Can the estate be closed in probate if the lawyer’s fees are not fully paid yet? – North Carolina

Short Answer

Usually not. In North Carolina, a personal representative generally cannot close a probate estate until estate administration expenses and valid creditor claims are paid (or otherwise properly resolved) and the final account can be approved by the Clerk of Superior Court. If there is not enough cash yet, the estate often stays open while assets are collected or sold, or a claim is handled through an approved alternative procedure.

Understanding the Problem

In a North Carolina probate estate, the personal representative can ask: can probate be closed even though the estate still owes professional fees (such as attorney’s fees) and at least one medical creditor claim? The decision point is whether the estate is truly “ready to close,” meaning the personal representative has finished collecting assets, paying or resolving debts and expenses, and can file a final account that the Clerk of Superior Court can approve.

Apply the Law

North Carolina treats attorney’s fees incurred to administer an estate as an administration expense. Administration expenses are typically paid before most other debts. Probate usually closes only after the personal representative files a final account showing what came into the estate, what was paid out, and what is left to distribute, and the Clerk of Superior Court allows that final account. If a claim is still unpaid, the personal representative generally needs a lawful way to handle it before closing (for example, paying it, compromising it, or using a statutory procedure that treats the claim as satisfied for estate-closing purposes).

Key Requirements

Administration must be complete: Estate assets must be identified, gathered into the estate, and managed through the estate account so the final numbers can be reported.
Debts and expenses must be paid or properly resolved: Valid claims (including professional fees and medical bills) generally must be paid in the correct priority order, or handled through a permitted alternative that the Clerk can accept.
A final account must be allowed by the Clerk: The final account must show the receipts, disbursements, and proposed distributions, and it must satisfy any tax-related requirements that apply before the Clerk will allow it.

What the Statutes Say

N.C. Gen. Stat. § 105-240 (Tax upon settlement of fiduciary’s account) – provides that a final fiduciary account generally cannot be allowed unless applicable taxes that have become payable are paid and taxes that may become due are secured.

Analysis

Apply the Rule to the Facts: Here, there are outstanding professional fees and at least one medical creditor claim, and the plan is to sell a vehicle to raise funds. That usually means the estate is not ready to close because the final account would still show unpaid obligations. If the vehicle sale will create the cash needed to pay administration expenses and valid claims, the estate commonly remains open until the sale closes, the funds clear into the estate account, and the payments (or other approved resolutions) are completed and documented for the final account.

Process & Timing

Who files: the personal representative (executor/administrator). Where: the Clerk of Superior Court (Estates) in the county where the estate is pending in North Carolina. What: a Final Account showing all estate receipts, disbursements (including attorney’s fees and creditor payments), and the proposed distributions. When: commonly after the creditor period has run and administration tasks are complete; the Clerk can extend deadlines when appropriate.
Pay or resolve what is still owed: use estate funds (including proceeds from selling estate property) to pay administration expenses and allowed claims in the proper order, and keep clear backup (invoices, receipts, cancelled checks, settlement letters, and claim documentation).
Close and distribute: once the Clerk allows the final account, the personal representative completes any final distributions shown on the accounting and keeps proof of distribution in the estate file.

Exceptions & Pitfalls

Closing without paying a particular claim may be possible in limited situations: North Carolina law can allow an estate to treat a claim as satisfied for closing purposes if another person assumes the liability and the creditor consents, with the agreement filed with the Clerk. This is fact-specific and should be handled carefully.
Paying beneficiaries too early: distributing to heirs before paying administration expenses and valid claims can create personal representative liability and can force a “claw back” effort later.
Priority mistakes: attorney’s fees for estate administration are typically paid ahead of general unsecured creditors. Medical claims may be general unsecured claims, but some medical-related claims can have special priority or lien issues depending on the creditor and the basis of the claim.
Tax confusion: final income taxes are not the same thing as “estate tax.” Even when no estate tax is due, a final fiduciary accounting can still be delayed if required tax items are not addressed. A tax attorney or CPA should be consulted about final income tax filing obligations and timing.
Documentation gaps: the Clerk can delay approval if the file does not clearly show creditor notice steps, claim handling, and support for fees and disbursements.

For more on the practical closing steps and what the Clerk typically expects, see the final steps to finish probate and get the estate closed and how issues can affect approval in rejecting or delaying a final accounting.

Conclusion

In North Carolina, probate usually cannot be closed while attorney’s fees for estate administration and valid creditor claims remain unpaid, because the personal representative must file a final account that the Clerk of Superior Court can allow. If the estate needs to sell a vehicle to raise cash, the estate commonly stays open until the sale proceeds are deposited, administration expenses and allowed claims are paid (or otherwise properly resolved), and any required tax items are handled. Next step: file the final account with the Clerk only after those payments/resolutions are completed.

Talk to a Probate Attorney

If you’re dealing with closing a North Carolina estate while professional fees or creditor claims are still outstanding, our firm has experienced attorneys who can help explain the priority rules, paperwork, and timelines for getting the final account approved. Call us today at [CONTACT NUMBER].

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.