How are duties and decision-making shared between co-administrators, and what liability could I face? – North Carolina

Short Answer

In North Carolina, co-administrators (joint personal representatives) generally must act together when there are two of them, unless the law allows a specific power to be allocated by a written agreement approved by the Clerk of Superior Court. If one co-administrator does not join in a decision, that co-administrator is usually not liable for the consequences of that decision. Liability can still arise for a co-administrator who mishandles estate property, self-deals, commingles funds, or fails to use ordinary care to prevent a co-administrator’s wrongdoing that could have been prevented.

Understanding the Problem

When two people serve as co-administrators in North Carolina, the key question is how authority is shared: can one co-administrator act alone, or must both co-administrators agree and sign off? A related issue is what happens when co-administrators disagree, especially when one co-administrator lives in a different jurisdiction and cannot easily appear in person for day-to-day tasks. This question focuses on how co-administrators make decisions during estate administration and what personal liability can follow from actions taken (or not taken) while serving in that role.

Apply the Law

In North Carolina, a co-administrator is a personal representative appointed by the Clerk of Superior Court to administer a decedent’s estate. As fiduciaries, co-administrators must handle estate property for the benefit of the estate and the people entitled to it. When there are two co-administrators, North Carolina law generally requires both to perform acts and duties, unless a narrow set of powers is allocated by a written agreement that is filed with and approved by the Clerk of Superior Court. Even with an approved allocation agreement, a co-administrator’s bond and fiduciary obligations generally remain in place, and liability can still attach for misconduct or lack of ordinary care.

Key Requirements

• Joint action is the default: If there are two co-administrators, most estate actions and duties generally require both to act (for example, signing documents or authorizing transactions), unless a permitted allocation agreement applies.
• Limited allocation by written agreement: Co-administrators may allocate certain listed administrative powers (like banking, records, paying bills, settling claims, custody of property, and investment functions) only through a written agreement signed by each co-administrator and filed with and approved by the Clerk of Superior Court.
• Fiduciary liability rules still apply: A co-administrator can be liable for losses caused by mishandling estate assets (such as commingling, self-dealing, or lack of good faith and ordinary care) and may also face liability for a co-administrator’s wrongful acts that could have been prevented with ordinary care.

What the Statutes Say

• N.C. Gen. Stat. § 36F-15 (Fiduciary duty and authority for digital assets) – Confirms that fiduciary duties like care and loyalty apply when a fiduciary manages digital assets, and limits authority to the scope of fiduciary duties.

North Carolina’s core co-administrator decision-making and liability rules are primarily found in Chapter 28A (Decedents’ Estates). Because this article is limited to the materials provided, it describes those Chapter 28A rules in plain English; specific section citations depend on the exact issue (for example, joint action rules, allocation agreements, and personal representative liability provisions).

Analysis

Apply the Rule to the Facts: The facts describe a person considering service as a co-administrator while living outside the jurisdiction where the estate will be administered. Under North Carolina practice, distance often creates friction because two co-administrators typically must act together for many estate decisions, and routine tasks can require signatures, coordinated banking authority, and timely responses to the Clerk of Superior Court. Liability risk increases if one co-administrator is “hands-off” and fails to use ordinary care to monitor the estate administration, especially if problems could have been prevented through reasonable oversight.

Process & Timing

1. Who files: The person seeking appointment (or another interested person) files. Where: The Clerk of Superior Court (Estates) in the North Carolina county where the estate is opened. What: The standard AOC application for letters (commonly used statewide) and any required oath/bond paperwork; if co-administrators want to split certain administrative powers, they also prepare a written allocation agreement for filing and Clerk approval. When: As part of qualifying to serve and before relying on any split of authority for banking, records, payments, or similar tasks.
2. Operating day-to-day: Co-administrators should decide early whether they will (a) act jointly on everything, or (b) use a Clerk-approved written agreement to allocate certain listed powers so routine tasks can move without constant dual signatures. Even with an agreement, co-administrators should set a regular check-in schedule and shared access to records.
3. Closing out liability exposure: Co-administrators typically reduce risk by keeping clean records, avoiding commingling, documenting disagreements in writing when needed, and ensuring that inventories, accountings, and distributions match the estate file and the Clerk’s requirements before closing the estate.

Exceptions & Pitfalls

• Assuming one co-administrator can act alone: With two co-administrators, joint action is the default for most acts and duties. Acting solo without proper authority can create delays, rejected transactions, and potential fiduciary exposure.
• Thinking an allocation agreement eliminates liability: A written allocation agreement can streamline who performs certain tasks, but it generally does not eliminate fiduciary duties or bond exposure. A co-administrator can still face liability for personal wrongdoing or for failing to use ordinary care to prevent avoidable losses caused by a co-administrator.
• Failing to document dissent: When co-administrators disagree, written documentation matters. North Carolina practice recognizes that a co-administrator who does not join in an act is generally not liable for that act, and a co-administrator who is directed by the majority (in estates with more than two personal representatives) should preserve written dissent at or before the time of joining in the act.
• Commingling and informal reimbursements: Using personal accounts for estate funds, paying personal expenses from estate accounts, or “paying back later” creates major risk. Co-administrators should keep estate money separate and maintain receipts and ledgers.
• Digital assets handled casually: Accessing email, cloud storage, or online financial accounts without proper authority can create legal problems. North Carolina law treats digital assets as subject to fiduciary duties and limits access to the scope of the fiduciary role and applicable terms of service.

Conclusion

In North Carolina, co-administrators usually must act together when there are two personal representatives, unless they use a signed written agreement (filed with and approved by the Clerk of Superior Court) to allocate certain listed administrative powers. A co-administrator can face liability for mishandling estate property, self-dealing, commingling, lack of good faith and ordinary care, and for losses caused by a co-administrator’s wrongdoing that could have been prevented with ordinary care. A practical next step is to file a Clerk-approved written allocation agreement at the time of qualification if shared administration will be difficult.

Talk to a Probate Attorney

If serving as a co-administrator raises concerns about shared authority, long-distance coordination, or fiduciary liability, our firm has experienced attorneys who can help explain options and timelines for North Carolina estate administration. 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.