Dec282025
Probate Q&A Series

How do I unwind transfers the neighbor made using a power of attorney and recover property for the estate? – North Carolina

Short Answer

In North Carolina, transfers made under a power of attorney can often be unwound if the agent exceeded the authority granted in the document or breached fiduciary duties by using the principal’s property for the agent’s own benefit. The usual tools include a Chapter 32C court proceeding to compel an accounting and seek remedies like return of property, tracing, and a constructive trust, and an estate recovery proceeding or civil action by the personal representative to pull assets back into the estate. Acting quickly matters, especially if probate is moving forward and assets are being distributed.

Understanding the Problem

In North Carolina probate, the core issue is whether an agent acting under a power of attorney can transfer a dying person’s property to a neighbor (or to the neighbor’s benefit) and then claim those assets are no longer part of the estate. The decision point is whether the transfers were valid exercises of the agent’s authority and fiduciary duties, or whether the transfers can be challenged and pulled back for estate administration. Timing often turns on when the power of attorney was used, whether probate has opened, and whether estate assets are already being moved or distributed by the personal representative under the supervision of the Clerk of Superior Court.

Apply the Law

North Carolina treats a power of attorney agent as a fiduciary. That means the agent must act in good faith and in the principal’s best interest, within the authority actually granted in the power of attorney document. When an agent makes transfers that benefit the agent (such as deeds, beneficiary changes, or large gifts), courts closely examine whether the power of attorney clearly authorized those actions and whether the agent’s conduct fits fiduciary standards. If not, North Carolina law allows court-ordered remedies designed to restore property, trace proceeds, and protect estate administration.

Key Requirements

  • Standing and proper party: The challenge usually must be brought by the principal (if living), a court-appointed fiduciary, or the estate’s personal representative after death. In practice, pulling property back for the estate often requires action by (or against) the personal representative.
  • Authority problem: The transfer must be outside the agent’s authority (for example, a “gift” or self-benefiting transfer without clear authorization) or otherwise improper under the power of attorney terms.
  • Fiduciary breach and remedy link: The facts must support that the agent used a position of trust to make a transaction that benefited the agent and harmed the principal/estate, supporting remedies such as return of property, tracing of proceeds, surcharge, or a constructive trust.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts describe a pattern where earlier estate planning named a long-time friend as agent and beneficiary, then a neighbor obtained new documents shortly before death and used a recorded power of attorney to take control of assets. That fact pattern commonly raises (1) whether the transfers were authorized (especially if they benefited the agent), and (2) whether the agent breached fiduciary duties by taking advantage of a relationship of trust during vulnerability. If the neighbor’s claimed “ownership” depends on transfers made under the power of attorney (rather than valid lifetime gifts made directly by the decedent), North Carolina procedures can be used to force disclosure, trace where assets went, and seek orders restoring property to the estate.

Process & Timing

  1. Who files: Typically the estate’s personal representative files recovery proceedings; an interested person may also challenge who should serve and may seek removal/supervision where appropriate. Where: Clerk of Superior Court in the county where the estate is administered. What: A verified petition in the estate file seeking examination and recovery of estate property (often used as a “discovery of assets” tool), and/or a separate civil action in Superior Court for fiduciary breach and equitable remedies if needed. When: As soon as there is reason to believe someone holds estate property; if challenging the will, a caveat must be filed within three years after probate in common form.
  2. Use the Clerk’s estate proceeding to identify and demand property: In a clerk-supervised estate proceeding, the personal representative can ask the Clerk to require a third party believed to hold estate property to appear, be examined, and deliver property if there is no legal basis to keep it. If the dispute is complex or needs broader tools (like injunctions), a party or the Clerk can transfer certain estate matters to Superior Court.
  3. Pursue broader remedies if the property was transferred or spent: If the neighbor transferred assets onward, commingled funds, or the issues turn on fiduciary breach and unwinding transactions, the case often needs a Chapter 32C power-of-attorney proceeding and/or a civil action seeking accounting, tracing, and equitable relief such as a constructive trust. These paths are also used to address self-benefiting real estate deeds signed by an agent without proper gifting authority.

Exceptions & Pitfalls

  • Not every asset is controlled by the will: Some assets pass outside probate (like survivorship accounts or beneficiary-designated accounts). If the neighbor changed beneficiary designations or survivorship rights using a power of attorney, the correct remedy may be a civil action (often with a request for emergency relief) rather than relying only on a clerk estate proceeding.
  • Authority language matters: Many fights turn on whether the power of attorney expressly allowed gifting or self-benefiting transactions. If the document lacked that authority, the transfer becomes easier to challenge.
  • Forum and transfer issues: The Clerk of Superior Court has original jurisdiction over many estate proceedings, but some claims (like monetary damages for breach of fiduciary duty or fraud) often belong in Superior Court. Choosing the wrong forum can cause delay.
  • Service and out-of-state participation: A caveat and many contested proceedings require formal service under North Carolina civil rules. When parties live out of state, service and scheduling can add time and cost, and missing service requirements can derail the challenge.

Conclusion

In North Carolina, property transfers made by a neighbor using a power of attorney can often be unwound if the agent acted outside the authority granted or breached fiduciary duties by making self-benefiting transfers. Recovery usually requires action through the Clerk of Superior Court estate file and, when needed, a related court proceeding to force an accounting, trace assets, and obtain orders returning property to the estate. A key deadline is the three-year window to file a caveat after probate in common form; the next step is to file the appropriate verified petition with the Clerk of Superior Court where the estate is open.

Talk to a Probate Attorney

If a neighbor used a power of attorney to move assets shortly before death and is now claiming ownership of everything, our firm has experienced attorneys who can help assess the documents, identify the right court process, and protect deadlines. 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.

Category: Probate Q&A Series

Author: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.