Dec182025
Probate Q&A Series

Can I require my sibling to buy out my share of the rental properties held in the trust, and what are my options if we cannot agree on value or terms? – North Carolina

Short Answer

Usually, North Carolina law does not let a trust beneficiary or co-trustee force a sibling to “buy out” a trust interest unless the trust document itself gives that right. When co-successor trustees must act together and cannot agree, common options include using an independent appraisal and written buyout terms, seeking court instructions to break a trustee deadlock, or asking the court to remove or replace a trustee in serious cases. A buyout can create conflict-of-interest issues for a trustee, so many families use court approval or written beneficiary consent after full disclosure to reduce later challenges.

Understanding the Problem

In North Carolina, the question is whether a trust beneficiary who is also a co-successor trustee can make a sibling buy that beneficiary’s share of rental properties titled in the trust when both co-trustees must co-sign and cannot agree on price or deal terms. The key decision point is whether the trust requires or allows a buyout (or another exit path) or instead requires the trustees to manage, distribute, refinance, or sell the rentals under the trust’s terms. The practical trigger is a co-trustee stalemate that prevents action, such as signing a listing agreement, approving a sale, refinancing, or making distributions.

Apply the Law

Under North Carolina’s trust law, the trust document controls first. If it does not give a forced-buyout right, a beneficiary generally cannot compel a sibling to purchase the beneficiary’s interest just because the properties are in the trust. When two people serve as co-trustees, North Carolina’s default rule is that they must act unanimously, which can cause a deadlock. In that situation, a common court-based remedy is to ask the Superior Court (often through the Clerk of Superior Court in estate matters) for instructions or other relief so the trust can be administered according to its terms. Any buyout involving a trustee as buyer (directly or indirectly) raises duty-of-loyalty and conflict-of-interest concerns, so the process must be structured carefully.

Key Requirements

  • Trust terms control: The trust may allow or prohibit in-kind distributions, sales, partition-like allocations, loans to beneficiaries, or buyouts; those terms usually set the available path.
  • Co-trustee decision rule: If there are two co-trustees and the trust does not say otherwise, North Carolina’s default rule requires unanimous action, which makes stalemates legally significant.
  • Fiduciary safeguards for a buyout: A trustee must act in good faith and remain loyal and impartial to the beneficiaries; a trustee-involved purchase is commonly treated as a potential conflict unless authorized, approved, or properly consented to after full disclosure.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The rentals and bank accounts appear titled in the trust, and both siblings serve as co-successor trustees who must co-sign, which fits North Carolina’s default expectation of joint decision-making when there are two co-trustees. If the trust does not grant a forced buyout right, one sibling typically cannot require the other to purchase the departing sibling’s “share” on demand; instead, the trustees must follow the trust’s distribution and administration instructions. If the siblings cannot agree on value or terms for a buyout (or even whether to sell), the deadlock itself becomes the practical problem, and court instructions or trustee changes may be the tool to move the administration forward. Any buyout that puts one trustee on the buying side should be treated as a conflict-risk transaction and handled with safeguards such as independent valuation, full disclosure, and (in many cases) court approval.

Process & Timing

  1. Who files: Usually a trustee or beneficiary with an interest in proper administration. Where: The Clerk of Superior Court in the North Carolina county tied to the trust’s administration or property, or the Superior Court division depending on the relief requested and local practice. What: A petition or complaint asking for instructions and specific relief to administer the trust (for example, permission to sell trust real estate, approve a buyout framework, appoint a neutral fiduciary for a discrete task, or address a co-trustee impasse). When: As soon as a deadlock prevents required trust action (such as paying expenses, maintaining insurance, renewing leases, or selling/refinancing).
  2. Valuation step: The parties often use one or more independent appraisals for each rental property and a clear “as of” valuation date; if terms are disputed, a written term sheet (price, closing timeline, repairs, prorations, treatment of reserves, and who pays costs) helps narrow issues for settlement or a court order.
  3. Order and implementation: If the court grants relief, it typically issues an order that authorizes a sale process, approves a buyout (or the method to set value), or changes trustee authority so the trust can sign documents and proceed. The trustees then carry out the order and document the transaction in the trust’s records and accounting.

Exceptions & Pitfalls

  • The trust may already set the answer: Some trusts authorize in-kind distributions (for example, allocating Property A to one beneficiary and Property B to the other) or give a trustee discretion to sell and distribute cash. A forced buyout still usually requires a clear authorization in the trust or agreement among the interested parties.
  • Conflict-of-interest challenges: If a trustee effectively buys trust property (or structures a deal that benefits the trustee), the transaction can be attacked later as conflicted unless it fits within a protection pathway such as trust authorization, court approval, or informed consent/ratification after full disclosure.
  • Deadlock management mistakes: Co-trustees sometimes try to “act alone” by signing listing agreements, leases, or withdrawals without the other signature. That can create personal liability or litigation over whether the act was authorized.
  • Valuation traps: Disputes often come from using different valuation methods (occupied vs. vacant value, repairs/CapEx, rent-roll assumptions, or whether to discount for minority interests). Agreeing in writing on the appraisal scope and valuation date can prevent a second fight after the appraisal arrives.
  • Mixing roles: A sibling can be both trustee and beneficiary, but the trustee role requires acting for all beneficiaries. Mixing “owner” thinking with “fiduciary” duties is a common flashpoint in buyout negotiations.

Conclusion

In North Carolina, a beneficiary generally cannot force a sibling to buy out a trust interest unless the trust document gives that right. When two co-successor trustees must co-sign and cannot agree on value or terms, the usual paths are a negotiated buyout supported by independent appraisal and clear written terms, or a court petition for instructions (and, in serious cases, trustee changes) so the trust can be administered. The practical next step is to file a petition for instructions with the Clerk of Superior Court to resolve the co-trustee deadlock as soon as it blocks trust action.

Talk to a Probate Attorney

If a co-trustee deadlock is preventing decisions about trust-owned rental properties, an experienced probate attorney can help outline realistic buyout structures, reduce conflict-of-interest risk, and pursue court instructions when needed. 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: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.