Jan242026
Probate Q&A Series

Can I refuse to sign prior-year joint tax returns until I know whether the estate has enough assets to pay the taxes and penalties? – North Carolina

Short Answer

In North Carolina, a former spouse generally can decline to sign a prior-year joint return if signing would create personal exposure for taxes, interest, and penalties and there is no clear plan for payment or reimbursement. But refusing to sign can also create problems if a court order or marital settlement agreement requires cooperation, because the estate (through the personal representative) may try to enforce that obligation as part of probate. A practical approach is often to request estate financial information and written protections (like an indemnity or escrow) before deciding whether to sign.

Understanding the Problem

Under North Carolina probate practice, the key question is whether a former spouse can withhold a signature on prior-year joint income tax returns when the other spouse has died and the estate’s ability to pay any resulting tax, interest, and penalties is unclear. The decision point is whether signing the joint returns would create a risk of personal liability that cannot realistically be covered by the estate, even though a marital settlement agreement may require cooperation on filing. The role that usually controls the estate’s response is the personal representative, who gathers assets, pays valid debts, and closes the estate through the clerk of superior court.

Apply the Law

North Carolina law expects the personal representative to identify estate obligations and pay them from estate assets before final distribution, including tax-related obligations that must be addressed before the estate can close. At the same time, signing a joint income tax return is a separate act that can expose the signer to collection risk under federal tax rules, so it is common in practice to ask for information and protections before signing. If the marital settlement agreement created a duty to cooperate, the estate may treat that as a claim or enforcement issue that must be handled during administration.

Key Requirements

  • Real risk assessment before signing: A joint return can shift risk to the signer if the tax is not paid, so the decision often turns on whether there is a reliable payment plan and documentation.
  • Estate administration controls payment: The personal representative is the person who marshals assets, evaluates claims, and pays taxes and other debts before closing the estate.
  • Clear protections if cooperation is required: If a prior agreement requires cooperation, the safest path is usually cooperation paired with written protections (for example, reimbursement terms, escrow, or proof of estate liquidity) rather than an open-ended signature.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the marital settlement agreement reportedly requires cooperation on filing prior-year joint returns, but signing a joint return can create personal exposure if the tax is not paid. Because the former spouse has died, payment typically must come from estate assets controlled by the personal representative, and the estate must address taxes before it can close out administration. If the estate may be insolvent (or if the personal representative cannot confirm funds are available), withholding a signature until receiving financial information and written protections is often a reasonable way to manage the risk while still engaging in “cooperation” in a practical sense.

Process & Timing

  1. Who files: The personal representative typically handles the decedent’s tax-related administration and communicates with accountants/return preparers. Where: Estate administration is overseen by the clerk of superior court in the county of administration in North Carolina. What: A written request for estate information (inventory/estate accountings if available, and the plan for paying any tax due) and a proposed written agreement addressing reimbursement/indemnity and payment logistics. When: Before signing any joint return, and early enough to avoid tax filing/payment deadlines.
  2. Information step: The personal representative should be asked to confirm what returns are missing, whether the returns will show a balance due or a refund, and whether the estate has liquid assets to pay. In many estates, the personal representative also needs to handle refund logistics and allocation issues when refunds are payable on joint returns.
  3. Protection step: If cooperation is required, the parties often resolve the signature issue by documenting how any balance due will be paid (for example, payment directly from an estate account, an escrow funded before filing, or a written reimbursement/indemnity obligation approved as part of the estate administration).

Exceptions & Pitfalls

  • Contract enforcement risk: If the marital settlement agreement is enforceable and clearly requires cooperation, an outright refusal to sign (without offering a reasonable, documented path to cooperation) can trigger an estate enforcement effort in the clerk-supervised estate proceeding or another appropriate court process.
  • Refund vs. balance-due mismatch: A prior-year return might produce a refund rather than tax due. In that situation, refusing to sign can delay money that may be allocated between the estate and the surviving/former spouse under North Carolina rules that address certain refund ownership and allocation issues.
  • Signing without protections: Signing first and “sorting it out later” can be risky if the estate turns out to be insolvent, if assets are illiquid, or if higher-priority estate expenses consume available cash before taxes are paid.
  • Incomplete information from the preparer: Signing a return without reviewing the draft return, supporting schedules, and how income/deductions were allocated can create avoidable disputes and exposure.

Conclusion

In North Carolina, it is often reasonable to hold off on signing prior-year joint tax returns until the personal representative provides enough information to confirm how any tax, interest, and penalties will be paid and whether the estate has funds to cover them. The estate generally must address taxes before it can close, and the safest next step is to request a written payment plan and protections (such as an indemnity or escrow) from the personal representative before signing.

Talk to a Probate Attorney

If a former spouse’s estate is asking for a signature on prior-year joint tax returns and there is concern about who will pay any taxes, interest, and penalties, our firm has experienced attorneys who can help explain options and timelines and coordinate with the personal representative. 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.

Category: Probate 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.