Historically, trust and estate attorneys in North Carolina have practiced under the assumption that Wilson v. Wilson, 203 N.C. App. 45, 690 S.E.2d 710 (2010), stood for the proposition that silent trusts are not a viable option in North Carolina. It now seems that the current North Carolina Court of Appeals is somewhat stepping away from that position.
In Wilson, the Court there held that beneficiaries could demand and be entitled to information about the trust to protect their rights, even if the terms of the trust explicitly waived such demand rights. In Wilson, the basis for the belief that a grantor could waive these rights and essentially create a “silent trust” as such trusts are known, arises from the reading of two statutes: N.C.G.S. § 36C-1-105 and N.C.G.S. § 36C-8-813. Under N.C.G.S. § 36C-1-105, there is a list of statutory provisions in the North Carolina Uniform Trust Code that are mandatory, and therefore cannot be waived in a trust. N.C.G.S. § 36C-8-813 provides duties to inform and give adequate information to the beneficiaries of a trust. Important to the argument at issue in Wilson, N.C.G.S. § 36C-8-813 does not appear in the list found in N.C.G.S. § 36C-1-105, so arguably the duties to inform and report can be explicitly overridden and modified by the terms of the trust, or at least the attorney arguing the case before the North Carolina Court of Appeals in Wilson believed.
The Court in Wilson, however, held that regardless of waiver provisions in a trust of information rights to beneficiaries, the beneficiaries are still entitled to information to be able to enforce their rights. The Court relied on the trustee’s duty of good faith described in N.C.G.S. § 36C-1-105(b)(2) and the Court’s general authority under N.C.G.S. § 36C-1-105(b)(9) which provides “The power of the court to take any action and exercise any jurisdiction as may be necessary in the interests of justice.” Therefore, the Court held the terms of the trust at issue in Wilson could not override the duties to provide information to trust beneficiaries; therefore, the waiver of information rights provisions in the trust were void. So, presumably, silent trusts are prohibited in North Carolina.
Recently, however, the current North Carolina Court of Appeals, has seemed to distance itself from the underlying rationale in Wilson. In the recent case of In re: Smith (24-859 – Unpublished) filed August 20, 2025, the beneficiaries of a trust demanded “each and every” financial statement, tax return, check copy, and related documentation for several years. The terms of the trust in the case required only that annual accountings be provided to the beneficiaries and nothing more. It seems the beneficiaries here were relying on their understood rights from Wilson to go beyond the terms of the trust and to request all possible documents relevant to enforcing their rights as a beneficiary. Given the broad language from the Court in Wilson, it seemed reasonable to believe the beneficiaries were not strictly bound by the terms of a trust in what they could request from the Trustee.
The Court in Smith, however, denied the beneficiaries what they wanted. The Court held instead that the terms of the trust control. The Court pointed out that N.C.G.S. § 36C-8-813 was not a mandatory provision found in N.C.G.S. § 36C-1-105(b) and therefore could be overridden, as the Grantor did here, allowing only annual accounts to be provided to the beneficiaries. Nowhere in Smith did the Court cite arguments about broad fiduciary duties of good faith or beneficiaries protecting their rights as the Court did in Wilson. Indeed, the Court in Smith seems to limit the holding of Wilson to only scenarios where the beneficiaries have sued for a breach of fiduciary duty are they entitled to demand and receive more information than what the terms of the trust would otherwise require. If there is no lawsuit for breach of fiduciary duty, as was the case in Smith, then the terms of the trust control and the beneficiaries are not entitled to anything beyond what the trust provides. It is doubtful that many practicing attorneys read the original Wilson case to have the “only in cases of lawsuits for breach of fiduciary duty are silent trusts prohibited” limitation.
Although unpublished cases do not constitute controlling legal authority, it is interesting how the Court in Smith changed its tone on the concept of silent trusts. Unpublished cases may hint at judicial trends. In 2010 in Wilson, silent trusts seemed to be inconceivable in North Carolina given the Court’s broad language. Now it seems that unless someone is suing for a breach of fiduciary duty, the terms of the trust can waive most, if not all, of the informational rights under N.C.G.S. § 36C-8-813, thereby creating a silent trust.
Perhaps the door for Silent Trusts in North Carolina has been, at least slightly, opened.