My prior post identified two key changes to the year’s allowance resulting from Session Law 2023-120: (i) the elimination of the one-year limitation period a surviving spouse and eligible children have to apply for the allowance, and (ii) the elevation of the assignment and payment of the spousal allowance over the child’s allowance. This post will focus on specific changes applicable to the child’s year’s allowance resulting from S.L. 2023-120.

The Amount of the Child’s Year’s Allowance

The amount of the child’s year’s allowance varies depending on the date of the decedent’s death. The North Carolina General Assembly has increased the amount of the child’s year’s allowance multiple times over the years. Session Law 2023-120 does not change the amount of the spousal allowance, but it did increase the amount of the child’s allowance. For decedent’s dying on or after March 1, 2024, the amount of the child’s year’s allowance is increased from $5,000 to $10,000.

The chart below reflects the legislative changes to amount of the child’s year’s allowance historically.

Who Is Entitled to the Child’s Allowance

One significant change is to who is entitled to the child’s year’s allowance. If the decedent died before March 1, 2024, the following children are entitled to a year’s allowance:

1. Any child under 18, including an adopted child or a child with whom the surviving spouse may be pregnant at the death of the other spouse;
2. A child under 22 who is a full-time student in any educational institution;
3. A child under 21 who has been declared mentally incompetent or is totally disabled; and
4. Any other person under 18 residing with the deceased parent at the time of death and as to whom the deceased parent or the surviving parent stood in loco parentis. G.S. 30-17.

S.L. 2023-120 streamlines who is entitled to a child’s year’s allowance.  It removes the grounds based on the child’s disability, capacity, and status as a student. For decedents dying on or after March 1, 2024, the following children are entitled to a year’s allowance:

1. Every child of the decedent who is under 21 years at the time of the decedent’s death, included adopted children and children in utero; and
2. Every child under the age of 21 with whom the decedent stood in loco parentis at the time of death. S.L. 2023-120, sec. 1.2, amending G.S. 30-17(a).

As indicated in above, a child continues to be eligible to receive the allowance under the changes enacted by S.L. 2023-120 even if the decedent was not the biological or adoptive parent of the child if the decedent stood in loco parentis at the time of the decedent’s death. In loco parentis means “in the place of a parent.” In loco parentis, Black’s Law Dictionary 941 (11th ed. 2019). North Carolina appellate courts have interpreted the term in loco parentis in the context of juvenile proceedings to include someone who has assumed the status and obligations of a parent without a formal adoption. In re A.P., 165 N.C. App. 841, 845 (2004).

Also for decedents dying on or after March 1, 2024, S.L. 2023-120 deletes a provision in the prior law  which stated that an allowance was not available to a deceased father’s child born out of wedlock, unless (i) the deceased father recognized the paternity of the child by deed, will, or other paper-writing, or (ii) the deceased father died prior to or within one year after the birth of the child and was established to have been the father of the child by DNA testing. G.S. 30-17. This specific prohibition on children born out of wedlock receiving an allowance continues to apply to the estates of decedents dying before March 1, 2024.

Who May Apply for the Child’s Allowance

For the estates of decedents dying before March 1, 2024, G.S. 30-17 provides that a next friend or guardian may apply for the allowance on behalf of a child.

S.L. 2023-120 provides a more expansive, updated list of who is entitled to file a claim for a child’s year’s allowance and establishes priority among those entitled to file. It eliminates the antiquated term “next friend.” (The term has generally been replaced in modern law by the term “guardian ad litem” with the enactment of Rule 17 of the North Carolina Rules of Civil Procedure. G.S. 1A-1, Rule 17(b)(1).*) The session law also clarifies which “guardian” may file a claim for a year’s allowance, expressly stating it may be filed by a guardian of the estate or a general guardian.

For the estates of decedents dying on or after March 1, 2024, the following people are entitled to file a claim for an allowance on behalf of a child in the priority listed:

• first, the general guardian or guardian of the estate of the child, if any;
• then, a surviving parent of the child if the child resides with the surviving parent; and
• finally, the person with whom the child resides. L. 2023-120, sec. 1.2, amending G.S. 30-17(b).

If the clerk determines that no person entitled to file a claim listed above is a fit or suitable individual, the clerk, upon the clerk’s own motion, may appoint another individual to file a claim for the allowance on behalf of the child if the clerk determines that individual better represents the child’s best interests. S.L. 2023-120, sec. 1.2, amending G.S. 30-17(c).  This may occur if those entitled to file a claim for the allowance fail or refuse to apply for some reason. It also may occur if the clerk determines that the persons entitled to apply are not fit or suitable because they will mismanage the property assigned under the allowance or not use it for the child’s benefit.  As noted below, another important change resulting from S.L. 2023-120, is that the person entitled to file for the allowance is also the person entitled to receive the property assigned under the allowance on behalf of the child. S.L. 2023-120, sec. 1.2, amending G.S. 30-18. Therefore, determining whether a person is “fit and suitable” may entail more than just looking at whether they are fit and suitable to apply but also to receive the property on the child’s behalf.

Note, one significant absence in the amended statute from the list of persons entitled to apply for the child’s allowance is the child. This could be an issue in two instances.  First, children who are 18 to 20 years old are entitled to an allowance and a child may legally be an adult at the time of the decedent’s death. Second, a child may be a minor at the time of the decedent’s death but because they have a lifetime right to apply, they may file an application years later when they are no longer a minor. The revisions under S.L. 2023-120 do not expressly allow for the child to file on their own behalf in these instances when they are an adult.** There may be an argument that when the child turns 18 the child is legally emancipated and the surviving parent’s right to file on behalf of the child becomes the child’s right to file on their own behalf, but S.L. 2023-120 does not make that clear. It is especially problematic because the person entitled to file for the year’s allowance on behalf of a child is also entitled to receive the allowance. So, if the provisions in the amended G.S. Chapter 30 are interpreted as excluding the child from the list of persons entitled to file for their own allowance, then the child is also excluded from receiving the allowance, as discussed below.

Distribution of the Child’s Allowance

-Who is entitled to receive the child’s allowance. The reason who is entitled to file for a year’s allowance on behalf of a child is important is because, for decedent’s dying on or after March 1, 2024, the cash or personal property awarded under the allowance must be distributed to that person. S.L. 2023-120, sec. 1.2, amending G.S. 30-18.

This is a shift in the law. For decedents dying before March 1, 2024, the distribution of the child’s allowance depends on who the child resides with.

1. If the child resides with the surviving spouse of the deceased parent, the allowance is paid to the surviving spouse for the benefit of the child. G.S. 30-17.
2. If the child resides with their surviving parent and that parent is not the surviving spouse of the deceased parent, the allowance is paid to the surviving parent for the use and benefit of the child. G.S. 30-17.
3. If the child does not reside with a surviving spouse or a surviving parent when the allowance is paid, it must be paid to (i) the child’s general guardian or guardian of the estate, if the child has a general guardian or guardian of the estate, or (ii) if the child does not have a general guardian or guardian of the estate, the clerk, who receives and distributes the allowance for the child’s benefit. G.S. 30-17.

The chart below summarizes the requirements applicable to the distribution of the child’s year’s allowance for decedents dying before March 1, 2024.

– Duty to report. One thing that S.L. 2023-120 did not change is that there is still no specific duty imposed by G.S. Chapter 30 (governing the year’s allowance) to report on how the allowance was used for the child’s benefit after the allowance is distributed. However, if the property assigned under the allowance is distributed to a guardian of the estate or a general guardian, the guardian has a duty to account to the clerk under guardianship law. G.S. 35A-1264 (accounting requirements applicable to guardians of the estate and general guardians).  If the funds are paid to the general guardian or guardian of the estate, the clerk should also ensure the guardian’s bond is sufficient to cover the amount of any funds received.

Effective Date and More to Come

S.L. 2023-120 changed several key requirements of the child’s year’s allowance in North Carolina. This includes the amount of the allowance, which children are entitled to the allowance, and who may file a claim for, and receive the distribution of the allowance, on behalf of a child. Clerks and others should be cautious when dealing with a child’s year’s allowance to ensure the correct law is applied to the assignment.  If the decedent died before March 1, 2024, the prior law applies.  If the decedent died on or after March 1, 2024, the changes enacted by S.L. 2023-120 and discussed in this post apply. More posts are forthcoming on the changes to the year’s allowance reflected in S.L. 2023-120.  Stay tuned for another post next week.

Author’s Note: Two additional posts accompany this post and constitute a series discussing the changes to the year’s allowance resulting from S.L. 2023-120.  Those additional posts are available here and here.

* See Alan D. Woodlief, Jr., North Carolina Practice Series: North Carolina Law of Damages ch. 11 (Actions; Pleading and Practice), § 11:12 (“Minor’s claim”), n.1 (5th ed. 2004).

** Note, one solution may be for the clerk to appoint an adult child or an emancipated minor child to file for the allowance on their own behalf.  If the clerk determines that no person entitled to file a petition is fit or suitable and the child better represents the child’s own best interests, it appears that the clerk could appoint the child to apply for the year’s allowance on their own behalf under the amended G.S. 30-17(c).  This would also entitled the child to receive the property assigned under the allowance under the amended G.S. 30-18.