Who is responsible for taxes, insurance, and upkeep on an inherited house during probate? – North Carolina

Short Answer

In North Carolina, once a person dies, title to the decedent’s real estate generally passes right away to the heirs (if there is no will) or to the devisees named in the will, even though the estate is still in probate. Because of that, the heirs or devisees are typically responsible for ongoing costs tied to the house after the date of death, including property taxes, insurance, and routine upkeep.

However, if the personal representative takes “possession, custody, and control” of the property because it helps administer the estate, then the personal representative may need to manage the property and may pay certain expenses from estate funds when appropriate, keeping careful records for the probate accounting.

Understanding the Problem

In North Carolina probate, when a personal representative is administering an estate and the main asset is a house, a common question is: who must keep paying the property taxes, hazard insurance, and ongoing maintenance while the probate case is open. The decision point is whether the house remains in the hands of the heirs or devisees as the new owners, or whether the personal representative takes control of the house as part of administering the estate.

Apply the Law

North Carolina treats real estate differently from many other assets. Even during probate, ownership of the decedent’s real property generally vests in the heirs (intestacy) or devisees (under a will) as of the date of death. Even so, a personal representative has legal authority to step in and take possession, custody, and control of the real estate when the personal representative decides that doing so is in the estate’s best interest, such as to protect the property, arrange insurance, or prepare for a sale or other transfer needed for administration.

Separately, North Carolina law also imposes a duty on fiduciaries who have care or control of property to pay property taxes from funds available in their hands, and it can impose personal liability if taxes are not paid when funds are available. In practice, this means the “who pays” question depends heavily on who has control and what funds exist to pay the bills.

Key Requirements

Who owns the house after death: In most estates, heirs or devisees become the owners of the real estate as of the date of death, even though probate is open.
Who has possession and control during administration: The personal representative can take possession, custody, and control of the real estate when doing so helps the estate administration.
Good recordkeeping and proper accounting: A personal representative must keep detailed records and be able to support expenses claimed as estate administration expenses or reimbursements.

What the Statutes Say

N.C. Gen. Stat. § 105-383 (Fiduciaries to pay taxes) – Requires fiduciaries with care or control of property to pay property taxes from funds in hand and allows personal liability if taxes go unpaid when funds were available.

Analysis

Apply the Rule to the Facts: The estate’s main asset is a house and a notice to creditors has been published with no claims reported so far. Under North Carolina’s general real estate rule, the heirs or devisees usually bear the ongoing post-death carrying costs of the house (taxes, insurance, and upkeep) because ownership vests in them as of the date of death. If the personal representative has been actively managing the property (for example, securing it, arranging insurance, coordinating repairs, or preparing for sale), the personal representative may be acting under the authority to take custody and control, which can support paying necessary expenses from appropriate funds and later accounting for them.

Process & Timing

Who files: The personal representative. Where: The Clerk of Superior Court (Estates Division) in the county where the estate is administered. What: The estate accounting(s) and supporting documentation showing receipts, disbursements, and proposed distributions. When: As required by the estate’s accounting schedule and when seeking approval to close the estate; timing can vary by county and case posture.
Track house expenses while probate is open: Identify each house-related bill (taxes, insurance premiums, utilities if any, lawn care/repairs, travel directly tied to property tasks). Then categorize each item as (a) a house cost that heirs/devisees should cover as owners, or (b) an administration expense paid because the personal representative took control to protect or administer the property.
Request reimbursement the right way: If the personal representative advanced funds, the usual path is to document each expenditure (date, payee, purpose, amount, method of payment) and show it in the estate accounting as a reimbursement request, rather than relying only on informal agreements. Written consent from heirs can help reduce disputes, but the accounting still needs clear backup.

Exceptions & Pitfalls

Control can shift responsibility: When heirs/devisees take possession and control, they typically handle taxes/insurance/upkeep. When the personal representative takes custody and control for administration, the personal representative must manage the property prudently and keep it from avoidable loss.
Cash payments without receipts: Probate accounting requires support. Paying in cash without receipts commonly leads to reimbursement disputes, disallowance in an accounting, or delays in closing the estate. A contemporaneous log plus alternative proof (invoices, bank withdrawals tied to the payment, written confirmation from the vendor) can reduce problems.
Mixing roles and money: A personal representative should avoid commingling personal funds and estate funds and should use an estate account when paying ongoing bills, with clear memo lines and documentation for each disbursement.
Insurance gaps: Even if heirs/devisees are technically responsible, an uninsured loss can create conflict. Confirm that the house has appropriate coverage during vacancy and during any listing/sale period, and confirm who is the named insured and who pays the premium.

Conclusion

In North Carolina, ongoing costs for an inherited house during probate usually fall on the heirs or devisees because title to real estate generally vests in them as of the date of death. If the personal representative takes possession, custody, and control of the property to administer the estate, the personal representative must manage it prudently and may need to ensure bills like property taxes are paid when funds are available. The next step is to itemize and document all house-related payments and submit them through the estate accounting filed with the Clerk of Superior Court.

Talk to a Probate Attorney

If a North Carolina estate includes a house and there is confusion about who should pay the taxes, insurance, and upkeep during probate (and whether the personal representative can be reimbursed), our firm has experienced attorneys who can help explain the options, documentation, 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.