How do I get a full accounting of trust funds and prove money is missing or being misused? – North Carolina

Short Answer

In North Carolina, a trustee generally must keep trust records and provide beneficiaries with enough information to understand what the trustee did with trust property. If voluntary requests do not work, a beneficiary (or other proper party) can file a trust proceeding to compel an accounting and, in the right case, ask the court to restrict transactions while the records are gathered. “Proving money is missing” usually means building a paper trail (statements, deeds, transfers, checks) and then using court-ordered accounting and discovery to trace where assets went and whether the trustee’s actions violated fiduciary duties.

Understanding the Problem

Under North Carolina probate and trust law, the central question is how a beneficiary (or someone with a legally recognized interest) can force transparency when a trustee controls an irrevocable family trust and there are concerns that trust funds were diverted, spent for improper purposes, or transferred to the wrong person. The decision point is whether the trustee will voluntarily provide complete trust information and a clear accounting, or whether a court proceeding is needed to compel an accounting and preserve assets while the trustee’s actions are reviewed.

Apply the Law

North Carolina treats a trustee as a fiduciary. That means the trustee must act in good faith, keep adequate records, and provide information that allows beneficiaries to protect their interests. If the trustee refuses, provides partial information, or the numbers do not reconcile, North Carolina law allows a court to order an accounting and other relief designed to protect the trust and correct misuse. Many “internal affairs” trust disputes (including compelling an accounting and removing a trustee) are commonly started as a trust proceeding before the Clerk of Superior Court, but claims seeking money damages may require filing in Superior Court.

As a practical matter, “a full accounting” is more than a summary. It usually includes (1) what the trust owned at the start of the period, (2) every dollar in and out, (3) what the trust owns now, and (4) backup documents that prove the entries (bank/brokerage statements, closing statements, invoices, canceled checks, deeds, and tax documents). When the concern is missing money, the goal is to reconcile the accounting to third-party records and identify unexplained transfers, self-dealing, commingling, or spending outside the trust’s terms.

Key Requirements

Standing (the right person must ask): The request typically must come from a qualified beneficiary or another person the law recognizes as having an interest that the court can protect.
A clear demand for information: A written request should identify the trust, the time period, and the specific records needed (statements, ledgers, receipts, deeds, and a transaction-by-transaction accounting).
A court pathway if the trustee will not comply: If the trustee refuses or stonewalls, a trust proceeding can ask the Clerk of Superior Court to order an accounting and other appropriate relief; if broader relief is needed (including certain damages claims), a related Superior Court case may be required.

What the Statutes Say

N.C. Gen. Stat. § 32-57 (Judicial review; refunds of excessive compensation/expenses) – allows a qualified beneficiary to seek review of trustee compensation/expense reimbursement and authorizes the clerk to order refunds if amounts were excessive.
N.C. Gen. Stat. § 23-22 (Court may remove trustee and appoint successor) – recognizes court authority to remove a trustee and fill a vacancy with a successor trustee.

Analysis

Apply the Rule to the Facts: The facts describe concerns about an irrevocable family trust created when a parent may have had cognitive decline, along with allegations of isolation, interference, and significant financial misconduct involving trust or estate assets. Those facts make the “information and accountability” issue urgent: confirming who the beneficiaries are, identifying what assets are supposed to be in the trust, and requiring the trustee to show (with documents) where the money went. If the trustee cannot reconcile trust assets to third-party records, or if transfers appear to benefit the trustee or an influencer, that mismatch is often the starting point for proving misuse and requesting court intervention.

Process & Timing

Who files: Typically a qualified beneficiary (or a legally appointed representative such as a guardian) files. Where: often with the Clerk of Superior Court in the county tied to the trust’s administration or where the trustee is acting (county practice can vary). What: a petition/trust proceeding asking to compel an accounting and related relief (and, when warranted, a request for emergency restrictions on transactions). When: as soon as there are red flags and the trustee will not provide complete records; waiting can make tracing harder if assets move again.
Build the paper trail: Gather what is already available (prior statements, deeds, beneficiary communications, screenshots of account activity, caregiver or facility billing records, and any trust summaries). Then compare what the trustee claims to what third-party records show. If the trustee refuses to produce records, the case may need discovery tools (subpoenas to banks/brokerages and document requests) to obtain independent proof.
Use the accounting to identify “missing money” patterns: Common proof points include unexplained withdrawals, checks to “cash,” transfers to accounts not titled in the trust, sales of trust property without clear proceeds returning to the trust, commingling trust funds with personal funds, or payments that do not match any trust purpose. If the court finds a breach, remedies can include ordering a corrected accounting, restricting future conduct, appointing a neutral fiduciary, reducing compensation, or removing the trustee.

Exceptions & Pitfalls

“No accounting required” language is not always the end of the story: Some trusts try to limit reporting, but North Carolina courts can still require information needed to enforce beneficiary rights, especially when misconduct is alleged.
Clerk vs. Superior Court limits: Some trust matters (like compelling an accounting and removing a trustee) are commonly handled in a trust proceeding before the clerk, while certain claims for money damages may require a separate Superior Court action. Filing in the wrong forum can delay relief.
Incomplete requests lead to incomplete results: A demand that asks only for a “summary” can produce a summary that hides the problem. A strong request asks for a transaction-level accounting plus backup documents and identifies the exact time period.
Asset-freeze requests require focused proof: Courts generally want specific facts showing a real risk that assets will be moved or dissipated. Vague suspicion without a paper trail can make emergency relief harder to obtain.
Beneficiary identity and trust terms must be confirmed: Before challenging transactions, it is important to confirm who the qualified beneficiaries are and what the trust authorizes (distributions, trustee powers, and any waivers or special provisions).

Related reading on this topic includes how to remove a trustee and ask the court to freeze trust assets and whether a person can challenge the trustee’s actions or ask the court to replace the trustee.

Conclusion

In North Carolina, a trustee must keep trust records and provide enough information for beneficiaries to understand trust administration, and a court can compel an accounting when voluntary disclosure fails. Proving missing or misused trust money usually means reconciling a transaction-by-transaction accounting to independent third-party records and identifying unexplained transfers, commingling, or self-interested transactions. The most practical next step is to file a trust proceeding with the Clerk of Superior Court to compel a full accounting and request immediate protective relief if there is a credible risk of further dissipation.

Talk to a Probate Attorney

If there are concerns about missing trust funds, incomplete records, or a trustee refusing to be transparent, our firm has experienced attorneys who can help evaluate options for compelling an accounting and protecting assets under North Carolina law. 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.