What can be done if someone transferred my parent’s business into their own name while my parent was sick? – North Carolina

Short Answer

North Carolina law allows courts to unwind transfers made when a parent lacked capacity or when an agent under a power of attorney breached fiduciary duties. The Clerk of Superior Court can order an accounting and limit or remove a power of attorney, while the Superior Court can award money damages, restore property, and impose remedies like constructive trusts. If the parent has died, the personal representative can sue to bring the business back into the estate. Act quickly because civil filing deadlines apply.

Understanding the Problem

The narrow issue is: in North Carolina, how can a court undo a transfer of a parent’s business that occurred during illness? The potential actors are an interested family member before death, a court‑appointed guardian if the parent is incapacitated, or a personal representative after death. The relief sought is restoring title or control of the business, stopping further dissipation, and obtaining an accounting. Timing matters because court jurisdiction differs depending on whether the parent is living and because civil deadlines can apply.

Apply the Law

Under North Carolina’s power of attorney law, an agent owes duties of loyalty, care, and record‑keeping. Courts can compel an accounting, limit or remove the agent, void self‑dealing transfers, and order property restored. Claims for money damages and equitable relief such as constructive trusts are brought in Superior Court. After death, a personal representative has authority to pursue recovery for the estate.

Key Requirements

• Fiduciary breach or invalid transfer: Show the transfer happened when the parent lacked capacity, was subject to undue influence, or the agent exceeded authority or acted in self‑interest.
• Proper forum: Use the Clerk of Superior Court for accountings and to address an agent’s authority; use Superior Court for money damages and to set aside or unwind transfers.
• Standing: Before death, an interested person, guardian, or the principal may file; after death, the estate’s personal representative can act.
• Available remedies: Accounting; suspension/removal of the agent; orders restoring property; constructive trust or lien; tracing and recovery of proceeds; and other equitable relief.
• Deadlines: Civil limitation periods apply; some claims may be tolled while a fiduciary relationship is ongoing, but do not rely on tolling.

What the Statutes Say

• North Carolina Gen. Stat. § 32C-1-116 (Judicial relief under power of attorney) – Who may file, and what the Clerk versus Superior Court can decide.
• North Carolina Gen. Stat. § 32C-1-117 (Agent’s liability) – Breach of fiduciary duty by an agent and remedies (restore property, constructive trust, tracing, removal).
• North Carolina Gen. Stat. § 32C-1-114 (Duties of agent) – Core duties, including acting in the principal’s best interest and keeping records.
• North Carolina Gen. Stat. § 28A-13-3 (Powers and duties of personal representative) – Authority to pursue claims and recover property for the estate.

Analysis

Apply the Rule to the Facts: If an agent used a power of attorney to assign the business to themselves during illness, that implicates the agent’s duties and permits court relief—an accounting at the Clerk, and in Superior Court, remedies to void the transfer, restore ownership, and impose a constructive trust. If a non‑agent caregiver procured a transfer while the parent lacked capacity, Superior Court can set it aside based on lack of capacity or undue influence and order the business or its value returned. After death, the personal representative brings these claims for the estate.

Process & Timing

1. Who files: Interested person, guardian, or the principal (if living); after death, the personal representative. Where: Clerk of Superior Court (judicial relief under the power of attorney). What: Verified petition seeking an accounting and to limit, suspend, or remove the agent. When: As soon as the transfer is discovered; clerks often set hearings within weeks, but timing varies by county.
2. Next step: If restoration of property or money damages are needed, file a civil action in Superior Court for breach of fiduciary duty and equitable relief (e.g., constructive trust, tracing, and return of assets). Consider a temporary restraining order to prevent further dissipation. Service and scheduling follow the civil rules; initial hearings for injunctive relief can occur on short notice.
3. Final step: If the parent has died, open an estate with the Clerk of Superior Court and the personal representative files any suits or estate proceedings to recover the business or its value. Expected outcomes are court orders voiding the transfer, restoring title or proceeds, and, if warranted, removing or surcharging the agent.

Exceptions & Pitfalls

• Valid authority or capacity: If the parent had capacity and clearly authorized the transfer (or the power of attorney expressly allowed it), courts may uphold it.
• Wrong forum: Monetary damages and set-aside claims belong in Superior Court; accountings and agent‑authority questions can begin with the Clerk. Mixing forums can slow relief.
• Good‑faith transferees: If the business was later transferred to an unrelated good‑faith purchaser, recovery may focus on proceeds rather than the asset.
• Entity formalities: For an LLC or corporation, include the entity and any necessary members/managers as parties; failing to do so can delay relief.
• Service and notice: Inadequate service or lack of notice can derail emergency orders; follow civil and special‑proceeding rules closely.

Talk to a Probate Attorney

If you’re dealing with a business transfer made during a parent’s illness and need to assess the best way to unwind it under North Carolina law, 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.