Short Answer

Yes. Moving to North Carolina does not invalidate a trust that was properly created under another state’s law. The trust’s governing-law clause generally continues to control, but its “principal place of administration” and which court can hear issues may change. If you want the trust administered in North Carolina or need to update terms (for example, caregiver provisions), North Carolina law provides orderly ways to transfer administration or seek a court-approved modification.

Understanding the Problem

In North Carolina estate planning, the question is: can you keep using a long-standing special needs trust that was set up under another state’s law after you’ve moved here? The concern is whether the trust remains valid, how it will distribute assets if your child dies, and whether you can name a secondary personal care assistant through the trust. One key fact: this is an existing special needs trust formed years ago under another jurisdiction’s law.

Apply the Law

Under North Carolina’s version of the Uniform Trust Code, a trust validly created elsewhere generally remains valid after you move. The instrument’s chosen governing law typically controls its terms. Separately, the trust’s “principal place of administration” (usually where the trustee keeps records or resides) determines which courts handle routine trust matters. North Carolina courts can act if the principal place of administration or venue ties point here. Distribution at a beneficiary’s death follows the trust terms; in special needs trusts, treatment differs depending on whether it is funded with the beneficiary’s assets (often requiring a Medicaid payback) or with third-party assets (typically passing to named remainder beneficiaries). Trustees may pay reasonable administrative costs and, if permitted by the trust and benefits rules, compensate caregivers. If changes are needed (e.g., adding a backup caregiver framework or clarifying remainder distributions), North Carolina law allows modification by court order or, in some cases, by trustee “decanting,” subject to safeguards.

Key Requirements

• Continuing validity: A trust valid under its original state’s law remains valid after you move; the trust’s choice-of-law clause generally still applies.
• Administration location: Courts look to the trust’s principal place of administration (often the trustee’s business/residence) to determine forum and venue.
• Jurisdiction/venue in NC: NC courts can hear internal trust matters when the trust is administered here or certain beneficiaries reside here; modification cases go to Superior Court.
• Death distributions: The trust instrument controls; first-party SNTs often must repay Medicaid before any remainder; third-party SNTs usually pass assets to named remainder beneficiaries.
• Caregiver payments: Trustees may pay reasonable, documented caregiver costs if authorized and consistent with public benefits rules; avoid conflicts and keep written agreements and logs.
• Changing terms: Administrative or dispositive changes generally require a court proceeding; some updates may be achieved via decanting; transfer of administration requires notice to beneficiaries. A small “uneconomic” trust (under statutory thresholds) may be adjusted or terminated.

What the Statutes Say

• North Carolina Gen. Stat. § 36C-1-108 (Principal place of administration) – Defines and allows transfer of a trust’s place of administration with beneficiary notice.
• North Carolina Gen. Stat. § 36C-2-203 (Jurisdiction of trust proceedings) – Sets which court handles internal trust matters, including limits for out-of-state-administered trusts.
• North Carolina Gen. Stat. § 36C-7-704 (Vacancy in trusteeship; appointment) – Provides for appointing successor or additional trustees when needed.
• North Carolina Gen. Stat. § 36C-8-817 (Distribution upon termination) – Requires prompt distribution to those entitled when a trust ends.

Analysis

Apply the Rule to the Facts: Your special needs trust, created years ago under another state’s law, remains valid after your move. If the trustee and records are still kept outside North Carolina, that state likely remains the principal place of administration; if you (or a successor trustee) now administer here, North Carolina courts can hear internal matters. What happens at your child’s death depends on the trust: a first-party SNT often repays Medicaid first; a third-party SNT usually follows its remainder clause. You cannot “appoint” a healthcare worker as a trustee, but you can add or clarify trust terms authorizing payments to a secondary personal care assistant, or have an additional trustee or special fiduciary appointed to oversee care-related payments.

Process & Timing

1. Who files: Trustee (or interested beneficiary). Where: For moving administration, Clerk of Superior Court in the proper North Carolina county if a judicial order is sought; otherwise follow statutory notice. What: Trust proceeding using the estate-trust process (service via AOC-E-150 Estate Summons for Trust Proceeding) or trustee notice for transfer under statute. When: Provide advance written notice to qualified beneficiaries before any transfer of the principal place of administration as required by law.
2. If you need new terms (e.g., backup caregiver language): Who files: Trustee/beneficiary. Where: Superior Court (judicial modification). What: Civil action to modify under the trust code (administrative or dispositive changes); attach the trust and proposed changes. When: No fixed deadline, but court calendars vary by county.
3. If you need help managing caregiving payments: Who files: Interested party. Where: Clerk of Superior Court. What: Petition to appoint an additional trustee or special fiduciary to handle care-related disbursements. When: As needed; expect notice and a hearing schedule set by the clerk.

Exceptions & Pitfalls

• Out-of-state administration: If the trust is still administered in another state, a North Carolina clerk may decline proceedings over a party’s objection unless limited exceptions apply.
• SNT type matters: First-party SNTs commonly require Medicaid payback at death; modifications cannot erase mandatory payback and must preserve benefit eligibility.
• Caregiver payments: Paying family caregivers is often allowed but must follow the trust terms and benefits rules; use a written caregiver agreement, market-rate pay, and detailed logs to avoid disqualification risks.
• Conflicts and controls: If the caregiver is related to the trustee or beneficiary, consider an independent co-trustee or special fiduciary to approve payments and avoid conflicts.
• Notice and parties: In court actions, include all necessary parties and consider representation rules for minors or unborn beneficiaries to avoid delay.

Talk to a Estate Planning Attorney

If you’re dealing with an out-of-state special needs trust after moving to North Carolina, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 919-341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.