Short Answer

In North Carolina, wrongful death settlement proceeds are not estate assets and, after limited deductions, must be distributed to the decedent’s heirs under the Intestate Succession Act. If the only heir is a minor, the court must approve the settlement and the child’s share must be safeguarded (for example, by a court‑approved UTMA custodianship, deposit with the Clerk, or a guardianship of the estate). Survival-type personal injury proceeds (for the decedent’s own claims) are estate assets and follow different rules.

Understanding the Problem

You’re asking how North Carolina handles and pays out a personal injury settlement after someone dies when the heir is a minor, and how intestacy rules affect that. The narrow decision here: can the settlement be approved and paid, and how is a minor’s share protected and delivered? One salient fact: the only heir is a minor child.

Apply the Law

North Carolina makes a critical distinction between two types of recoveries: (1) wrongful death damages, which bypass the estate and are distributed to heirs, and (2) survival damages for the decedent’s own personal injury, which become estate assets. A personal representative (administrator) must be appointed to approve and receive any settlement. If a minor will receive any portion of a wrongful death settlement, a North Carolina judge must approve the settlement before funds are distributed. The Clerk of Superior Court oversees the estate file; a district or superior court judge approves the wrongful death settlement if minors are involved. Key timing triggers include opening the estate (or ancillary estate, if applicable) and obtaining court approval before disbursement.

Key Requirements

• Appoint a personal representative: Open an estate so an administrator can act, including settling wrongful death or survival claims.
• Identify the claim type: Wrongful death proceeds are not estate assets; survival damages are estate assets and subject to creditors.
• Get court approval of settlement: If a minor is a recipient, a North Carolina judge must approve any wrongful death settlement before distribution.
• Pay limited charges and liens first: From wrongful death proceeds, pay litigation costs, fees, then only authorized last expenses and any required statutory liens.
• Distribute under intestacy: The balance of wrongful death proceeds goes to heirs per intestacy; with one minor heir and no spouse, 100% goes to the child.
• Protect the minor’s share: Use a court-approved UTMA custodianship, deposit with the Clerk (up to statutory limits), a restricted account, or appoint a guardian of the estate.
• Separate accounting and bond: Keep wrongful death funds separate, file a separate accounting, and post or increase bond before receiving funds if required.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-18-2 (Wrongful death) – Authorizes wrongful death claims, limits charges against proceeds, and requires distribution under intestacy.
• North Carolina Gen. Stat. § 28A-13-3 (Powers of personal representative) – Allows the personal representative to compromise or settle claims; judge approval required when minors are involved.
• North Carolina Gen. Stat. § 7A-111 (Clerk’s administration of funds of minors) – Permits the Clerk to receive and manage certain funds for minors up to defined limits.
• North Carolina Gen. Stat. § 33A-6 (UTMA transfers by fiduciaries) – Allows a personal representative to transfer to a UTMA custodian when in the minor’s best interest, with court oversight above certain amounts.

Analysis

Apply the Rule to the Facts: With a single minor heir, any net wrongful death recovery—after reimbursing case expenses, paying attorney fees, and paying only permitted last expenses and liens—must be distributed entirely to the child under intestacy. Because a minor will receive funds, a judge must approve the settlement. The administrator (the mother) must keep wrongful death proceeds separate from estate assets, post or increase bond before receiving funds if required, and place the child’s share in a court-approved vehicle (UTMA custodianship, deposit with the Clerk, restricted account, or a guardianship of the estate).

Process & Timing

1. Who files: The decedent’s mother (as proposed administrator). Where: Clerk of Superior Court in the North Carolina county of domicile; if the decedent was not domiciled in NC but owned NC real property, seek ancillary administration in the county where that property lies. What: Application for Letters of Administration (AOC‑E‑202) and related bond/resident process agent filings if needed. When: File now so a judge can approve the settlement before funds are released.
2. Seek judicial approval of the wrongful death settlement. If no lawsuit is pending, counsel typically files a limited civil action or a special proceeding to present the settlement for approval. The court may appoint a guardian ad litem for the minor and will review fees, expenses, liens, and proposed net distribution. Timing varies by county.
3. After approval, the administrator receives funds, pays authorized expenses and statutory liens, then distributes the net to the minor under intestacy. Protect the child’s share through a UTMA transfer (court authorization if over the statutory threshold), deposit with the Clerk up to allowable limits, a restricted account, or by qualifying a guardian of the estate. File a separate wrongful death accounting and close the estate when complete.

Exceptions & Pitfalls

• Survival claims are different: money for the decedent’s own personal injury before death becomes an estate asset and is subject to estate creditors and normal administration rules.
• Liens matter: Medicare, Medicaid, or State Health Plan recovery rights can affect how much is paid for medical expenses; do not assume caps eliminate these obligations.
• Do not commingle: Keep wrongful death proceeds separate and file a separate accounting; the Clerk can require this and can review reasonableness of fees and expenses.
• Minor’s money must be safeguarded: UTMA transfers over certain amounts require court authorization; if the child’s share is large, expect to use a guardianship of the estate or court‑controlled funds.
• Bond can change: Even if initially waived or minimal, bond may be required or increased before receiving settlement proceeds.
• Parent‑administrator conflicts: When the administrator is also the minor’s parent, the court may appoint a guardian ad litem for settlement approval to protect the child’s interests.

Talk to a Probate Attorney

If you’re dealing with court approval and distribution of a wrongful death settlement to a minor heir, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 000-000-0000.

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.