Session Law 2020-50, Senate Bill 595 constitutes a major rewrite, clarification and recodification of the North Carolina General Statutes dealing with tenancy by the entirety and joint tenancy with right of survivorship. The recodified tenancy by the entirety provisions of N.C.G.S. Chapter 39 have been moved to N.C.G.S. Chapter 41 and joint tenancy with right of survivorship have been enlarged to codify some common law provisions and to provide assurances that any clearly stated intent to provide survivorship of an interest will be effective. The full text of the statute as adopted follows the analysis below.  The bill was signed into law by Governor Cooper on June 30 and the estate planning provisions are effective June 30, 2020. The Register of Deeds technical changes are effective August 1, 2020.

Tenancy by the Entirety

The bill introduces itself with a handy conversion table for the entirety statutes that we suspect will be widely copied and clipped as a handy reference:

Former Citation G.S. 31A-5 G.S. 39-13.3(b) G.S. 39-13.3(c) G.S. 39-13.5 G.S. 39-13.6(a) G.S. 39-13.6(b) G.S. 39-13.6(c) G.S. 39-13.7 G.S. 41-2.5	Recodified Citation G.S. 41-64(b) G.S. 41-56(b) G.S. 41-63(4) G.S. 41-56(c) G.S. 41-58 G.S. 41-56(a) G.S. 41-59(b) G.S. 41-65 G.S. 41-56(d)

In the definitions section, the Act clarifies that a tenancy by the entirety can be created in any conveyance of title to real property by deed or devise or other instrument transferring title to real property and defines spouses as two individuals then legally married to each other.

Other new provisions also include: N.C.G.S. Section 41-57 which creates a rebuttable presumption of a gift by spouse furnishing consideration.

"Except for purposes of equitable distribution as provided under G.S. 50-20 and G.S. 50-21, when an individual furnishing the consideration for real property causes title to be placed in the name of the individual and the individual's spouse, there is a presumption of a gift to the individual's spouse of an entirety interest, which is rebuttable by clear, cogent, and convincing evidence."

N.C.G.S. Section 41-59(a) now provides that income derived from property held by spouses as tenants by the entirety does not retain its character as tenancy by the entirety, but rather, becomes personal property held by the spouses as tenants in common in equal shares.

N.C.G.S. Section 41-60 deals with the liability of entireties property for debts of spouses. The section is essentially a codification of the common law. The property is not liable for individual debts of either spouse and a judgment lien against one alone does not attach to the property. The property may be conveyed by joint deed of both spouses free and clear of such judgment. The property is liable for obligations of both spouses and a judgment lien against both attaches and may be enforced. Upon termination of the tenancy and conversion to another form of estate, a valid judgment lien against one spouse attaches at that time to that spouse's interest in the new estate. Conversions of tenancy by the entirety property to another form of an estate occurs upon divorce and property is then converted to a tenancy in common as provided in G.S.41-63(5) or upon death of a spouse, in which event the surviving spouse acquires the entire legal title as provided in G.S.41-64 and only the judgment lien against the surviving spouse will attach at that time to the property.

N.C.G.S. Section 41-61 provides that neither spouse is entitled to reimbursement of expenditures made on the entirety property, including debt payments while the tenancy by the entirety exists.

When a tenancy is converted to a tenancy in common, responsibility for such expenditures will be allocated as provided by the law governing tenants in common or as directed in a court order such as in an equitable distribution proceeding. N.C.G.S. Section 41-62 deals with the character of proceeds of insurance coverage. Even though the policy was issued in the name of only one spouse and paid for by that spouse, and the insurance proceeds become divisible personal property held by the spouses as tenants in common unless the parties provide otherwise by contract.

N.C.G.S. Section 41-63 codifies the common law as to how a tenancy by the entirety may be terminated other than by death.

1. Voluntary sale and conveyance of property, Proceeds of the sale, including surplus funds generated from a foreclosure sale, are personal property held by the spouses as tenants in common.
2. Spouses executing a joint instrument conveying the property to themselves as tenants in common or in severalty.
3. Involuntary transfer of title. The proceeds resulting from the transfer are held by the spouses as tenants by the entirety. An involuntary transfer of title includes:

a. A sale pursuant to Article 15 of Chapter 35A of the General Statutes as to an incompetent spouse.
b. An appropriation in a condemnation proceeding by the North Carolina State Highway Commission.

4. The conveyance from a one spouse to the other spouse. The joinder of a spouse in a conveyance made by the grantor pursuant to this subdivision is not necessary, but the conveyance is subject to the provisions of G.S. 52-10 or G.S. 52-10.1, except that an acknowledgment by the spouse of the grantor is not necessary.
5. An absolute divorce of the spouses which converts the property to a tenancy in common.
6. A judgment of forfeiture ordering divestment of an interest in tenancy by the entirety pursuant to the RICO Statutes. The effect of a judgment when one spouse is an innocent person is as defined in G.S. 75D-5(i) is governed by G.S. 75D-8(a).

N.C.G.S. Section 41-64(a) codifies that the termination of tenancy by the entirety upon death of a spouse the property belongs to the surviving spouse by right of purchase under the original grant or devise and by virtue of survivorship. The deceased spouse has no estate which is descendable or divisible. Subsection (b) make explicit exception where the surviving spouse is a slayer, as defined in G.S. 31A-3(3).

N.C.G.S. Section 41-65 makes conforming changes to the provision dealing with the treatment of tenancy by the entirety property conveyed into a grantor trust. Two entirely new subsections have been added:

(f) Notice may be given in a statement in the conveyance of the tenancy by the entireties real property to the trust that the real property is held under this section and that, as of the date of the conveyance, the requirements are met providing for the application of G.S. 41-60(a)(1) protecting the real property from liability for the individual debts of either spouse.
(g) A person entering into a transaction involving real property held in trust under this section may request confirmation from the trustee whether the provisions of G.S. 41-60(a)(1) are met at the time of the transaction.

Finally, N.C.G.S. Section 41-66 applies the common law and principle of equity to the extent they are not inconsistent with the provisions of the statute.

Joint Tenancy with Right of Survivorship

The provisions of N.C.G.S. Section 41-2 are greatly overhauled and we are again provided a useful conversion table:

Former Citation Third sentence of G.S. 41-2(a) Fourth sentence of G.S. 41-2(a) First sentence of G.S. 41-2(b) Second sentence of G.S. 41-2(b) Third sentence of G.S. 41-2(b) Fourth sentence of G.S. 41-2(b) Fifth sentence of G.S. 41-2(b)

Recodified Citation Second sentence of G.S. 41-73(c)(3) First sentence of G.S. 41-73(c)(3) G.S. 41-72(a) G.S. 41-72(d) G.S. 41-74 G.S. 41-72(b) G.S. 41-72(c)

N.C.G.S. Section 41-71 enumerates the ways in which a joint tenancy with right of survivorship may be created. Unless the statute is followed a tenancy in common is created. A conveyance to two or more persons creates a joint tenancy with right of survivorship only if the instrument expresses an intent to create a joint tenancy with right of survivorship. However, subsection (b) provides that the use of the following words is deemed to express an intent to a right of survivorship unless the instrument otherwise provides: "joint tenants with right of survivorship," "joint tenants," "joint tenancy," "tenants in common with right of survivorship," "joint with right of survivorship," "with right of survivorship." As a result of this new provision, the phrase; "tenants in common with right of survivorship" commonly used in asset protection planning will be given its obvious intended effect.

The second highly significant codification deals with termination of a joint tenancy with right of survivorship and is set out in N.C.G.S. Section 41-73. Subsection (a) enumerates the event that terminate survivorship by collective action of the tenants:

(1) The conveyance to a third party by all of the joint tenants of all of their interests in the property held in the joint tenancy, including a foreclosure sale pursuant to a power of sale in a deed of trust.
(2) The execution of an instrument with a third party by all of the joint tenants that does not convey all of their interests in the property held in the joint tenancy to the third party, including a lease, executory contract of sale, option to purchase, or deed of trust, and an intention to terminate expressly appears in the instrument.
(3) The execution of an instrument by all joint tenants for the purpose of expressing an intent to terminate the joint tenancy as between or among themselves

It should be observed that N.C.G.S. Section 41-73(a)(2) will preserve the joint tenancy with right of survivorship when a deed of trust is executed unless the deed of trust explicitly extinguishes it.

Subsection (b) deals with unilateral termination. A joint tenancy with right of survivorship may be unilaterally terminated by:

(1) Conveyance to a third party by a joint tenant of all of that joint tenant's interest including a foreclosure sale pursuant to a power sale in a deed of trust.
(2) Execution of an instrument with a third party by a joint tenant that does not convey all of that joint tenant's interest to the third party, including a lease, executory contract of sale, option to purchase, or deed of trust, where the intention to terminate is expressed.
(3) Execution of an instrument by a joint tenant where the joint tenant is both the grantor and the grantee where the intention to terminate is expressed. This will be effective only if recorded in the register of deeds in the county where the real property lies prior to the death of the joint tenant.
(4) Filing of a petition to partition by a joint tenant.

Nothing in the Act limits a court’s lawful jurisdiction to order a termination. If a termination occurs pursuant (2) or (3) above or because of the filing of a petition by a joint tenant and there are two joint tenants, a tenancy in common is created between the joint tenants. If there are more than two joint tenants, a tenancy in common is created among the joint tenant causing the termination and the remaining joint tenants who continue as joint tenants with right of survivorship as between or among themselves.

The provisions of the Act do not apply to; executors or trustees, partnerships, business entities, accounts established under G.S. 42-2.1 or G.S. 42-2.2 to the extent inconsistent with the provisions of the Article and life estates. The common law and principles of equity supplement these provisions except to the extent they conflict or are inconsistent. The act is effective when it becomes law.

Legislation follows:

AN ACT TO MAKE CHANGES AND TECHNICAL CORRECTIONS TO THE GENERAL STATUTES CONCERNING REAL PROPERTY LAW, AS RECOMMENDED BY THE NORTH CAROLINA BAR ASSOCIATION.
The General Assembly of North Carolina enacts:
PART I. RECODIFICATIONS AND CHANGES TO TENANCY BY THE ENTIRETY
SECTION 1.(a) Chapter 41 of the General Statutes is amended by adding a new Article 5, and G.S. 41-55 through G.S. 41-69 are reserved for that Article.

SECTION 1.(b) The following General Statutes are recodified in Article 5 of Chapter 41 of the General Statutes, as created by subsection (a) of this section, as set forth in the table below:

Former Citation G.S. 31A-5 G.S. 39-13.3(b) G.S. 39-13.3(c) G.S. 39-13.5 G.S. 39-13.6(a) G.S. 39-13.6(b) G.S. 39-13.6(c) G.S. 39-13.7 G.S. 41-2.5	Recodified Citation G.S. 41-64(b) G.S. 41-56(b) G.S. 41-63(4) G.S. 41-56(c) G.S. 41-58 G.S. 41-56(a) G.S. 41-59(b) G.S. 41-65 G.S. 41-56(d)

SECTION 1.(c) Article 5 of Chapter 41 of the General Statutes, as created by subsection (a) of this section and containing the sections recodified in subsection (b) of this section, reads as rewritten:

"Article 5.
"Tenancy by the Entirety.

§ 41-55. Definitions.
For the purposes of this Article, the following definitions apply:

(1) Conveyance. – A transfer of title to real property by deed or devise or other instrument transferring title to real property.
(2) Income. – Rents and profits from property held as tenants by the entirety.
(3) Spouses. – Two individuals then legally married to each other.

"§ 41-56. Creation of tenancy by the entirety.

(a) A Unless a contrary intention is expressed in the conveyance, a conveyance of real property, or any interest therein, to spouses vests title in them as tenants by the entirety when the conveyance is to one of the following:

(1) A named man "and wife."
(2) A named woman "and husband."
(3) A named individual "and wife."
(4) A named individual "and husband."
(5) A named individual "and spouse."
(6) Two named individuals, married to each other at the time of conveyance, whether or not identified in the conveyance as being (i) husband and wife (ii) spouses, or (iii) married to each other.

(b) A conveyance by a grantor of real property, or any interest therein, to an individual and his or her spouse vests the property in the grantees as tenants by the entirety, unless a contrary intention is expressed in the conveyance. The joinder of a spouse in a conveyance made by the grantor under this subsection is not necessary, but the conveyance is subject to the provisions of G.S. 52-10 or G.S. 52-11, except acknowledgement of the spouse of the grantor is not necessary.
(c) When an individual owns an undivided interest in real property as a tenant in common with some individual or individuals other than his or her spouse and there occurs an actual partition of the property, a tenancy by the entirety may be created in the individual who owned the undivided interest and his or her spouse as follows:

(1) In a division by cross-deed or deeds, between or among the tenants in common if the instrument contains both of the following:

a. The intent of the tenant in common to create a tenancy by the entirety with his or her spouse in this exchange of deeds is clearly stated in the granting clause of the deed or deeds to such the tenant in common and his or her spouse.
b. The deed or deeds to the tenant in common and his or her spouse is signed by the tenant in common and is acknowledged before a certifying officer in accordance with G.S. 52-10;

(2) In a judicial proceeding for partition where both spouses have the right to become parties to the proceeding and to have their pleadings state that the intent of the tenant in common is to create a tenancy by the entirety with his or her spouse. The order of partition shall provide that the real property assigned to the tenant and his or her spouse shall be owned by them as tenants by the entirety.

(d) When spouses become co-owners of a mobile home, in the absence of anything to the a contrary intention appearing in the instrument of title, the spouses become tenants by the entirety with all the incidents of an estate by the entirety in real property, including the right of survivorship in the case of death of either spouse. For the purposes of this subsection, it is immaterial whether the property at any particular time shall be classified for any purpose as either real or personal. Nothing in this subsection shall be deemed to limit or prohibit any other type of ownership otherwise authorized by law. For the purposes of this section subsection, the term "mobile home" means a portable manufactured housing unit designed for transportation on its own chassis and placement on a temporary or semipermanent foundation having a measurement of over 32 feet in length and over eight feet in width. As used in this subsection, the term "mobile home" also means a double-wide mobile home which is two or more portable manufactured housing units designed for transportation on their own chassis, which connect on site for placement on a temporary or semipermanent foundation having a measurement of over 32 feet in length and over eight feet in width.

" § 41-57. Presumption of gift by spouse furnishing consideration.
Except for purposes of equitable distribution as provided under G.S. 50-20 and G.S. 50-21, when an individual furnishing the consideration for real property causes title to be placed in the name of the individual and the individual's spouse, there is a presumption of a gift to the individual's spouse of an entirety interest, which is rebuttable by clear, cogent, and convincing evidence.
"§ 41-58. Possession and control of entireties property.

(a) Spouses shall have an equal right to the control, use, possession, and income from property held by them in tenancy as tenants by the entirety.
(b) Neither spouse may bargain, sell, lease, mortgage, transfer, convey, sign, pay out, or in any manner encumber any property held by them as tenants by the entirety without the written joinder of the other spouse. This section shall not be construed to require the spouse's joinder where a different provision is made under G.S. 41-56(b), G.S. 41-63(4), G.S. 39-13, G.S. 39-13.3, G.S. 39-13.4, or G.S. 52-10.
(c) The mortgage or sale of an interest in real property held by spouses as tenants by the entirety where one or both spouses is incompetent is governed by the provisions of Article 15 of Chapter 35A of the General Statutes.

"§ 41-59. Income derived from entireties property.

(a) Income derived from property held by spouses as tenants by the entirety becomes personal property held by the spouses as tenants in common in equal shares.
(b) For income tax purposes, each spouse is considered to have received one-half the income or loss from property owned held by the couple spouses as tenants by the entirety.

" § 41-60. Liability of entireties property for debts of spouses.

(a) With respect to property held by spouses as tenants by the entirety prior to its termination, all of the following shall apply:
(1) The property may not be held liable for individual debts of either spouse and a judgment lien against one spouse alone does not attach to the property. The property may be conveyed by joint deed of both spouses to anyone of their choice free and clear of a judgment lien against either spouse.
(2) The property is liable for obligations of both spouses and a judgment lien against both spouses upon a joint obligation attaches to the property which may be sold under execution to satisfy the judgment.
(b) Upon termination of the tenancy by the entirety and the conversion of the real property held by the entirety to another form of estate, a judgment lien against one spouse during tenancy by the entirety, if still active and unsatisfied, shall attach at that time to that spouse's interest in the new estate. Conversions of tenancy by the entirety property to another form of an estate occur, without limitation, under either of the following circumstances:

(1) Upon divorce of the spouses, in which event the property is converted to a tenancy in common as provided in G.S. 41-63(5) and the judgment lien against the spouse will attach at that time to the undivided interest of the spouse.
(2) Upon death of a spouse, in which event the surviving spouse acquires the entire legal title as provided in G.S. 41-64 and the judgment lien against the surviving spouse will attach at that time to the property.

" § 41-61. Reimbursement for expenditures made on entireties property.

(a) Neither spouse holding property as tenants by the entirety is entitled to reimbursement of expenditures made on the property, including payments on indebtedness encumbering the property, while the tenancy by the entirety exists.
(b) When the tenancy by the entirety is converted to a tenancy in common by absolute divorce or otherwise, responsibility for expenditures for the property held as tenants in common is allocated as provided by the law governing tenants in common, unless otherwise directed in a court order such as in an equitable distribution proceeding.

" § 41-62. Insurance coverage and character of proceeds.
Where property held as tenants by the entirety is insured, unless the parties by contract have provided what disposition should be made of the insurance proceeds, the policy and insurance proceeds inure to the benefit of the entire estate even though the policy was issued in the name of only one spouse and paid for by that spouse, and the insurance proceeds become divisible personal property held by the spouses as tenants in common.
" § 41-63. Termination of tenancy by the entirety other than upon death of a spouse; effects of termination.
Events terminating a tenancy by the entirety other than the death of a spouse and the effects of termination include the following:

(1) The voluntary sale and conveyance of property held as tenants by the entirety to a third party, including a foreclosure sale pursuant to a power of sale in a deed of trust. Proceeds of the sale, including surplus funds generated from a foreclosure sale, are personal property held by the spouses as tenants in common.
(2) The voluntary partition between the spouses executing a joint instrument conveying the property held as tenants by the entirety to themselves as tenants in common or in severalty.
(3) The involuntary transfer of title of property held by spouses as tenants by the entirety. The proceeds resulting from the transfer are held by the spouses as tenants by the entirety. An involuntary transfer of title includes:

a. A sale pursuant to Article 15 of Chapter 35A of the General Statutes as to an incompetent spouse.
b. An appropriation in a condemnation proceeding by the North Carolina State Highway Commission.

(4) The conveyance from one spouse to the other spouse of his or her interest in property held as tenants by the entirety. The conveyance vests the property or interest formerly held as tenants by the entirety in the other spouse. The joinder of a spouse in a conveyance made by the grantor pursuant to this subdivision is not necessary, but the conveyance is subject to the provisions of G.S. 52-10 or G.S. 52-10.1, except that an acknowledgment by the spouse of the grantor is not necessary.
(5) An absolute divorce of the spouses. An absolute divorce converts property held as tenants by the entirety to a tenancy in common.
(6) A judgment of forfeiture ordering divestment of an interest in tenancy by the entirety pursuant to Chapter 75D of the General Statutes. The effect of a judgment when one spouse is an innocent person as defined in G.S. 75D-5(i) is governed by G.S. 75D-8(a).

" § 41-64. Termination of tenancy by the entirety upon death of a spouse.

(a) Except as provided in subsection (b) of this section, upon the death of a spouse, property held as tenants by the entirety belongs to the surviving spouse by right of purchase under the original grant or devise and by virtue of survivorship. The deceased spouse has no estate which is descendable or divisible.
(b) Where a slayer, as defined in G.S. 31A-3(3), and decedent hold property as tenants by the entirety, one-half of the property shall pass upon the death of the decedent to the decedent's estate, and one-half shall be held by the slayer during the slayer's life, subject to pass upon the slayer's death to the slain decedent's heirs or devisees as defined in G.S. 28A-1-1.

"§ 41-65. Entireties property conveyed to trusts.

(a) Any real property held by spouses as tenants by the entirety and conveyed (i) to a joint trust or (ii) in equal shares to two separate trusts shall no longer be held by the spouses as tenants by the entirety and shall be disposed of by the terms of the trust or trusts. However, subject to subsection (b) of this section, the provisions of G.S. 41-60(a)(1) shall apply to the property held in trust as would exist if the spouses had continued to hold the property as tenants by the entireties.
(b) The provisions of G.S. 41-60(a)(1) shall apply to the property held in trust as long as all of the following apply:

(1) The spouses remain married.
(2) The property continues to be held in the trust or trusts as provided in subsection (a) of this section.
(3) Both spouses are current beneficiaries of the joint trust if the real property is conveyed to that trust or of each separate trust if the real property is conveyed in equal shares to their separate trusts.

(c) If immediately preceding the death of the first spouse to die, the provisions of G.S. 41-60(a)(1) apply to the real property held in trust upon the death of a spouse, the provisions of G.S. 41-60(b)(2) shall apply to the property.
(d) The trustee acting under the express provisions of a trust instrument or with the written consent of both the spouses may waive the application of G.S. 41-60(a)(1) as to any specific creditor or any specifically described property including all separate creditors of a spouse or all former tenancy by the entirety property conveyed to the trustee.
(e) For purposes of this section, all of the following apply:

(1) The reference to the real property conveyed to or held in the trust shall be deemed to include the proceeds arising from the transfer of title of the real property.
(2) The term "joint trust" means a revocable or irrevocable trust of which both the husband and wife are the settlors.
(3) The term "separate trusts" means revocable or irrevocable trusts of which one spouse is the settlor of one trust and the other spouse is the settlor of the other trust.
(4) The spouses are "beneficiaries" of a trust if they are distributees or permissible distributees of the income or principal of the trust whether or not other individuals are also current or future beneficiaries of the trust.

(f) Notice may be given in a statement in the conveyance of the tenancy by the entireties real property to the trust that the real property is held under this section and that, as of the date of the conveyance, the requirements are met providing for the application of G.S. 41-60(a)(1) protecting the real property from liability for the individual debts of either spouse.
(g) A person entering into a transaction involving real property held in trust under this section may request confirmation from the trustee whether the provisions of G.S. 41-60(a)(1) are met at the time of the transaction.

" § 41-66. Common law of tenancy by the entirety; equitable principles.
The common law of tenancy by the entirety and principles of equity supplement this Article except to the extent it conflicts or is inconsistent with a provision of this Article or the laws of this State."

PART II. CHANGES TO JOINT TENANCY
SECTION 2.(a) Chapter 41 of the General Statutes is amended by creating a new Article 6, and G.S. 41-70 through G.S. 41-79 are reserved for that Article.
SECTION 2.(b) The following General Statutes are recodified in Article 6 of Chapter 41 of the General Statutes, as created by subsection (a) of this section, as set forth in the table below:

Former Citation Third sentence of G.S. 41-2(a) Fourth sentence of G.S. 41-2(a) First sentence of G.S. 41-2(b) Second sentence of G.S. 41-2(b) Third sentence of G.S. 41-2(b) Fourth sentence of G.S. 41-2(b) Fifth sentence of G.S. 41-2(b)

Recodified Citation Second sentence of G.S. 41-73(c)(3) First sentence of G.S. 41-73(c)(3) G.S. 41-72(a) G.S. 41-72(d) G.S. 41-74 G.S. 41-72(b) G.S. 41-72(c)

SECTION 2.(c) Article 6 of Chapter 41 of the General Statutes, as created by subsection (a) of this section and containing the sections recodified in subsection (b) of this section, reads as rewritten:

Article 6.
Joint Tenancy.

" § 41-70. Definitions.
For the purposes of this Article, the following definitions apply:

(1) Conveyance. – A transfer of title to real or personal property by deed, devise, assignment, or other means of transferring title.
(2) Termination. – A severance of the right of survivorship resulting in the creation of a tenancy in common as provided in this Article. The term is used in the context of an estate with a joint tenancy with a right of survivorship.

" § 41-71. Creation of a joint tenancy with right of survivorship.

(a)A conveyance to two or more persons creates a tenancy in common unless a joint tenancy with right of survivorship is created as provided in subsection (b) of this section or a tenancy by the entirety is created as provided by the law governing tenancy by the entireties.
(b)A conveyance to two or more persons creates a joint tenancy with right of survivorship if the instrument expresses an intent to create a joint tenancy with right of survivorship. The following words in the instrument shall be deemed to express an intent to create a joint tenancy with right of survivorship unless the instrument otherwise provides: "joint tenants with right of survivorship," "joint tenants," "joint tenancy," "tenants in common with right of survivorship," "joint with right of survivorship," "with right of survivorship."
(c)Nothing in this Article prohibits joint tenants from entering into any agreement with regard to the property held in joint tenancy, including, without limitation, an agreement that notice must be given to other joint tenants before any joint tenant terminates the joint tenancy as provided in G.S. 41-73(b).

" § 41-72. Determination of the interests of joint tenants in a joint tenancy with right of
survivorship.

(a)The interests of property joint tenants in a joint tenancy with right of survivorship shall be deemed to be equal unless otherwise provided in the instrument of conveyance.
(b)This section shall apply to any conveyance of an interest in property created at any time that explicitly seeks to create unequal ownership interest in a joint tenancy with right of survivorship.
(c)Distributions made prior October 10, 2009, that were made in equal amounts from a joint tenancy with the right of survivorship that sought to create unequal ownership shares shall remain valid and shall not be subject to modification on the basis of this section.
(d)Any joint tenancy interest conveyed to individuals married to each other and to one or more other joint tenants in the same instrument of conveyance shall be held as by the married individuals in a single tenancy by the entirety, and the married individuals shall be treated as a single joint tenant, unless otherwise provided in the instrument.

" § 41-73. Termination of a joint tenancy with right of survivorship.

(a) Events terminating a joint tenancy with right of survivorship due to the collective action of all joint tenants include the following:

(1) The conveyance to a third party by all of the joint tenants of all of their interests in the property held in the joint tenancy, including a foreclosure sale pursuant to a power of sale in a deed of trust.
(2) The execution of an instrument with a third party by all of the joint tenants that does not convey all of their interests in the property held in the joint tenancy to the third party, including a lease, executory contract of sale, option to purchase, or deed of trust, and an intention to terminate expressly appears in the instrument.
(3) The execution of an instrument by all joint tenants for the purpose of expressing an intent to terminate the joint tenancy as between or among themselves.

(b) Events terminating a joint tenancy with right of survivorship due to the unilateral action of a joint tenant include the following:

(1) The conveyance to a third party by a joint tenant of all of that joint tenant's interest in the property held in the joint tenancy, including a foreclosure sale pursuant to a power sale in a deed of trust.
(2) The execution of an instrument with a third party by a joint tenant that does not convey all of that joint tenant's interest to the third party, including a lease, executory contract of sale, option to purchase, or deed of trust, and an intention to terminate expressly appears in the instrument.
(3) The execution of an instrument by a joint tenant where the joint tenant is both the grantor and the grantee if the intention to terminate expressly appears in the instrument. A termination under this subdivision shall be effective only upon the recording, prior to the death of the joint tenant, of an instrument expressing an intent to terminate in the office of the register of deeds in the county or counties where the real property is situated.
(4) The filing by a joint tenant of a petition to partition.

(c) When a termination occurs, a tenancy in common is created as follows:

(1) If a termination occurs under subdivision (1) of subsection (a) of this section because of the conveyance of all of the joint tenants' interests to a third party, a tenancy in common is created among the tenants as to any proceeds of sale or surplus funds generated from a foreclosure sale.
(2) If a termination occurs because of the execution by all of the joint tenants of an instrument described in subdivision (2) or (3) of subsection (a) of this section, a tenancy in common is created among the tenants.
(3) If a termination occurs under subdivision (a) of subsection (b) of this section because one of the joint tenants conveys all of that joint tenant's interest to a third party and there are only two joint tenants, a tenancy in common is created between the third party and the other joint tenant. If there are more than two joint tenants and one of the joint tenants conveys all of that joint tenant's interests to a third, party, a tenancy in common is created among the third party and the remaining joint tenants, who remain joint tenants with right of survivorship as between or among themselves.
(4) If a termination occurs because of the execution by a joint tenant of an instrument described in subdivision (2) or (3) of subsection (b) of this section or because of the filing of a petition by a joint tenant as provided in subdivision (4) of subsection (b) of this section, and there are two joint tenants, a tenancy in common is created between the joint tenant causing the termination and the other joint tenant. If there are more than two joint tenants, a tenancy in common is created among the joint tenant causing the termination and the remaining joint tenants who continue as joint tenants with right of survivorship as between or among themselves.

(d) The following events do not result in a termination of joint tenancy with right of survivorship:

(1) The filing of a judgment against one joint tenant.
(2) The filing of a bankruptcy petition by one joint tenant.
(3) When married individuals holding an interest as tenants by the entirety in a joint tenancy with one or more other joint tenants divorce. Unless the divorced individuals agree otherwise, the divorced individuals shall be deemed to hold their existing interest equally as tenants in common as to each other, but as joint tenants with right of survivorship as to remaining joint tenancy holders.

(e) Nothing in this section shall limit the manner or effect of a termination ordered by a court of competent jurisdiction.

" § 41-74. Application of 120-hour survival requirement to joint tenancy with right of survivorship.
The provisions of G.S. 28A-24-3 apply to joint tenancy interests among two or more joint tenants holding property in joint tenancy with right of survivorship upon the death of one or more of the joint tenants.
" § 41-75. Inapplicability of Article.
This Article does not apply to any of the following:

(1) Executors or trustees in their representative capacity.
(2) Partnerships governed by Chapter 59 of the General Statutes.
(3) Business entities.
(4) Accounts established under G.S. 42-2.1 or G.S. 42-2.2 to the extent inconsistent with the provisions of this Article.
(5) Life estates.

" § 41-76. Common law of joint tenancy; equitable principles.
The common law of joint tenancy with right of survivorship and principles of equity supplement this Article except to the extent it conflicts or is inconsistent with a provision of this Article or the laws of this State.
" § 41-77. Citation to prior statutes.
A citation to a former statute recodified in Article 5 of Chapter 41 of the General Statutes, whether made before or after adoption of Article 5, shall be deemed to be a citation to the recodified statute, unless application of this rule of construction would substantially impair the rights of a party."
SECTION 2.(d) The remaining sentences of G.S. 41-2 not recodified under this section are repealed.

PART III. REAL PROPERTY TECHNICAL CORRECTIONS
SECTION 3.(b) G.S. 47-17.1 reads as rewritten:
" § 47-17.1. Documents registered or ordered to be registered in certain counties to designate draftsman; exceptions.
The register of deeds of any county in North Carolina shall not accept for registration, nor shall any judge order registration pursuant to G.S. 47-14, of any deeds or deeds of trust, executed after January 1, 1980, unless the first page of the deeds or deeds of trust bears an entry showing the name the drafter of the deed or deed of trust. The register of deeds shall not be required to verify or make inquiry concerning the capacity or authority of the person or entity shown as the drafter on the instrument."
SECTION 3.(c) This section becomes effective August 1, 2020.

SECTION 3.1. If Senate Bill 729, 2019 Regular Session, becomes law, G.S. 41-56(c), as amended by Section 13 of that act and Section 1 of this act, reads as rewritten:

"(c) When an individual owns an undivided interest in real property as a tenant in common with some individual or individuals other than his or her spouse and there occurs an actual partition of the property, a tenancy by the entirety may be created in the individual who owned the undivided interest and his or her spouse as follows:

(1) In a division by cross-deed or deeds between or among the tenants in common if the instrument contains both of the following:

> a. The intent of the tenant in common to create a tenancy by the entirety with his or her spouse in this exchange of deeds is clearly stated in the granting clause of the deed or deeds to the tenant in common and his or her spouse.
b. The deed or deeds to the tenant in common and his or her spouse must be is signed by the tenant in common and must be is acknowledged before a certifying officer in accordance with G.S. 52-10.

(2) In a judicial proceeding for actual partition the where both spouses have the right to become parties to the proceeding and to have their pleadings state that the intent of the tenant in common is to create a tenancy by the entirety with his or her spouse. The order of partition must provide that the real property apportioned to the tenant in common and his or her spouse shall be owned by them as tenants by the entirety."

PART IV. EFFECTIVE DATE
SECTION 4. Except as otherwise provided, this act is effective when it becomes law.

In the General Assembly read three times and ratified this the 19th day of June, 2020.
s/ Philip E. Berger
President Pro Tempore of the Senate
s/ David R. Lewis
Presiding Officer of the House of Representatives
_____________________________________
Roy Cooper
Governor
Approved __________.m. this ______________ day of ___________________, 2020