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Moore v. Jones
Citations: 261 S.E.2d 289; 44 N.C. App. 578; 1980 N.C. App. LEXIS 2503Docket: 7811SC227
Court: Court of Appeals of North Carolina; January 15, 1980; North Carolina; State Appellate Court
A valid trust can be established even if the settlor retains a life estate and the authority to revoke or modify the trust, without invalidating it as a testamentary disposition when the trust instrument lacks the formalities required for a will. In this case, a written trust agreement was signed and acknowledged by both the settlor and trustee, clearly expressing the settlor's intent to create a trust, which included identifiable assets (stocks, bonds, and cash) placed under the trustee's control. The trustee's duties and the beneficiaries' interests were explicitly defined, fulfilling the requirements for a valid trust under North Carolina law. The court confirmed the trial court's determination that the trust was valid. Additionally, the matter of the plaintiff's rights as a surviving spouse under G.S. Ch. 30 was addressed. According to G.S. 30-1, a surviving spouse can dissent from a deceased spouse's will if the total value of the provisions for the spouse, combined with any property received outside the will, is less than half of the deceased's net estate, provided there are no surviving children or parents. If this right to dissent is established, G.S. 30-3(a) stipulates that the surviving spouse is entitled to half of the deceased's net estate, calculated before federal estate taxes are applied. The definition of 'net estate' under G.S. 29-2(5) excludes family allowances, administrative costs, and lawful claims against the estate. The trial court's conclusion that certain statutes reflect the public policy of the State is upheld. The core issue on appeal concerns whether that public policy or an inter vivos trust established by the plaintiff's husband should take precedence. Specifically, the points of contention are whether the trust assets, over which the husband retained significant control until his death, should be included in his estate for the purposes of determining the plaintiff's dissent rights under G.S. 30-1 and calculating her estate share under G.S. 30-3(a) if the dissent is validated. The North Carolina Supreme Court has not addressed this specific issue, though it has arisen in various forms in other jurisdictions, indicating a complex interplay between protecting a surviving spouse from disinheritance and the right to freely transfer property during life. The ruling emphasizes that the public policy aimed at safeguarding surviving spouses should prevail over the trust's provisions that limit their statutory rights. The court affirms the trial court's judgment that the trust is ineffective to the extent that it impairs the plaintiff's rights as a surviving spouse, while upholding its validity in all other respects to honor the settlor's intentions. The decision does not assert any fraudulent intent by the husband in establishing the trust, recognizing instead that he maintained extensive rights over the assets until his death. The trial court's finding that no hearing on the plaintiff's dissent has occurred is noted, with the understanding that the trust assets must be considered part of the estate when her rights are ultimately determined. The judgment is affirmed.