Jan292026
Estate Planning Q&A Series

How can I tell if the trustee is following the trust terms and acting in the beneficiary’s best interests? – North Carolina

Short Answer

In North Carolina, the most practical way to tell whether a trustee is following the trust terms and acting in the beneficiary’s best interests is to review the trust document and compare it to clear, written records of what the trustee has done: account statements, receipts, and a written accounting. A trustee should keep trust property separate, keep good records, and provide information that lets beneficiaries understand what assets exist, what was paid out, and why. If the trustee will not provide reasonable information or the numbers do not match the trust’s rules, a beneficiary can ask the clerk of superior court to review the trustee’s actions and, in some situations, compel an accounting.

Understanding the Problem

In North Carolina trust administration, the key question is whether the fiduciary acting as trustee is carrying out the written trust terms (who benefits, when distributions happen, and what expenses are allowed) while managing the trust for the beneficiary’s benefit rather than the trustee’s personal benefit. This issue often comes up after a family death or a change in who is handling finances, especially when a different relative steps into the trustee role and the beneficiary wants confirmation that the trust is being managed correctly. The decision point is whether the trustee’s actions match the trust’s instructions and basic fiduciary duties, as shown by the trust document and the trustee’s records.

Apply the Law

North Carolina generally expects a trustee to administer the trust according to its terms and to act as a fiduciary—meaning the trustee must put the beneficiary’s interests first when making trust decisions. In day-to-day practice, that usually shows up in three places: (1) whether the trustee can produce the governing trust document and follow its distribution rules, (2) whether the trustee keeps trust assets separate and maintains complete records, and (3) whether the trustee provides enough information (including accountings when appropriate) for beneficiaries to understand what is happening with the trust property. When disputes arise, the clerk of superior court is commonly the forum for many trust-related proceedings under North Carolina procedure, and the clerk can order a fiduciary to file a correct and complete account in certain contexts.

Key Requirements

  • Follow the trust’s written instructions: The trustee’s job is to do what the trust says—such as paying for a beneficiary’s needs, making distributions on a schedule, or holding property until a stated event happens.
  • Act loyally and avoid self-dealing: Trust decisions should be made for the beneficiary’s benefit, not to benefit the trustee or other family members outside the trust’s terms.
  • Keep trust assets and records organized: Trust property should be kept separate from the trustee’s personal funds, and the trustee should keep records that explain deposits, payments, and investment activity.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, a parent has died, and a different relative is now acting as fiduciary/trustee for a living grandparent’s trust-related arrangement. The first check is whether the current trustee can provide the trust document (and any amendments) and explain, in writing, what the trust requires for management and distributions. The next check is whether the trustee can provide organized records showing that trust assets are held in trust accounts (not mixed with personal funds) and that payments made from the trust match the trust’s permitted purposes and the beneficiary’s interests.

Process & Timing

  1. Who requests information first: A beneficiary (or an authorized representative, depending on capacity issues). Where: Directly from the trustee in writing. What: A copy of the trust (and amendments), a current asset list, recent statements, and a written accounting showing money in/money out with explanations. When: As soon as a concern arises, and then periodically (often annually) or when a major event occurs (like a trustee change).
  2. If the trustee does not respond or the information is incomplete: Send a follow-up written request that is specific (date ranges, accounts, categories of expenses) and asks for supporting documents (statements, invoices, closing documents). Keep copies of all correspondence.
  3. If the dispute continues: A beneficiary may file a trust-related proceeding with the clerk of superior court in the appropriate county to seek court oversight, which can include compelling a proper accounting or reviewing certain fiduciary actions, depending on the type of trust and the issues involved.

Exceptions & Pitfalls

  • Not every “trust-like” arrangement is the same: Some arrangements are custodial trusts, pooled trusts, or other fiduciary setups with different accounting rules. The right request and the right court procedure can depend on the trust type and who the “qualified beneficiaries” are.
  • Confusing a power of attorney role with a trustee role: A power of attorney ends at death, but a trustee’s authority comes from the trust document and continues as long as the trust exists. Mixing these concepts can lead to requesting the wrong documents or accusing the wrong person of wrongdoing.
  • Accepting vague summaries instead of a real accounting: A trustee’s “update” is not the same as a transaction-by-transaction accounting with beginning balance, receipts, disbursements, and ending balance supported by statements.
  • Missing a short objection window: Some notices (especially about compensation) can create short timelines to seek review. Waiting can reduce leverage or complicate recovery if overpayments occurred.

Conclusion

In North Carolina, the clearest way to tell whether a trustee is following the trust terms and acting in the beneficiary’s best interests is to compare the trust’s written instructions to the trustee’s records: trust account statements, receipts, and a written accounting that explains what came in, what went out, and why. Trustees should keep trust property separate and maintain records that can be reviewed. A practical next step is to make a written request to the trustee for the trust document and a written accounting for a defined time period.

Talk to a Estate Planning Attorney

If you’re dealing with concerns about whether a trustee is following a trust and protecting a beneficiary’s interests, our firm has experienced attorneys who can help explain options, requests to make, and timelines to watch. 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: Estate Planning 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.