If some property is held through a business entity, does it still affect what my child can inherit from the estate? – North Carolina

Short Answer

Yes. In North Carolina, property titled in the name of a business entity (like an LLC or corporation) usually is not a probate asset of the deceased person. Instead, what may pass through the estate is the deceased person’s ownership interest in the entity (such as LLC membership units or corporate shares), and the value of that interest can still affect what a child can inherit.

Whether the child receives anything depends on (1) what the decedent personally owned versus what the entity owned, and (2) any transfer restrictions or buy-sell terms in the entity’s governing documents.

Understanding the Problem

In a North Carolina estate administration, can a minor child inherit when the deceased parent’s assets are held “inside” a business entity, and the probate case was opened by an adult relative without listing the minor as an heir? The decision point is whether the deceased parent owned the property personally (so it should be inventoried and distributed through the estate) or whether the business entity owned the property (so the estate may only include the deceased parent’s ownership interest in that entity). This distinction often controls what the clerk of superior court can supervise in the probate file and what ultimately gets distributed to heirs.

Apply the Law

North Carolina probate generally deals with what the decedent owned at death. If a house, bank account, or vehicle is titled in the name of an LLC or corporation, that asset is typically owned by the entity—not by the individual—so it does not automatically become part of the individual’s probate estate. Instead, the estate may own an intangible interest (membership interest, shares, or a partnership interest). That interest can be inherited, but it may be subject to transfer limits, valuation rules, or mandatory buyout terms in an operating agreement, shareholder agreement, or partnership agreement.

Key Requirements

Correct ownership at death: Determine whether the asset was titled to the decedent individually or titled to an entity (LLC/corporation/partnership). Entity-titled assets usually stay with the entity.
Identify what the estate actually owns: If the entity owns the property, the estate may own the decedent’s interest in the entity (units/shares/partnership interest), not the underlying property itself.
Follow the entity’s governing documents: Operating agreements and buy-sell provisions often control whether heirs receive the interest, receive a payout instead, or receive only economic rights (and not management rights).

What the Statutes Say

N.C. Gen. Stat. § 29-13 (Intestate succession; descent and distribution) – Provides that an intestate estate is distributed to heirs, subject to administration costs and lawful claims.
N.C. Gen. Stat. § 59-76 (Partnership inventory after a partner’s death) – Requires the surviving partner and the personal representative to prepare an inventory of partnership assets and liabilities within a set time.
N.C. Gen. Stat. § 31-39 (Probate necessary to pass title under a will; timing limits) – Addresses when a will is effective to pass title and includes timing rules that can matter if a will surfaces later.

Analysis

Apply the Rule to the Facts: The probate case was opened by an adult relative and did not list the minor child as an heir. If the decedent’s valuable assets were held in an LLC or corporation, the estate file may look “small” because the entity—not the decedent—holds title to the underlying property. Even so, the decedent’s ownership interest in that entity may still be an estate asset that should be identified, valued, and distributed to the proper heirs (which may include the minor child), subject to any transfer restrictions or buyout terms.

Process & Timing

Who files: Typically the personal representative (executor/administrator) handles asset collection and reporting; an interested person may also file requests or objections as allowed by the clerk. Where: The Estates Division of the Clerk of Superior Court in the county where the estate is pending. What: A request to review the estate file and, if needed, a written filing asking the clerk to address omitted heirs and incomplete asset identification (the exact form and procedure can vary by county). When: As early as possible, especially before distributions or a final account is approved.
Entity investigation: Confirm how key assets are titled (individual vs. entity). Then obtain the entity’s governing documents (operating agreement/shareholder agreement/partnership agreement) and confirm the decedent’s percentage interest and any death-triggered buy-sell terms.
Distribution step: Once the estate’s interest is identified and valued, the personal representative should account for it and distribute it (or the buyout proceeds) to the rightful heirs under the will or intestacy rules, with court oversight as required for minors.

Exceptions & Pitfalls

Transfer restrictions and buyouts: Many LLC and closely held business agreements limit transfers at death and require a buyout instead of allowing heirs to step into ownership.
Confusing “entity property” with “estate property”: A building owned by an LLC is not automatically part of the decedent’s probate estate, even if the decedent controlled the LLC. The estate may only own the membership interest.
Omitted-heir problems: If a minor child is not listed, notices may not go to the right person, and the estate may be administered as if fewer heirs exist. That can affect distributions and approvals by the clerk.
Valuation issues: Closely held interests can be difficult to value, and agreements sometimes set a valuation method. Missing the agreement can lead to incorrect accounting and disputes.

Conclusion

In North Carolina, property held in the name of an LLC, corporation, or partnership usually does not pass through the deceased parent’s probate estate as a titled asset; instead, the estate may include the parent’s ownership interest in that entity, which can still be inherited and can still drive what a child receives. The key next step is to identify how assets are titled and ensure the estate file reflects the minor child as an heir before the clerk approves any final account or distribution.

Talk to a Probate Attorney

If a probate case was opened in North Carolina and a minor child was not listed as an heir—especially where assets may be held through an LLC or other business entity—our firm has experienced attorneys who can help clarify what belongs in the estate, what belongs to the entity, and what deadlines may matter. 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.