Is it possible to buy out the other beneficiary’s share instead of selling the property? – North Carolina

Short Answer

Yes. In North Carolina, co-owners can agree to a private buyout at any time, or ask the Clerk of Superior Court in a partition proceeding to structure a buyout. If the property is inherited “heirs property,” state law provides a formal right for one co-owner to buy the other’s share at an appraised value. If the estate needs the house sold to pay debts, the personal representative may need court authority before any transfer.

Understanding the Problem

The issue is narrow: in North Carolina, can a beneficiary-co-owner buy the other beneficiary’s share of inherited residential real estate instead of selling it? The roles are an executor under a will and a sibling co-owner. The potential actions are a negotiated buyout, or using a partition proceeding before the Clerk of Superior Court. Timing matters if a transfer happens within two years of death or if estate debts require a sale.

Apply the Law

North Carolina law allows two paths to a buyout: (1) a voluntary settlement with a deed among the co-owners (often with the personal representative joining if within two years of death), and (2) a partition special proceeding in the county where the property lies. In partition, the Clerk can order partition in kind with an equalizing payment (owelty) or, if the property qualifies as “heirs property,” apply statutory buyout procedures that give co-owners the right to purchase the interests of those seeking sale at an appraised value. Estate administration rules affect who must sign and whether court authority is needed if the sale is to pay estate debts.

Key Requirements

• Co-ownership and forum: The main forum is a partition special proceeding before the Clerk of Superior Court in the county where the property is located.
• Voluntary buyout: Co-owners may privately agree on a buyout price and sign a deed. If within two years of death, the personal representative typically publishes the creditor notice and joins the deed to protect against creditor challenges.
• Heirs property buyout: If the home is inherited and meets the statutory definition of heirs property, the court values the property (often by appraisal). Non-selling co-owners can elect to buy the selling co-owner’s share at that value within short, statute-set windows.
• Owelty/credits: In partition, the Clerk may use an equalizing payment (owelty) or sale proceeds accounting to credit a co-owner for carrying costs (taxes, mortgage interest, insurance) and certain value-enhancing improvements.
• Estate debt vs. authority: If the house must be sold to pay estate debts, the personal representative needs either will-based power or a court order in a special proceeding before any sale.

What the Statutes Say

• North Carolina Gen. Stat. § 46A-1 (Partition procedures) – Partition is handled as a special proceeding; the Clerk has a central role.
• North Carolina Gen. Stat. § 28A-15-1 (Using estate assets to pay claims) – Real property can be used to pay estate debts when in the estate’s best interest.
• North Carolina Gen. Stat. § 28A-17-12 (Sales by heirs or devisees) – Within two years of death, a deed by heirs/devisees is generally valid against creditors only if the personal representative has published the creditor notice and joins the deed.
• North Carolina Gen. Stat. § 1-339.36 (Upset bids) – Judicial and many private court-approved sales include a 10-day upset bid period.

Analysis

Apply the Rule to the Facts: An executor-beneficiary and a sibling co-owner can agree to a private buyout and record a deed. Because this relates to inherited property and the executor has been paying carrying costs, a written settlement can adjust the price for fair credits. If the transfer occurs within two years of death, the personal representative should publish the creditor notice and join the deed so the transfer stands against creditors. If a dispute arises or a structured buyout is preferred, a partition proceeding lets the Clerk apply heirs-property buyout procedures or use owelty to effect a buyout without a public sale.

Process & Timing

1. Who files: Any co-owner (or the personal representative if needed). Where: Clerk of Superior Court in the county where the property is located. What: For an agreed buyout, prepare a settlement agreement and deed; if using partition, file a verified petition for partition and serve a Special Proceedings Summons (AOC-SP-100). When: If the deed is within two years of death, ensure the personal representative has published the creditor notice and joins the deed.
2. If partition is filed and the property is heirs property, the Clerk typically orders an appraisal, opens a window for non-selling co-owners to elect to buy, and sets a deadline to deposit the price. If no buyout occurs, the Clerk proceeds to partition in kind with owelty or orders a sale.
3. If a sale is ordered, it follows judicial sale procedures. Private sales approved by the Clerk and public sales carry a 10-day upset bid period before the sale is confirmed. Proceeds are applied, and allowed credits/owelty are resolved before distribution.

Exceptions & Pitfalls

• Small estate collection by affidavit does not authorize the sale or transfer of real estate; a personal representative must qualify if estate processes are needed for the home.
• If the house must be sold to pay estate debts, the personal representative needs will authority or a court order; otherwise, title in the heirs/devisees controls.
• Failing to join all necessary parties (including all heirs/devisees or lienholders when required) can void orders as to those parties.
• Credits are limited to necessary carrying costs and value-added improvements; routine upkeep without authority may not be reimbursed through the estate.
• In heirs property cases, buyout election and payment deadlines are short; missing them can move the case to physical partition or sale.

Talk to a Partition Action Attorney

If you’re dealing with an inherited home and want a clean buyout instead of a sale, our firm has experienced attorneys who can help you understand your options and timelines. 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.