Short Answer

Yes. In North Carolina, a family member may serve as trustee if the trust names them. If the trust will hold a house for a minor, the trustee must manage the property prudently, avoid self-dealing, keep good records, and provide required beneficiary information. No court appointment is needed, and a bond is usually not required unless the trust or the Clerk of Superior Court requires it.

Understanding the Problem

You want to know if, in North Carolina, you can serve as trustee of a trust that will hold your grandparent’s North Carolina house for your child until age 21. The question focuses on your eligibility to serve, what duties apply, and what steps are needed when a trust holds only one piece of real estate.

Apply the Law

North Carolina law generally allows an individual, including a relative of the beneficiary, to serve as trustee if named in the trust. No court appointment is required for a standard living trust. When a trust holds real property, title should be deeded into the name of the trustee in trust and recorded with the county Register of Deeds. Trustees must act loyally and prudently, keep trust assets separate, provide information to qualified beneficiaries at reasonable intervals, and use the broad powers the law provides only in the beneficiaries’ interests. The Clerk of Superior Court is the forum for bond issues, fee reviews, and trustee removal; a bond is typically required only if the trust says so or the Clerk finds one necessary. If a trustee later resigns, at least 30 days’ written notice to required parties applies.

Key Requirements

• Eligible trustee: An individual named in the trust may serve; no court appointment is required for a private living trust.
• Title and recording: Deed the house into the trust (trustee title) and record it with the county Register of Deeds; keep it titled and insured as trust property.
• Duty of loyalty: Administer solely for the child’s benefit; avoid self-dealing (for example, don’t live in the house or rent it to relatives below fair terms).
• Prudent administration: Maintain, insure, and manage the property with reasonable care; consider diversification unless the trust authorizes holding a concentrated asset like a single home.
• Inform and report: Provide reasonable information and periodic reports to qualified beneficiaries (or their representatives) and keep detailed records.
• Bond and court oversight: Bond is not automatic; it applies only if the trust requires it, a beneficiary reasonably requests and the Clerk orders it, or the court finds it necessary.

What the Statutes Say

• North Carolina Gen. Stat. § 36C-7-702 (Trustee’s bond) – Bond only if required by the trust or ordered by the court.
• North Carolina Gen. Stat. § 36C-8-802 (Duty of loyalty) – Trustee must act solely in the beneficiaries’ interests; avoid conflicts.
• North Carolina Gen. Stat. § 36C-8-813 (Duty to inform and report) – Provide information and reports at reasonable intervals.
• North Carolina Gen. Stat. § 36C-8-816 (Specific powers of trustee) – Lists powers to manage, insure, lease, and sell trust property, subject to fiduciary duties.

Analysis

Apply the Rule to the Facts: Here, your grandparent can deed the North Carolina house into a living trust for your child, naming you as trustee until age 21. You may serve. You must record the deed with the Register of Deeds, keep the house insured and maintained, keep records separate from your own, and provide reasonable beneficiary reporting (with a parent or representative receiving notices for a minor). Bond is unlikely unless the trust requires it or the Clerk orders it. Avoid any personal benefit from the house without clear trust authority and fair terms.

Process & Timing

1. Who files: The grandparent (settlor) and trustee. Where: County Register of Deeds in North Carolina where the property sits. What: Signed trust agreement; recorded deed titling the house to “You, as Trustee of the [Trust Name] dated [date].” When: Record the deed promptly after the trust is signed to fund the trust.
2. Trustee accepts duties, opens a dedicated account for property expenses if needed, updates insurance to reflect the trust/trustee, and begins routine reporting to qualified beneficiaries (or their representatives). Timing varies by county and carrier; expect deed recording confirmation within days to a couple of weeks.
3. When the child turns 21 (per the trust), distribute the house as directed by executing and recording a trustee’s deed to the beneficiary. Keep final records and provide a closing report.

Exceptions & Pitfalls

• Self-dealing risk: Don’t live in, use, or rent the house to relatives on below-market terms unless the trust clearly permits it and the terms are fair.
• Insurance/title gaps: After funding, promptly update insurance and ensure the deed shows trustee capacity; keep the asset titled and accounted for as trust property.
• Bond surprises: A beneficiary can ask the Clerk of Superior Court to require a bond; be prepared to show proper administration.
• Concentration risk: If the trust lacks a “retention” clause, consider whether holding a single house unduly concentrates risk; document your prudence analysis.
• Notice/reporting lapses: Even if no court accounting is required, you must provide reasonable information to qualified beneficiaries (or their representatives) and keep detailed records.

Talk to a Estate Planning Attorney

If you’re dealing with a trust to hold a family home for a minor, 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.