Can I close the probate case if I’m still waiting on the 1099 to file the estate’s final tax return? – North Carolina

Short Answer

Usually not. In North Carolina, the Clerk of Superior Court typically will not approve a Final Account (and close the estate) unless estate taxes and other required tax obligations have been paid or clearly provided for. If a missing 1099 prevents filing the estate’s final fiduciary income tax return, the safer approach is usually to keep the estate open and request more time from the Clerk while the tax reporting is completed.

Understanding the Problem

In a North Carolina estate administration, can the personal representative close the estate with the Clerk of Superior Court while a year-end tax document (such as a 1099) has not yet arrived and the estate’s final fiduciary income tax return cannot be completed? The issue usually comes up at the same time the personal representative is preparing a proposed final accounting, serving heirs with an objection period, and trying to finish required closing documents so the Clerk can approve the final accounting and discharge the personal representative.

Apply the Law

In North Carolina, an estate generally closes when the personal representative files a Final Account that shows the administration is complete and there is no balance left to administer because all proper payments and distributions have been made. As a practical matter, the Clerk of Superior Court (as probate judge) expects the Final Account to show that debts, administrative expenses, and taxes have been paid or that a concrete, documented provision has been made to pay them. If tax reporting is incomplete because income information is missing, closing can create risk because the estate may later owe additional tax, interest, or penalties and there may be no estate funds left to pay it.

Key Requirements

Final Account is ready: The final accounting must cover the administration period and reflect that estate bills and expenses are finished, with documentation (vouchers) supporting disbursements.
Taxes are paid or provided for: Before the Clerk approves a Final Account, taxes that are due must be paid, and taxes that may become due must be secured or otherwise provided for (for example, by holding back funds or posting security approved by the Clerk).
Notice/objection window (if used): If the personal representative chooses to send a proposed Final Account to heirs/devisees, those recipients generally have 30 days after receipt to object to matters shown in the accounting.

What the Statutes Say

N.C. Gen. Stat. § 105-240 (Tax upon settlement of fiduciary’s account) – A probate court should not allow a fiduciary’s final account unless taxes that have become payable are paid and taxes that may become due are secured.
N.C. Gen. Stat. § 105-160.5 (Returns) – A fiduciary of an estate that has taxable income and must file under federal law must file a North Carolina fiduciary income tax return.

Analysis

Apply the Rule to the Facts: Here, the executor is preparing a proposed Final Account and an objection period for heirs while also waiting on a 1099 needed to prepare the estate’s final fiduciary income tax return. Because the Final Account is supposed to be filed only after taxes are paid or clearly provided for, the missing 1099 is a red flag: it suggests the tax amount may not be “definitely ascertained,” and the estate may need to stay open (or at least hold back enough funds) until the tax filing can be completed. If the executor closes and distributes everything and then the 1099 arrives showing additional taxable income, the executor may have to “re-open” practical administration issues or seek reimbursements from heirs, which is harder when there is already conflict.

Process & Timing

Who files: The personal representative (executor/administrator). Where: The Estates Division of the Clerk of Superior Court in the county where the estate is being administered. What: A proposed Final Account (often shared with heirs first), supporting schedules/exhibits, and later the filed Final Account with required vouchers and distribution documentation. When: If the personal representative chooses to serve a proposed Final Account on heirs/devisees, a 30-day objection period typically runs from receipt of that notice.
Address the missing 1099 before closing: The usual approaches are (a) delay closing until the 1099 arrives and the estate’s tax reporting can be finalized, or (b) make a documented provision for taxes (for example, holding back a reserve) and confirm the Clerk’s expectations before filing the Final Account.
Ask for more time if needed: If the estate cannot be finalized on the normal timeline, the personal representative can petition the Clerk for an extension of time to administer the estate and file the Final Account. Local practice varies by county, but Clerks commonly grant reasonable requests when tax documents or other closing items are pending.

Exceptions & Pitfalls

“Closing” the estate versus finishing tax work: Filing a Final Account and being discharged by the Clerk is different from simply wanting distributions to happen. Closing too early can leave no estate funds to pay a later tax bill tied to a late 1099.
Not reserving for taxes: Even when the personal representative believes the estate will owe little or no additional tax, a late 1099 can change the numbers. A written plan for how taxes will be paid (and proof funds exist) matters when asking the Clerk to approve closing.
Heir disputes increase the risk of “pay now, fight later”: When heirs are disputing administration, it is harder to get receipts/releases and harder to collect money back from heirs if an unexpected tax bill arrives after distribution.
Settlement documents not finalized: If a mediated settlement requires a commission waiver, and the waiver has not been delivered or signed, the Final Account may not match the settlement terms. The Clerk may require clean paperwork and consistent accounting before approval.
Real estate paperwork problems: If a deed required by the settlement was rejected for errors, the estate may still have unfinished administration tasks. Those unfinished tasks often support keeping the estate open (or seeking an extension) rather than trying to close early.

Conclusion

In North Carolina, an estate typically should not be closed with a Final Account until estate obligations—especially taxes—are paid or clearly provided for, because the Clerk of Superior Court generally expects the Final Account to reflect a completed administration with no unresolved liabilities. When a missing 1099 prevents completing the estate’s final fiduciary income tax return, the safer path is usually to keep the estate open and file a petition with the Clerk for an extension of time to administer the estate and file the Final Account while waiting on the tax document.

Talk to a Probate Attorney

If a North Carolina estate cannot be closed because tax documents are missing, heirs are disputing the accounting, or settlement paperwork is incomplete, a probate attorney can help map out a closing plan that the Clerk will accept and that reduces the risk of personal liability. 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.