Dec302025
Probate Q&A Series

Can I recover legal fees from the estate or asset when challenging a beneficiary designation? – North Carolina

Short Answer

Sometimes, but not automatically. In North Carolina, attorney’s fees are usually not shifted unless a statute (or a court order in a qualifying estate/trust proceeding) allows it. Fee recovery is more likely when a personal representative brings a court proceeding to resolve who should receive property or to recover property for the estate, or when the other side litigates without any real legal or factual basis. When an individual beneficiary brings the challenge in a personal capacity, fee recovery is harder and often depends on the specific claim and forum.

Understanding the Problem

In North Carolina probate disputes, a common question is whether attorney’s fees can be paid from the estate or from the disputed asset when a person challenges a beneficiary designation on an account that passes outside the will. The decision point is whether the challenge is being brought in a way that the law treats as protecting the estate as a whole (or a trust/fiduciary relationship), versus a dispute that mainly benefits one claimant. Timing and forum matter because some fee rules apply in estate proceedings before the Clerk of Superior Court, while others apply in a civil case in Superior Court.

Apply the Law

North Carolina generally follows the rule that each side pays its own attorney’s fees unless a statute authorizes a fee award. In estate and fiduciary matters, there are several pathways that can allow fees to be charged to the estate/fund or shifted to a party, but the court (or Clerk of Superior Court, depending on the proceeding) usually has discretion and will look closely at who brought the case, why it was brought, and who benefited from it.

Key Requirements

  • Statutory authority or court power to tax fees/costs: Attorney’s fees are not automatic; a statute must allow them, or the case must fit within a category where the court can treat fees as “costs” or otherwise order payment from an estate or fund.
  • Proper party and purpose (estate-wide benefit vs. personal benefit): Fees are more likely to be paid from estate assets when a fiduciary (like a personal representative) brings a neutral proceeding to determine the proper recipient or to recover property for the estate, rather than a beneficiary suing only to increase an individual share.
  • Good faith and a real dispute: Courts can deny fees (or even shift fees the other way) if a party acts in bad faith, mismanages the case, or litigates without a real legal or factual issue.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts describe a dispute over a changed beneficiary designation on a large investment account shortly before death, with concerns about confusion and vulnerability. If the challenge is framed and filed as an estate-focused proceeding (for example, a personal representative seeking a court determination or recovery of property for the estate), the law more often allows fees and costs to be charged to the estate or fund, subject to court discretion and good-faith litigation. If the challenge is filed by the originally named beneficiary in an individual capacity to redirect the account to that beneficiary, fee recovery from the estate or account is less predictable and often depends on whether a statute permits fee shifting (including whether the opposing party’s position lacked any justiciable issue).

Process & Timing

  1. Who files: Often the personal representative (executor/administrator) if the goal is to treat the asset as recoverable for the estate or to obtain a binding determination; sometimes an interested person files a civil action depending on the theory. Where: The Clerk of Superior Court for an estate proceeding under Chapter 28A, or Superior Court for a civil action (and some matters can be moved/transferred depending on issues raised). What: A verified petition in an estate proceeding when required by the procedure used, or a civil complaint stating the legal basis for setting aside the beneficiary change. When: As early as possible after death and before the funds move or get spent; timing can also matter for requesting temporary court orders to preserve disputed funds in a civil case.
  2. Fee request: A request for attorney’s fees is typically made by motion (or included as a claim for relief) and must tie to a statute or a recognized basis for taxing fees/costs in the specific type of proceeding. Courts usually require evidence of reasonableness (time, rates, work performed) and may require findings to support an award.
  3. Order and payment source: If the court/clerk allows fees, the order should specify whether fees are charged to the estate/fund, apportioned among parties, or shifted to a party based on conduct (including bad faith or lack of a justiciable issue). Payment typically occurs through the estate administration process or as directed in the judgment.

Exceptions & Pitfalls

  • “Winner gets fees” is not the default: Even if the challenge succeeds, North Carolina does not automatically make the losing side pay attorney’s fees. A fee request must match a statute or a recognized basis for charging fees to an estate/fund.
  • Wrong plaintiff can reduce fee options: When a personal representative brings a neutral proceeding to resolve beneficiary questions or recover property for the estate, courts more often treat fees as an estate administration expense. When an individual claimant brings the case mainly for personal benefit, courts are less likely to charge fees to the estate.
  • Nonjusticiable-issue fee awards cut both ways: If one side litigates with a complete absence of a justiciable issue, the prevailing party may seek fees under N.C. Gen. Stat. § 6-21.5. But a party who overreaches or files weak claims can face the same risk.
  • Forum and remedy mismatch: Some estate procedures are designed to be simpler but may not provide strong tools to freeze or preserve liquid assets. In cases where funds could move quickly, a civil action may be needed to request temporary court orders—while still keeping an eye on how that choice affects fee recovery.
  • Bad faith and mismanagement can shift costs personally: When a fiduciary litigates in bad faith or mismanages the action, the court can direct costs away from the estate and onto the individual fiduciary under the rules governing fiduciary litigation costs.

Conclusion

In North Carolina, recovering attorney’s fees when challenging a beneficiary designation is possible in limited situations, but it is not automatic. Fees are most often paid from the estate or fund when a personal representative brings a good-faith proceeding to resolve beneficiary rights or recover property for the estate, and the court approves the fees as part of the case. A practical next step is to evaluate whether the claim should be filed as an estate proceeding before the Clerk of Superior Court or as a civil action in Superior Court, and to plead any fee basis from the start.

Talk to a Probate Attorney

If a beneficiary designation was changed shortly before death and attorney’s fees are a concern, our firm has experienced attorneys who can help explain options, likely forums, and timelines for requesting fees or preserving disputed assets. 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.