Short Answer

In North Carolina, you can challenge a transfer made under a durable power of attorney (POA) by seeking court oversight of the agent’s conduct, demanding an accounting, and asking the court to void self-dealing transfers, restore assets, or impose a constructive trust. If the principal has died, the estate’s personal representative typically files actions to recover property and address wrongful deeds, while claims for money damages and deed cancellations proceed in Superior Court. Deadlines can be short, so act promptly.

Understanding the Problem

In North Carolina, how do you challenge an agent’s transfer of a parent’s property made under a durable POA when the agent used the POA to deed the real estate to themselves and gave away personal property, the agent has since died, and the agent’s child now occupies the property under the agent’s trust?

Apply the Law

North Carolina’s Uniform Power of Attorney Act gives courts tools to police agent conduct. Agents owe fiduciary duties to act in the principal’s best interests and keep records. Self-dealing or gifts, especially to the agent, generally require clear authority in the POA; absent that, the transfer can be voided. Oversight and certain remedies (like compelling an accounting) begin with the Clerk of Superior Court, but claims for money damages and actions to set aside deeds are filed in the Superior Court Division. When the principal has died, the personal representative (PR) leads recovery efforts through estate proceedings and civil actions. Time limits apply, though they may pause while the agent still serves.

Key Requirements

• Standing: An “interested person” (while the principal is alive) or the personal representative after death may seek relief; heirs can often participate through the estate process.
• Grounds to challenge: Breach of fiduciary duty, lack of authority for gifts/self-dealing, undue influence, lack of capacity, conversion of personal property, or improper real estate conveyances.
• Forum: Clerk of Superior Court for POA oversight and accountings; Superior Court for damages, deed cancellations, constructive trust, and injunctions.
• Relief available: Accounting, suspension/removal of agent (if living), voiding acts, restoration of property, constructive trust, tracing and recovery, and money damages.
• Estate overlay (if principal is deceased): The PR may examine persons holding estate property, recover assets, seek ejectment of occupants, and file civil actions for set-aside and damages.

What the Statutes Say

• N.C. Gen. Stat. § 32C-1-116 (Judicial relief re: POAs) – Allows petitions to compel an accounting, determine authority, and limit/terminate an agent’s powers.
• N.C. Gen. Stat. § 32C-1-117 (Agent’s liability and remedies) – Authorizes courts to void acts, restore property or money, impose constructive trusts, and award other relief for breaches.
• N.C. Gen. Stat. § 28A-15-12 (Actions to recover estate property) – Lets a PR (and, in some cases, an interested person) seek recovery of property belonging to the estate.
• N.C. Gen. Stat. § 28A-13-3 (PR powers over estate assets) – Details the PR’s authority, including obtaining possession of real property and ejecting occupants when authorized.

Analysis

Apply the Rule to the Facts: The sibling’s deed of the parent’s real property to themselves is classic self-dealing and is vulnerable unless the POA expressly authorized such gifts or self-transfers. Removing jewelry and furniture and giving them away may be a breach of fiduciary duty and conversion. Because the agent has died, the PR for the parent’s estate can pursue recovery from the agent’s estate or trust, ask the court to void the deed or impose a constructive trust, and seek to eject the occupant if the property should be in the parent’s estate.

Process & Timing

1. Who files: If the parent is deceased, the Personal Representative. If the parent is alive, an interested person (or guardian) may file. Where: Clerk of Superior Court (for POA oversight/accounting) and Superior Court (for damages, deed cancellation). What: Petition for POA relief/accounting; civil complaint for breach of fiduciary duty, constructive trust, and deed set-aside; estate proceeding to recover property. When: Act promptly; some claims can be as short as three years, though time may be tolled while the agent served.
2. Open or continue the estate. The PR inventories assets, files an estate proceeding to examine persons holding estate property, and, if title is disputed, files a Superior Court action to void the deed and restore the real property. Record a notice of lis pendens in the county land records when challenging title.
3. Seek interim protection. Request an accounting, injunctions to prevent further transfers, and, if needed, orders for possession or ejectment through the PR’s authority. Final outcomes can include voiding the deed, restoring property or proceeds, and surcharge for losses.

Exceptions & Pitfalls

• Express gifting/self-dealing authority in the POA can change the analysis; review the document carefully.
• Bona fide purchasers may complicate recovery of real property; courts may shift to money judgments or constructive trusts on proceeds.
• Use the correct forum: the Clerk can order accountings and address authority, but money damages and deed cancellations belong in Superior Court.
• Serve all necessary parties, including the agent’s estate/trust and current occupants; missing parties can delay or derail relief.
• Record a lis pendens when you challenge a deed to protect title during the case.

Talk to a Probate Attorney

If you’re dealing with questionable transfers made under a North Carolina durable POA, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 919-341-7055.

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.