Jan82026
Estate Planning Q&A Series

How do I know whether the trustee is following the trust agreement and handling the trust money correctly? – North Carolina

Short Answer

In North Carolina, the most practical way to check whether a trustee is following the trust agreement and handling trust money correctly is to request clear, written information: what assets the trust owns, what money came in, what money went out, and what is left. If the trustee will not provide reasonable records or explanations, a beneficiary can ask the Clerk of Superior Court to require an accounting and review the trustee’s actions. The trust document controls first, but North Carolina law also expects trustees to keep records and be able to explain trust transactions.

Understanding the Problem

Under North Carolina trust administration, a beneficiary often asks: can a trustee be required to show what the trust owns, what the trustee has spent, and whether those actions match the trust agreement? The key decision point is whether the trustee is providing enough reliable information to confirm that trust money and trust property (such as a trust account and land) are being managed for trust purposes, rather than for the trustee’s personal benefit. This question commonly comes up when a family member serves as trustee and communicates through an attorney.

Apply the Law

In North Carolina, the trust agreement is the starting point because it sets the trustee’s powers, distribution rules, and any reporting requirements. Even when the trust document is brief, trustees are generally expected to administer the trust in good faith, keep trust property identifiable, maintain records, and be able to provide information that allows beneficiaries to understand what happened with trust assets. When voluntary cooperation breaks down, the usual forum for trust administration disputes is the Clerk of Superior Court (estate/trust division) in the county with proper venue.

Key Requirements

  • Transparency and records: The trustee should be able to provide written information showing trust assets, income, expenses, and current balances, supported by records.
  • Trust-first decision making: The trustee’s actions should match the trust’s instructions (for example, when distributions can be made, whether land can be sold or rented, and how expenses are paid).
  • Separation and traceability of trust property: Trust funds and trust property should be held and tracked in a way that clearly identifies them as trust assets, not personal assets of the trustee.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the trust has at least two types of assets: a trust account and land, and a relative is serving as trustee with counsel. A well-run administration should produce a clear picture of (1) the current account balance and activity, (2) what expenses were paid and why, and (3) how the land is being managed (for example, whether it is insured, maintained, rented, or being prepared for sale if the trust allows). If the trustee cannot provide a coherent written summary backed by statements, invoices, and closing documents (if any transactions occurred), that is often the first sign that closer review is needed.

Process & Timing

  1. Who asks first: A beneficiary (or the beneficiary’s attorney). Where: Directly to the trustee (often through the trustee’s attorney). What: A written request for (a) a copy of the trust (or the relevant portions), (b) a current asset list, and (c) an accounting-style summary showing beginning balance, income, expenses, distributions, and ending balance, with supporting documents (bank/brokerage statements, invoices, receipts, and land-related records). When: As soon as concerns arise; the request should give a reasonable deadline to respond.
  2. Review and reconcile: Compare the trustee’s report to the trust’s distribution rules and management powers. For the trust account, reconcile deposits/withdrawals to statements. For land, request documents that show how the property is titled, insured, maintained, and whether any rent or sale proceeds were handled through the trust.
  3. If cooperation fails: A beneficiary can file a proceeding with the Clerk of Superior Court asking the court to require an accounting and address suspected mismanagement. The court can order the trustee to produce records and can review whether actions were proper under the trust and North Carolina law.

Exceptions & Pitfalls

  • The trust may limit what can be shared: Some trusts restrict disclosure or provide different reporting rules for different classes of beneficiaries. The trust document still cannot be used as a blanket excuse to refuse basic, reasonable information needed to understand administration.
  • Informal updates are not an accounting: Verbal explanations, screenshots, or partial statements can hide missing transactions. A usable report usually shows a beginning balance, itemized activity, and an ending balance that matches statements.
  • Land creates unique record issues: Property taxes, insurance, repairs, leases, and sale closing statements should be traceable to the trust. Missing documents or payments made “out of pocket” without clear reimbursement records can create confusion and disputes.
  • Commingling and unclear titling: If trust funds appear mixed with personal funds, or if land is not titled/managed as trust property when it should be, that can be a serious red flag and should be addressed quickly.

Conclusion

In North Carolina, the best way to know whether a trustee is following the trust agreement and handling trust money correctly is to obtain a clear written snapshot of the trust’s assets and transactions, supported by bank statements and property records, and then compare that information to what the trust authorizes. If the trustee will not provide reasonable information or the numbers do not reconcile, the next step is to file a proceeding with the Clerk of Superior Court to require an accounting and court oversight.

Talk to a Estate Planning Attorney

If a trustee is not providing clear records or the trust money and property activity does not make sense, our firm has experienced attorneys who can help explain North Carolina trust administration, request the right documents, and evaluate court options if needed. 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: Estate Planning Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.