How are responsibilities divided between a plan administrator and an outside trustee, and does that change where I submit requests or claims for death benefits? – North Carolina

Short Answer

In North Carolina, the plan administrator usually controls the benefit claim process and decides who gets paid under the plan’s terms and beneficiary designation, while an outside trustee manages a separate trust and distributes trust assets under the trust document. The existence of an outside trustee does not automatically change where claims are submitted; most death benefit claims still go to the plan administrator (or the insurance carrier) on the plan’s required forms. A trustee may have separate paperwork to provide to the plan administrator when a trust is named as beneficiary.

Understanding the Problem

When a North Carolina decedent leaves death benefits tied to employment or retirement, confusion often comes from two different roles: (1) the plan administrator who runs the benefit plan, and (2) an outside trustee who runs a trust that may receive the benefits. The decision point is whether a request or claim for death benefits must be submitted to the plan administrator, the outside trustee, or both, and whether naming a trust as beneficiary changes the proper place to send claim paperwork and documentation.

Apply the Law

Under North Carolina practice, death benefits from employment-related plans (such as retirement plans or group life insurance) are typically claimed through the entity that administers the plan (often the employer’s benefits office, the plan’s third-party administrator, or the insurance company). A trust does not administer the plan; it receives and then holds or distributes what the plan pays to it. If a trust is the named beneficiary, the trustee often must supply certain trust documentation to the plan administrator so the plan can pay properly and apply the correct distribution rules.

Key Requirements

Identify who “owns the claim” under the plan: The person or entity listed as beneficiary (or the estate if the estate is the beneficiary, or if no beneficiary survives and the plan pays to legal representatives) generally drives where the claim starts.
Follow the plan’s claim channel and forms: Employment-related death benefits commonly require the plan’s claim form and supporting documents and are submitted to the plan administrator or the insurer, not to the trustee.
Provide trust documentation if a trust is the beneficiary: When a trust is named, the trustee may need to deliver certifications, beneficiary lists, or a copy of the trust instrument to the plan administrator by the plan’s required timelines so the plan can treat the trust correctly for distribution purposes.

What the Statutes Say

N.C. Gen. Stat. § 135-63 (Death before retirement) – For certain State retirement system members, death benefits are paid upon proof satisfactory to the Board of Trustees, typically to the designated beneficiary or otherwise to legal representatives.
N.C. Gen. Stat. § 135-64 (Death after retirement) – Addresses survivor and death benefits after retirement for certain members, including payments to a spouse, designated survivor, designated beneficiary, or legal representatives depending on the benefit and elections.

Analysis

Apply the Rule to the Facts: Without additional facts, two common North Carolina scenarios illustrate the division of responsibility. If a retirement plan or group life policy names an individual beneficiary, the claim normally goes to the plan administrator or insurer with the required death certificate and claim form; a trustee has no role. If the plan names a trust as beneficiary, the trustee still does not receive the claim first; instead, the trustee typically submits trust documentation to the plan administrator so the plan can pay the trust, and only then does the trustee handle distributions under the trust terms.

Process & Timing

Who files: Usually the named beneficiary (or the trustee if a trust is the named beneficiary). Where: The plan administrator identified in the summary plan description, the employer’s benefits office, the plan’s third-party administrator, or the insurance carrier listed on the plan documents (not the Clerk of Superior Court). What: The plan’s claim form, plus typical supporting documents such as a certified death certificate; if the estate is payee, Letters of Administration/Testamentary may be required. When: File as soon as the plan provides claim instructions; some plans impose strict internal deadlines for elections or continuation rights.
Trust documentation step (only if a trust is beneficiary): The trustee gathers the trust instrument and any required certifications or beneficiary information and delivers what the plan requires to the plan administrator. Retirement plans may have hard cutoffs for trust documentation; missing them can change the plan’s distribution treatment.
Payment and administration: The plan administrator/insurer pays the named beneficiary (individual or trust). If paid to a trust, the trustee then administers and distributes under the trust document and keeps trust records.

Exceptions & Pitfalls

Estate vs. beneficiary payee: If the estate is the beneficiary (or the plan defaults to the legal representative), the personal representative may need Letters from the Clerk of Superior Court, and the plan may require different paperwork than for an individual beneficiary.
Missing or outdated beneficiary designations: The plan administrator typically follows the most recent valid beneficiary designation on file; family expectations or will provisions often do not control plan payments.
Sending paperwork to the wrong place: Sending a “claim” to a trustee when the plan requires submission to the plan administrator (or insurer) can delay payment and can cause missed internal plan deadlines.
Incomplete trust package: When a trust is beneficiary of a retirement plan, failing to provide the plan administrator the required trust documentation on time can change how the plan treats beneficiaries for distribution purposes.

Conclusion

In North Carolina, a plan administrator (or the plan’s insurer) normally controls death benefit claims and decides payment under the plan’s terms and beneficiary designation, while an outside trustee only manages and distributes what a trust receives. Naming a trust as beneficiary usually does not change where the claim is submitted; the claim still goes to the plan administrator or insurer, and the trustee provides any required trust documentation to allow payment to the trust. The next step is to request the plan’s written claim instructions and submit the claim to the plan administrator promptly.

Talk to a Probate Attorney

If a death benefit claim is stalled because a plan administrator and an outside trustee are both involved, a probate attorney can help sort out who must submit which documents, what the plan will accept, and what timelines apply. 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.