the county and file number
of the clerk's filing with the register of deeds in every county where real
property to be claimed under the filing is located. The election shall be
made prior to the shorter of the following applicable periods:
…
(g) Neither the household furnishings in the dwelling house nor the life estates taken by election under this section shall be subject to the payment of debts due from the estate of the deceased spouse, except those debts secured by such property as follows:
(1) By a mortgage or deed of
trust in which the surviving spouse has waived the surviving spouse's rights by
joining with the other spouse in the making thereof; orthereof.
(2) By a purchase money mortgage
or deed of trust, trust given by the deceased spouse to secure a
loan, the proceeds of which were used to pay all or a portion of the purchase
price of the encumbered real property, regardless of whether the secured party
is the seller of the real property or a third‑party lender, or by a
conditional sales contract of personal property in which title is retained by
the vendor, made prior to or during the marriage; ormarriage.
(3) By a mortgage or deed of
trust made prior to the marriage; ormarriage.
(4) By a mortgage or deed of trust constituting a lien on the property at the time of its acquisition by the deceased spouse either before or during the marriage.
(5) By a mortgage or deed of trust on property with respect to which the elective life estate provided for in this section does not apply as provided in subsection (a) of this section.
…."
SECTION 2.2. The title of Article 2 of Chapter 39 of the General Statutes reads as rewritten:
"Article 2.
"Conveyances by
Husband and Wife.Conveyances by Married Individuals."
SECTION 2.3. G.S. 39‑7 reads as rewritten:
"§ 39‑7. Instruments affecting married person's individual's
title; joinder of spouse; exceptions.
(a) In order to waive the
a spouse's elective life estate of either husband or wife as
provided for in G.S. 29‑30, every conveyance conveyance,
waiver, release, or other instrument affecting the estate, right or title
of any married person individual in lands, tenements or
hereditaments must be executed by such husband or wife, the spouse, and
due proof or acknowledgment thereof must be made and certified as provided by
law.
(b) A married person individual
may bargain, sell, lease, mortgage, transfer and convey any of his or her
separate real estate without joinder or other waiver by his or her spouse if such
the spouse is incompetent and a guardian or trustee has been
appointed as provided by the laws of North Carolina, and if the appropriate
instrument is executed by the married person individual and the
guardian or trustee of the incompetent spouse and is probated and registered in
accordance with law, it shall convey all the estate and interest as therein
intended of the married person individual in the land conveyed,
free and exempt from the elective life estate as provided in G.S. 29‑30
and all other interests of the incompetent spouse.
(c) Subsection (a) shall not
be construed to require the spouse's joinder or other waiver of the elective
life estate of such the spouse as provided for in G.S. 29‑30
where a different provision is made or provided for in the General Statutes
including, but not limited to, G.S. 39‑13, 39‑13.3, 39‑13.4,
31A‑1(d), and 52‑10."
SECTION 2.4. G.S. 39‑8 reads as rewritten:
"§ 39‑8. Acknowledgment at different times and places; before different officers; order immaterial.
In all cases of deeds, or other
instruments executed by husband and wife two individuals married to
each other and requiring registration, the probate proof or
acknowledgment of such the instruments as to the husband one
spouse and due proof or acknowledgment of the wife other spouse may
be taken before different officers authorized by law to taken take
the probate of deeds, and at different times and places, whether either
or both of said the officials reside in this State or only
one in this State and the other in another state or country. And in taking
the probate of such the instruments executed by husband and
wife, two individuals married to each other, it is immaterial
whether the execution of the instrument was proven as to or acknowledged by the
husband one spouse before or after due proof as to or acknowledgment
of the wife.other spouse."
SECTION 2.5. G.S. 39‑9 reads as rewritten:
"§ 39‑9. Absence of wife's one spouse's acknowledgment
does not affect deed as to husband.the other spouse.
When an instrument purports to be
signed by a husband and wife two individuals married to each other, the
instrument may be ordered registered, registered if the
acknowledgment of the husband one spouse is duly taken, but no
such instrument shall be the act or deed of the wife other spouse unless
proven or acknowledged by her that individual according to
law."
SECTION 2.6. G.S. 39‑13 reads as rewritten:
"§ 39‑13. Spouse need not join in purchase‑money mortgage.
The purchaser of real estate who
does not pay the whole of the purchase money at the time when he or she takes a
deed for title may make a mortgage or deed of trust for securing the payment of
such purchase money, or such part thereof as may remain unpaid, which A mortgage or deed of trust given by the purchaser of real
property to secure a loan, the proceeds of which were used to pay all or a
portion of the purchase price of the encumbered real property, regardless of
whether the secured party is the seller of the real property or a third‑party
lender, shall be good and effectual
against his or her the purchaser's spouse as well as the
purchaser, without requiring the spouse to join in the execution of such the
mortgage or deed of trust."
SECTION 2.7. G.S. 39‑13.2 reads as rewritten:
"§ 39‑13.2. Married persons individuals under
18 made competent as to certain transactions; certain transactions validated.
(a) Any married person individual
under 18 years of age is authorized and empowered and shall have the same
privileges as are conferred upon married persons individuals 18
years of age or older to:to do any of the following:
(1) Waive, release or
renounce by deed or other written instrument any right or interest which he or
she may have in the real or personal property (tangible or intangible) property,
tangible or intangible, of the other spouse; orspouse.
(2) Jointly execute with his
or her spouse, if such the spouse is 18 years of age or older,
any note, contract of insurance, deed, deed of trust, mortgage, lien of
whatever nature or other instrument with respect to real or personal property
(tangible or intangible) property, tangible or intangible, held with
such the other spouse either as tenants by the entirety, joint
tenants, tenants in common, or in any other manner.
(b) Any transaction between
a husband and wife pursuant to this section between two individuals
married to each other shall be subject to the provisions of G.S. 52‑10
or 52‑10.1 whenever applicable.
…."
SECTION 2.8. G.S. 39‑13.4 reads as rewritten:
"§ 39‑13.4. Conveyances by husband or wife spouses
under deed of separation.separation, separation agreement, or
property settlement.
Any conveyance of real property, or
any interest therein, by the husband or wife a spouse who have
previously executed a valid and lawful deed of separation which separation,
separation agreement, or property settlement that authorizes said
husband or wife the conveying spouse to convey real property or any
interest therein without the consent and joinder of the other spouse and
which deed of separation separation, separation agreement, or
property settlement, or a memorandum of the deed of separation separation,
separation agreement, or property settlement setting forth such the
authorization is recorded in the county where the land lies, shall be valid
to pass such title as the conveying spouse may have to his or her the
grantee and shall pass such the title free and clear of all
rights in such the property and free and clear of such the
interest in property that the other spouse has, had, or might
acquire solely as a result of the marriage, including any rights arising under
G.S. 29‑30, unless an instrument in writing canceling the deed of separation
separation, separation agreement, or property settlement or
memorandum thereof and properly executed and acknowledged by said husband
and wife both spouses is recorded in the office of said the
register of deeds. deeds of that county. The instrument which
that is registered under this section to authorize the conveyance of
an interest in real property or the cancellation of the deed of separation
separation, separation agreement, or property settlement or memorandum
thereof shall comply with the provisions of G.S. 52‑10 or 52‑10.1.
All conveyances of any interest in
real property by a spouse who had previously executed a valid and lawful deed
of separation, or separation agreement, or property settlement, which
settlement that authorized the parties thereto to convey real
property or any interest therein without the consent and joinder of the other,
when said the deed of separation, separation agreement, or
property settlement, or a memorandum of the deed of separation, separation
agreement, or property settlement, setting forth such the authorization,
had been previously recorded in the county where the property is located, and
when such the conveyances were executed before October 1, 1981,
shall be valid to pass such title as the conveying spouse may have to his or
her the grantee, and shall pass such the title to him
the grantee free and clear of the rights in such the
property and free and clear of such the interest in such the
property that the other spouse has, had, or might acquire solely as
a result of the marriage, including any rights arising under G.S. 29‑30,
unless an instrument in writing canceling the deed of separation, separation
agreement, or property settlement, or memorandum thereof, properly
executed and acknowledged by said husband and wife, both spouses, is
recorded in the office of said the register of deeds. deeds
of that county. The instrument which is registered under this section to
authorize the conveyance of an interest in real property or the cancellation of
the deed of separation, separation agreement, property settlement, or
memorandum thereof shall comply with G.S. 52‑10 or 52‑10.1."
SECTION 2.9. G.S. 39‑13.5 reads as rewritten:
"§ 39‑13.5. Creation of tenancy by entirety in partition of real property.
When either a husband or a wife a
married individual owns an undivided interest in real property as a tenant
in common with some person or persons other than his or her spouse and there
occurs an actual partition of the property, a tenancy by the entirety may be
created in the husband or wife married individual who owned the
undivided interest and his or her spouse in the manner hereinafter provided:one
of the following manners:
(1) In a division by cross‑deed
or deeds, between or among the tenants in common provided that the intent of
the tenant in common to create a tenancy by the entirety with his or her the
tenant's spouse in this exchange of deeds must be clearly stated in the
granting clause of the deed or deeds to such the tenant and his
or her the tenant's spouse, and further provided that the deed or
deeds to such the tenant in common and his or her the
tenant's spouse is signed by such the tenant in common and is
acknowledged before a certifying officer in accordance with G.S. 52‑10;G.S. 52‑10.
(2) In a judicial proceeding
for partition. In such a proceeding, both spouses have the right to
become parties to the proceeding and to have their pleadings state that the
intent of the tenant in common is to create a tenancy by the entirety with his
or her the tenant's spouse. The order of partition shall provide
that the real property assigned to such the tenant and his or
her the tenant's spouse shall be owned by them as tenants by the
entirety."
SECTION 2.10. G.S. 39‑13.7, as amended by Section 1.3 of this act, is amended by adding two new subsections to read:
"(f) Notice that the real property held in trust receives immunity from the claims of separate creditors may be given in a statement in the conveyance of the tenancy by the entireties real property to the trust that the real property is held under this section and that as of the date of the conveyance, the requirements of subsection (b) of this section are met.
(g) A person entering into a transaction involving real property held in trust under this section may request confirmation from the trustee whether the requirements of this section providing immunity from the claims of separate creditors are met at the time of the transaction."
SECTION 2.11. G.S. 41‑10 reads as rewritten:
"§ 41‑10. Titles quieted.
An action may be brought by any
person against another who claims an estate or interest in real property
adverse to him the person who brought the action for the purpose
of determining such the adverse claims; and by any man or
woman individual against his or her wife or husband that
individual's spouse or alleged wife or husband spouse who
have not lived together as man and wife a married couple within
the two years preceding, and who at the death of such the plaintiff
might have or claim to have an interest in his or her the plaintiff's
estate, and a decree for the plaintiff shall debar all claims of the
defendant in the property of the plaintiff then owned or afterwards acquired:
Provided, that no such relief shall be granted against such husband or wife a
spouse or alleged wife or husband, except in case spouse, unless the
summons in said the action is personally served on such the
defendant.
If the defendant in such the
action disclaim disclaims in his the defendant's answer
any interest or estate in the property, or suffer suffers judgment
to be taken against him the defendant without answer, the
plaintiff cannot recover costs. In any case in which judgment has been or shall
will be docketed, whether such the judgment is in
favor of or against the person individual bringing such the
action, or is claimed by him, the individual, or affects real
estate claimed by him, the individual, or whether such the
judgment is in favor of or against the person individual against
whom such the action may be brought, or is claimed by him, that
individual, or affects real estate claimed by him, that
individual, the lien of said the judgment shall be such claim
of an estate or interest in real estate as is contemplated by this
section."
SECTION 2.12. G.S. 52‑10 reads as rewritten:
"§ 52‑10. Contracts between husband and wife spouses
generally; releases.
(a) Contracts between husband
and wife two individuals married to each other not inconsistent with
public policy are valid, and any persons individuals of full age
about to be married and married persons individuals may, with or
without a valuable consideration, release and quitclaim such waive,
release, or convey rights which they might respectively acquire or may have
acquired by marriage in the property of each other; and such releases the
waivers, releases, or conveyances may be pleaded in bar of any action or
proceeding for the recovery of the rights and estate so released.waived,
released, or conveyed. No contract or release contract, waiver, release,
or conveyance between husband and wife two individuals married to
each other made during their coverture shall be valid to affect or change
any part of the real estate of either spouse, or the accruing income thereof
for a longer time than three years next ensuing the making of such contract
or release, the contract, waiver, release, or conveyance, unless it
is in writing and is acknowledged by both parties before a certifying officer.
(a1) A contract between a
husband and wife two individuals married to each other made, with or
without a valuable consideration, during a period of separation to waive,
release, or establish rights and obligations to post separation support,
alimony, or spousal support is valid and not inconsistent with public policy. A
provision waiving, releasing, or establishing rights and obligations to post
separation support, alimony, or spousal support shall remain valid following a
period of reconciliation and subsequent separation, if the contract satisfies
all of the following requirements:
(1) The contract is in writing.
(2) The provision waiving the rights or obligations is clearly stated in the contract.
(3) The contract was acknowledged by both parties before a certifying officer.
A release made pursuant to this subsection may be pleaded in bar of any action or proceeding for the recovery of the rights released.
…
(c) This section shall not
apply to any judgment of the superior court or other State court of competent
jurisdiction, which, by reason of its being consented to by a husband and
wife, two individuals married to each other, or their attorneys, may
be construed to constitute a contract or release between such husband and
wife.the two spouses."
SECTION 2.13. G.S. 52‑10.1 reads as rewritten:
"§ 52‑10.1. Separation agreements.
Any married couple is hereby
authorized to execute a separation agreement not inconsistent with public
policy which shall be legal, valid, and binding in all respects; provided, that
the separation agreement must be in writing and acknowledged by both parties
before a certifying officer as defined in G.S. 52‑10(b). Such
certifying officer must not be a party to the contract. This section shall not
apply to any judgment of the superior court or other State court of competent
jurisdiction, which, by reason of its being consented to by a husband and
wife, two individuals married to each other, or their attorneys, may
be construed to constitute a separation agreement between such husband and
wife.the two spouses."
part iii. Effective date and applicability
SECTION 3.1. This act is intended to reflect rights established by federal law that became effective in this State on October 10, 2014, by application of General Synod of the United Church of Christ v. Resinger, 12 F.Supp.3d 790 (W.D. N.C., Oct. 10, 2014).
SECTION 3.2. This act is effective when it becomes law and applies to conveyances made on or after October 10, 2014.