As a co-trustee or co-executor, am I personally responsible for acting as the landlord for inherited rental properties? – North Carolina

Short Answer

Usually not in a personal, individual-capacity sense. In North Carolina, a co-executor (personal representative) or co-trustee may need to make sure the rental properties are managed, rent is collected, and the properties are protected, but those actions are taken on behalf of the estate or trust—not as a personal landlord. Personal liability most often comes from signing documents in an individual capacity, mishandling money, or failing to use reasonable care in managing the assets.

Understanding the Problem

In North Carolina probate and trust administration, the key question is whether a co-executor or co-trustee must personally step into the day-to-day “landlord” role for inherited rental real estate, including handling tenants, repairs, rent collection, and lease decisions. The decision point is whether the fiduciary role requires direct personal involvement versus arranging management through proper estate/trust channels while keeping liability and paperwork in the estate/trust name. This issue commonly comes up when an estate or trust includes rental property and there are multiple fiduciaries or family members involved.

Apply the Law

Under North Carolina law, a personal representative’s core job is to locate and protect estate assets, pay valid debts and expenses, and distribute what remains to the proper people. A trustee’s job is to manage trust property for the beneficiaries under the trust terms and fiduciary standards. Rental real estate can be managed as an estate/trust asset, and fiduciaries can hire agents (like a property manager) and pay reasonable expenses from estate/trust funds when appropriate. A fiduciary is generally not “personally the landlord” unless the fiduciary personally assumes obligations (for example, by signing a lease without indicating the fiduciary capacity) or commits a breach of fiduciary duty.

Key Requirements

• Act in a fiduciary capacity (not personally): Communications, contracts, and banking should be in the name of the estate or trust, with the fiduciary clearly signing as “Personal Representative” or “Trustee.”
• Preserve and manage assets with reasonable care: The fiduciary must take practical steps to protect the property and income stream (rent), and avoid preventable losses caused by neglect, commingling, or self-dealing.
• Coordinate properly with co-fiduciaries: A co-executor/co-trustee must not ignore problems simply because another family member is “handling it.” If a co-fiduciary’s wrongful act or omission could be prevented with ordinary care, in some situations liability can follow for failing to act.

What the Statutes Say

• N.C. Gen. Stat. § 32-27 (Fiduciary powers, including managing real property and employing agents) – Authorizes common fiduciary powers often incorporated into wills and trusts, including managing real property, leasing, collecting rents, and hiring agents to assist.
• N.C. Gen. Stat. § 42-5 (Apportionment of rent when a lease is affected by death) – Addresses how rent may be apportioned when a lease period is interrupted by death, which can matter when rent spans the date of death.

Analysis

Apply the Rule to the Facts: The estate/trust includes rental real estate and [CLIENT] is serving as both co-trustee and co-executor, so some level of oversight of rent collection, property condition, and lease administration is typically part of protecting assets. That does not automatically mean [CLIENT] must personally perform landlord tasks day-to-day; hiring a property manager and keeping all actions in the estate/trust name is often the cleaner approach. The risk increases if another family member is withholding information (such as a promissory note titled in [DECEDENT]’s individual name) because fiduciaries generally must identify and assemble assets and keep good records. If a co-fiduciary’s mishandling could be prevented through ordinary care, doing nothing can create exposure.

Process & Timing

1. Who acts: The co-executors (personal representatives) for probate assets and the co-trustees for trust assets. Where: For probate administration, the Estates Division of the Clerk of Superior Court in the county where the estate is administered. What: Confirm whether each rental property is titled in the trust, in the estate, or already vested in heirs/devisees; then set up a clear rent-collection and management plan in the correct name. When: As early as possible after qualification/acceptance, because rent, repairs, insurance, and tenant issues do not pause during administration.
2. Stabilize management: Notify tenants where to pay rent, confirm insurance coverage, and document the condition of the property. If a property manager is retained, use a written management agreement and ensure the manager remits rent to an estate/trust account (not a personal account).
3. Address missing or undisclosed assets: Gather records (mail, bank statements, closing files, recorded documents, and payment histories) to identify items like a vehicle or promissory note that may still be in the decedent’s individual name. If cooperation breaks down, consider formal written requests for information and, when necessary, court involvement through the Clerk of Superior Court.

Exceptions & Pitfalls

• Signing personally instead of as fiduciary: A common way fiduciaries accidentally become “personally responsible” is by signing leases, vendor contracts, or settlement agreements without clearly stating the fiduciary capacity (and without using the estate/trust name).
• Commingling and informal rent handling: Allowing rent to be paid into a personal account, or letting a family member collect rent informally without records, can create accounting problems and potential fiduciary liability.
• Co-fiduciary inaction: When one co-executor/co-trustee is not transparent, the safest practice is to document requests for information and take reasonable steps to prevent loss. North Carolina law can hold a fiduciary responsible for losses caused by a joint fiduciary’s wrongful acts or omissions that could have been prevented with ordinary care.
• Real estate may not be an “estate expense” by default: Depending on how title passes at death and whether the personal representative has taken control for administration purposes, ongoing costs and rent rights may fall on heirs/devisees rather than the probate estate. This is a frequent source of confusion and should be clarified early.

For more background on fiduciary duties and oversight, see responsibilities as executor during the early steps of settling an estate and what happens if multiple family members disagree about how the estate should be handled.

Conclusion

In North Carolina, a co-executor or co-trustee generally is not personally required to “be the landlord” for inherited rental property in an individual-capacity sense. The fiduciary role does require reasonable oversight to protect the property and collect income, often by managing through the estate/trust and hiring qualified agents. The most important next step is to confirm how each rental property is titled and then put rent collection and management in writing in the estate/trust name as soon as possible.

Talk to a Probate Attorney

If handling inherited rental property as a co-executor or co-trustee is creating risk, conflict, or uncertainty about who should manage tenants and rent, our firm has experienced attorneys who can help explain options and timelines 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.