Feb32026
Probate Q&A Series

How do I transfer a minor beneficiary’s inheritance into a custodial account during probate? – North Carolina

Short Answer

In North Carolina, a personal representative can usually transfer a minor beneficiary’s inheritance into a custodial account under the North Carolina Uniform Transfers to Minors Act (UTMA) by titling the account and transfer documents in the required UTMA form. However, if the transfer would be to the personal representative as the custodian, or if the total value transferred will exceed $10,000, the clerk of superior court must authorize the transfer. When UTMA is not available or not approved, the personal representative can often pay the minor’s share to the clerk to hold and manage for the minor.

Understanding the Problem

In a North Carolina probate estate, the personal representative may need to distribute a beneficiary’s share to a person who is under 18. The practical question is whether the personal representative can move that inheritance into a custodial account (often called a UTMA account) instead of opening a formal guardianship of the minor’s property. The key decision point is whether North Carolina law allows the transfer to be made to the proposed custodian without a separate court authorization, especially when the proposed custodian is the same person serving as personal representative.

Apply the Law

North Carolina allows certain transfers to minors to be made using the UTMA framework in Chapter 33A. A UTMA transfer creates “custodial property” that is owned for the minor’s benefit, but controlled by the named custodian until the minor reaches the age set by the UTMA arrangement. For probate distributions, the clerk of superior court (estate division) is the main office involved when approval is required, and the clerk also has authority to receive and manage funds for a minor in certain situations.

Key Requirements

  • Use a valid UTMA transfer format: The transfer must be made in the statutory UTMA form (for example, an account titled “as custodian for [minor] under the North Carolina Uniform Transfers to Minors Act”), so the financial institution and the estate file clearly show the money is for the minor and controlled by a custodian.
  • Confirm authority under the will (or lack of prohibition): If the will names a custodian or authorizes a UTMA transfer, the personal representative generally follows that direction. If the will is silent, a UTMA transfer may still be possible if it is in the minor’s best interest and not inconsistent with the will.
  • Know when clerk authorization is required: Court authorization is required if (1) the total value transferred under this UTMA method will exceed $10,000, or (2) the transfer would be made to the transferor (for example, the personal representative transferring estate property to themself as custodian).

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the personal representative needs to distribute a minor beneficiary’s share into a custodial account and expects the account to be titled to the personal representative “as custodian.” Under North Carolina’s UTMA rules, that specific fact matters: when the transfer is to the transferor (which can include a fiduciary transferring estate property to themself as custodian), the clerk’s authorization is required. Separately, if the minor’s share being transferred using this method will total more than $10,000, the clerk’s authorization is also required even if a different adult serves as custodian.

Process & Timing

  1. Who files: The personal representative. Where: The Clerk of Superior Court (Estates) in the county where the estate is administered. What: A request/petition for authorization to make a UTMA transfer when required (local practice and forms vary by county). When: Before making the distribution if the transfer is to the personal representative as custodian or if the total UTMA transfer will exceed $10,000.
  2. Set up the custodial account correctly: Open an account at a financial institution in the statutory UTMA style (the title must include wording substantially like “as custodian for [minor] under the North Carolina Uniform Transfers to Minors Act”). For cash distributions, the estate check and the deposit should match the UTMA titling so the paper trail shows the funds were distributed for the minor’s benefit under UTMA.
  3. Complete the estate distribution and document it in the file: After approval (if needed), the personal representative makes the distribution and keeps clear records for the estate accounting/closing package (for example, proof of the check, deposit confirmation, and the UTMA account identification showing the required titling).

Exceptions & Pitfalls

  • Transfer-to-self triggers extra scrutiny: Even when the plan is well-intentioned, a personal representative transferring estate funds to themself as custodian is a built-in conflict issue under the UTMA statute and typically requires clerk authorization.
  • The $10,000 threshold is easy to miscalculate: The statute looks at the total value transferred under that UTMA method, including multiple transfers. Splitting a distribution into smaller checks does not avoid the authorization requirement if the total exceeds the threshold.
  • Incorrect account titling can break the plan: If the account is opened as a generic “minor savings account” without the UTMA wording, the clerk or the bank may treat it as the wrong type of account, creating problems for estate closing and later access/control.
  • Will terms can override the default approach: If the will sets a different plan (for example, a testamentary trust or a different custodian), the personal representative generally must follow that plan and should not use UTMA in a way that conflicts with the will.
  • Alternative route if UTMA is not workable: If there is no appropriate custodian, the bank will not open a UTMA account, or the clerk will not approve the proposed custodian, North Carolina law provides other mechanisms for handling funds owed to minors, including delivery to the clerk in certain situations.

For more background on how probate typically handles a minor heir, see what happens in probate when one of the heirs is still a minor.

Conclusion

In North Carolina probate, a personal representative can transfer a minor beneficiary’s inheritance into a UTMA custodial account by using the required UTMA titling and transfer format. If the transfer would be to the personal representative as custodian, or if the total UTMA transfers will exceed $10,000, the clerk of superior court must authorize the transfer before distribution. The next step is to file a request with the Clerk of Superior Court (Estates) for authorization before issuing the minor’s distribution check.

Talk to a Probate Attorney

If a North Carolina estate needs to distribute a minor beneficiary’s share into a custodial account and the clerk may require approval, our firm has experienced attorneys who can help explain the options, prepare the paperwork, and keep the estate on track for closing. 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.