A trust is a fiduciary relationship in which the trustee holds a property interest subject to an equitable obligation to manage or use that property for the benefit of a beneficiary. Unlike other common fiduciary relationships, a trust is not generally under continuing judicial oversight. The court may intervene in the administration of a trust to the extent its jurisdiction is invoked by a party or as provided by law. A trust may be in effect for years before an issue arises that necessitates judicial action. When a court proceeding is filed related to the trust, the court may have little familiarity with the trustee, the trust, or the trust administration. Once the court resolves the matter or dispute brought before it, the trustee typically resumes administering the trust without further court oversight.

This absence of ongoing court oversight distinguishes trusts from other fiduciary relationships, such as in the case of guardianships and decedents’ estates. In those cases, the default rule is typically that the fiduciary must perform certain actions with the court to serve or to continue serving in their role. This includes qualifying as a fiduciary, posting a bond, and timely filing an inventory and regular accountings,
unless an exception applies.

Given the limited judicial supervision of trusts, a common question arises: when is the trustee of a trust governed by G.S. Chapter 36C of the North Carolina General Statutes required to perform the actions required of court-appointed fiduciaries? Specifically, when must a trustee qualify, post a bond, and file an inventory and regular accounts with the court? Two new flow charts are available to assist clerks of superior court and other court officials, legal practitioners, and others in determining when these obligations apply to the trustee of a trust.  You can download them here.