Jan112026
Probate Q&A Series

Are transfer‑on‑death and retirement accounts excluded from the probate estate, and how should they be listed on the inventory and accounting? – North Carolina

Short Answer

In North Carolina, a transfer-on-death (TOD/POD) securities account and a retirement account (like an IRA) with a living, named beneficiary usually pass outside the probate estate, so they are generally not “probate assets” the executor collects and distributes under the will. However, certain non-probate assets can still be relevant to estate administration because they may be reachable to pay valid estate debts if the probate estate is not enough. As a result, some Clerks expect TOD/POD-type assets to be disclosed on the inventory in a specific “recoverable if needed” category, and any non-probate funds actually used to pay estate bills should be reflected in the accounting to the extent used.

Understanding the Problem

Under North Carolina probate practice, the key question is whether a transfer-on-death account and an IRA with named beneficiaries are part of the “probate estate” that the executor must gather, list, and distribute through the Clerk of Superior Court estate file, or whether they pass directly to the named beneficiaries. If they pass outside probate, the next decision point is how (if at all) those assets should appear on the estate inventory and later accountings filed with the Clerk.

Apply the Law

North Carolina generally treats beneficiary-designated assets as non-probate transfers: they pass by contract or registration to the named beneficiary at death rather than under the will. For TOD securities registrations, North Carolina law expressly says the transfer is “not testamentary,” meaning it does not operate as a will substitute through probate. Even so, North Carolina law also recognizes that certain TOD interests can remain liable for the decedent’s debts if the probate estate is insufficient, which is why Clerks may require disclosure on the inventory in a category that signals “recoverable if needed to pay claims.” Retirement accounts (including IRAs) typically follow the beneficiary designation; if payable to an individual beneficiary, they are commonly treated as non-probate and not included as probate assets on the inventory.

Key Requirements

  • Identify whether the asset is probate or non-probate: Assets titled solely in the decedent’s name (with no beneficiary designation) are typically probate assets; TOD/POD registrations and retirement accounts with named beneficiaries typically pass outside probate.
  • Confirm the beneficiary designation and ownership form: The executor should confirm whether the TOD/POD registration is valid and who is named, and confirm whether the IRA names living primary/contingent beneficiaries.
  • Disclose “recoverable if needed” assets when required by local practice: Even if an asset passes outside probate, it may still be listed in a separate inventory category if it could be reached to pay estate debts when the probate estate is short.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts describe a TOD account and an IRA with named beneficiaries, along with typical probate assets (house, car, household items, checking). The checking account and personal property titled in the decedent’s name are usually probate assets the executor lists as estate property. The TOD account and IRA generally pass directly to the named beneficiaries and are not collected for distribution under the will, but the TOD account may still need to be disclosed on the inventory in a “recoverable if needed to pay claims” category because North Carolina law allows recovery from TOD beneficiaries if the probate estate cannot cover valid debts.

Process & Timing

  1. Who files: The executor (personal representative). Where: The Estates Division in the office of the Clerk of Superior Court in the county where the estate is opened. What: The estate Inventory and later Accountings required by the Clerk’s estate administration process. When: The Clerk sets filing deadlines; local practice can vary by county, so the estate file and Clerk’s instructions control the due dates.
  2. How to list the TOD account on the inventory: Many Clerks expect TOD/POD securities to be disclosed under a section for property that is not in the executor’s hands but can be added to the estate if needed to pay claims (often described as “Other Personal Property Recoverable”). The inventory description should be complete but should not include full account numbers.
  3. How to treat the IRA on the inventory and accounting: If the IRA is payable to an individual beneficiary (not the estate), it is usually not listed as a probate asset on the inventory and does not appear on the accounting because the executor does not receive or disburse it. If any portion of a beneficiary-designated asset is actually used to pay estate debts (for example, by agreement or because the probate estate is short), the accounting typically reflects the amount used and how it was applied, rather than treating the entire non-probate account as an estate asset.

Exceptions & Pitfalls

  • “Named beneficiary” problems: If no beneficiary survives (or the designation fails), a TOD account can end up payable to the estate, which changes it from non-probate to probate for inventory and accounting purposes.
  • Debt-payment pressure: Even when a TOD transfer is non-probate, North Carolina law can allow recovery from the TOD beneficiary if the probate estate cannot pay valid debts. That risk is a common reason Clerks want TOD assets disclosed in a recoverable category.
  • Mixing funds creates accounting issues: Using non-probate funds to pay probate bills (or depositing non-probate funds into an estate account) can complicate the accounting and may require clear documentation showing what was used, when, and why.
  • Incomplete descriptions: Inventories should describe assets clearly and use date-of-death values where required; omitting ownership form (TOD/POD vs. sole ownership) often leads to Clerk questions and amended filings.

For more detail on how beneficiary designations affect probate treatment, see how beneficiary designations on retirement and bank accounts affect whether they bypass probate.

Conclusion

In North Carolina, TOD/POD securities accounts and IRAs with living named beneficiaries usually pass outside the probate estate, so the executor generally does not list them as probate assets to be collected and distributed under the will. A TOD account may still need to be disclosed on the inventory in a “recoverable if needed to pay claims” category because it can remain liable for estate debts if the probate estate is short. The next step is to confirm the beneficiary designations and file the inventory with the Clerk of Superior Court by the deadline set in the estate administration process.

Talk to a Probate Attorney

If an estate includes a mix of probate assets and beneficiary-designated accounts, our firm has experienced attorneys who can help sort out what must be inventoried, what should be disclosed as potentially recoverable, and how to keep the accounting clean. 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.