Feb102026
Estate Planning Q&A Series

What can I do if I think a trustee misappropriated trust assets and won’t give me an accounting? – North Carolina

Short Answer

Under North Carolina law, a trustee generally must keep records and provide beneficiaries with information about trust administration, and a court can order an accounting and other remedies if the trustee refuses. If there are signs that trust money was used for the trustee’s personal benefit, a beneficiary can ask the court to compel information, require a formal accounting, and—when supported by evidence—remove the trustee and pursue recovery of misused assets. The right forum is often the Clerk of Superior Court handling trust matters, though some disputes may be heard in Superior Court depending on the issues and relief requested.

Understanding the Problem

In North Carolina, the key question is what options exist when a trustee (often a family member) is suspected of using trust property for personal purposes and refuses to provide basic trust information or an accounting. The issue usually turns on whether the person is actually acting as trustee, whether the person holding the money is required to keep trust funds separate and documented, and whether the beneficiary has the right to demand records and a report of what came in, what went out, and what is left. The practical trigger is a long period with no statements, no records, and no clear explanation of how trust funds were handled.

Apply the Law

North Carolina treats trustees as fiduciaries. That means a trustee must manage trust property for the beneficiaries, keep appropriate records, and share information needed to protect the beneficiaries’ interests. When a trustee will not provide information, the beneficiary can ask the court to order an accounting and, if warranted, impose remedies for breach of trust such as repayment and replacement of the trustee. If the arrangement is a custodial trust under North Carolina’s custodial trust statute, the law is especially direct about annual statements and accountings upon reasonable request.

Key Requirements

  • Beneficiary standing and a real trust relationship: The person requesting information must be a beneficiary (or a proper representative) and the assets must be held in a trust or custodial trust capacity, not merely an informal family arrangement.
  • Duty to keep records and provide information: Trustees are expected to maintain records, keep trust property identifiable and separate, and provide information that allows beneficiaries to understand the trust’s administration.
  • Court involvement when voluntary compliance fails: If requests are ignored, a beneficiary can petition the appropriate North Carolina court office to compel an accounting and seek additional relief (such as removal of the trustee) when the facts support it.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts described include (1) a belief that a relative used funds meant to be held in trust to purchase a home and (2) years without information or an accounting. Those facts line up with two core problems North Carolina courts can address: a trustee’s failure to provide records and a potential breach of fiduciary duty if trust money was diverted for personal use. If the funds were held as a custodial trust, North Carolina law specifically contemplates annual reporting and reports upon reasonable request, and it allows a court petition to force an accounting.

Process & Timing

  1. Who files: A beneficiary (or a proper representative). Where: Often the Clerk of Superior Court in the county with trust jurisdiction (commonly where the trust is administered or where the trustee resides), though some claims may be filed in Superior Court depending on the relief requested. What: A petition or complaint asking the court to compel an accounting and production of trust records, and (if supported) to address breach of trust remedies such as repayment and trustee removal. When: As soon as the refusal to provide information becomes clear, especially if assets may be dissipating.
  2. Early case steps: The court typically requires notice to interested persons and gives the trustee a chance to respond. If records are missing, the court can order the trustee to produce bank statements, closing documents, and other proof showing where trust money went.
  3. Possible outcomes: The court can order a formal accounting, require turnover of records and assets, approve appointment of a successor trustee if removal is ordered, and set further hearings to determine whether misappropriated funds must be repaid.

Exceptions & Pitfalls

  • Not every “trust” is legally a trust: Some family arrangements are informal. The first step is confirming whether there is a signed trust document, a custodial trust designation, or accounts titled in a trust capacity.
  • Missing paper trail: A trustee who mixed trust funds with personal funds can make tracing harder. Quick action to preserve bank records, closing documents, and account statements often matters.
  • Forum and procedure issues: Trust disputes can involve the Clerk of Superior Court and/or Superior Court depending on the claims. Filing in the wrong place or asking for the wrong type of relief can slow the case.
  • Delay and limitation defenses: Even strong claims can be weakened by waiting too long. For custodial trusts, North Carolina has specific limitation rules tied to accountings and termination.

Conclusion

In North Carolina, when a trustee will not provide information or an accounting and there are signs trust funds were used for personal purposes, the usual next step is to ask the court to compel records and a formal accounting and to seek appropriate remedies if a breach is proven. A beneficiary typically starts by filing a petition with the Clerk of Superior Court (or the appropriate court) requesting an accounting and related relief. If the arrangement is a custodial trust, act promptly because limitation periods can run based on accountings or trust termination.

Talk to a Estate Planning Attorney

If you’re dealing with a trustee who will not provide an accounting and there are concerns about misuse of trust funds, our firm has experienced attorneys who can help explain the court process, the records to request, and the timelines that may apply. 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.