Jan262026
Probate Q&A Series

How do I get a bank to release money from a deceased person’s LLC account to the estate? – North Carolina

Short Answer

In North Carolina, a bank usually cannot release money from an account titled in an LLC’s name just because the LLC’s owner died and an estate was opened. The estate typically inherits the deceased person’s membership interest in the LLC, not automatic signing authority over the LLC’s bank account. To get the funds released, the personal representative often must show the bank who has legal authority to act for the LLC after the owner’s death (for example, under the operating agreement) or obtain a court order directing turnover of the funds.

Understanding the Problem

In North Carolina probate, the key question is: when a bank account is titled in the name of a deceased person’s LLC, can the estate’s court-appointed personal representative require the bank to pay those funds to the estate? The issue usually turns on whether the personal representative has authority to act for the LLC (as manager, authorized signer, or winding-up representative) versus authority that only reaches property titled in the decedent’s individual name. Timing matters because the estate administration may be underway or even near closing when the LLC account is discovered.

Apply the Law

North Carolina generally treats an LLC as a separate legal person from its owner. That separation is why banks often refuse to treat “letters testamentary/letters of administration” as enough to access an LLC account. The estate may own the deceased member’s LLC interest, but the bank still needs proof of who can sign for the LLC or proof that a court has ordered the funds turned over as estate property or as part of winding up the LLC’s affairs.

Key Requirements

  • Confirm what the estate actually owns: The estate usually steps into the decedent’s ownership interest in the LLC, not automatic control of the LLC’s bank account.
  • Identify who has authority to act for the LLC: The operating agreement (or other company records) may name a manager, successor manager, or a process for appointing someone to act after a member’s death.
  • Use the correct court process if the bank still refuses: If voluntary compliance fails, the personal representative may need a clerk/superior court order in the estate file or a related civil action to compel delivery of property believed to belong to the estate.

What the Statutes Say

Note: North Carolina’s LLC rules are primarily in Chapter 57D, and the operating agreement often controls what happens when a member dies. Because banks vary in what they require, the exact statute or document that resolves the issue depends on how the LLC was structured (member-managed vs. manager-managed) and what the operating agreement says.

Analysis

Apply the Rule to the Facts: Here, probate was handled and later an account titled in the decedent’s LLC was discovered. That title is the bank’s main reason for refusing to release funds based only on estate paperwork: the bank sees the LLC (not the individual) as the customer. The practical path is to (1) prove who can act for the LLC after the owner’s death under the operating agreement/company records, or (2) ask the Clerk of Superior Court for an order in the estate proceeding that specifically authorizes action to obtain or recover the funds, and then present that order to the bank.

Process & Timing

  1. Who files: The estate’s personal representative. Where: The Clerk of Superior Court in the county where the estate is administered. What: A written request/petition in the estate file seeking authority to obtain the LLC funds (or an order directing turnover), supported by documentation showing the account is tied to the decedent’s LLC and why the funds should be collected for administration. When: As soon as the account is discovered, and before the estate is closed (if the estate is already closed, reopening may be needed).
  2. Bank-facing documentation step: Provide the bank with (a) certified letters, (b) death certificate, (c) the LLC’s operating agreement and any amendments, (d) documentation showing who is the manager/authorized signer after death (or a member consent/resolution if applicable), and (e) any court order obtained in the estate file that specifically addresses the LLC account.
  3. Escalation if refusal continues: If the bank still will not release funds, the personal representative may need a contested estate proceeding or a related civil action to compel delivery of property, depending on the bank’s position (for example, “we need a court order” versus “we dispute authority”). The end result is typically a signed court order that the bank can rely on to release funds without fear of liability.

Exceptions & Pitfalls

  • Operating agreement controls: Many LLC operating agreements restrict transfers, require a successor manager, or require member consent before anyone can access company funds. If the operating agreement is missing, the bank may demand more court involvement.
  • “Estate owns the LLC” is not the same as “estate can sign”: Even if the decedent was the only member, the bank may still require proof of who is authorized to act for the LLC (or a court order) because the LLC remains a separate entity.
  • Winding up vs. distributing: If the LLC must be wound up, the funds may need to be used to pay LLC obligations first, with only the remaining value ultimately flowing to the estate as the owner’s interest.
  • Paperwork mismatch: A common problem is presenting only letters testamentary/administration without providing LLC documents (operating agreement, articles, EIN confirmation, bank signature card history, or a company resolution). Banks often treat that as incomplete authority.

Conclusion

In North Carolina, a bank usually will not release funds from an account titled in an LLC’s name based solely on estate letters, because the LLC is a separate legal entity. The estate generally inherits the decedent’s LLC ownership interest, and the bank typically needs proof of who has authority to act for the LLC after death or a court order directing turnover. The most practical next step is to file a request with the Clerk of Superior Court in the estate file for an order authorizing collection of the LLC account funds before the estate is closed.

Talk to a Probate Attorney

If a bank is refusing to release funds from a deceased person’s LLC account and keeps asking for “additional court authorization,” a probate attorney can help identify the right authority documents, coordinate with the LLC records, and pursue a court order 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: 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.