Jan252026
Probate Q&A Series

Can the trust assets be transferred to a new corporate trustee without selling the stocks, so the holdings move “in kind” instead of being liquidated? – North Carolina

Short Answer

Often, yes. Under North Carolina trust administration, a change from one corporate trustee to another can frequently be handled by transferring the trust’s brokerage assets “in kind,” meaning the same shares move to the new trustee’s custody without being sold. Whether it can be done depends on (1) what the will/trust terms require, (2) whether the receiving corporate trustee will accept those specific securities, and (3) whether any court or clerk of superior court involvement is needed to appoint or confirm a successor trustee.

Understanding the Problem

In a North Carolina probate administration, a common question is whether a testamentary trust created by a deceased parent’s will can switch from one corporate trustee to another without forcing a sale of stock holdings. The decision point is whether the trust’s assets can be re-titled and delivered to a new corporate trustee “in kind” (same shares, same positions) rather than being liquidated and repurchased. This question usually comes up when a will directs some shares to be distributed outright to certain children and other shares to be held in separate sub-trusts, and the family is evaluating whether to keep the current trust/brokerage provider or move the trust administration elsewhere.

Apply the Law

North Carolina law generally allows a successor trustee to step into the role of trustee and take control of trust property. In many cases, that transition can be handled as a custody and title change (re-registration of the account and securities) rather than a sale. The controlling “rule” is practical as much as legal: if the trust instrument (here, the will and any trust terms it creates) permits a trustee change and the successor trustee accepts the appointment, the assets can typically be delivered to the successor trustee in the same form the trust already holds them, unless the trust terms, a court/clerk order, or the receiving institution’s policies require otherwise.

Key Requirements

  • Proper authority to change trustees: The will/trust terms (or a clerk of superior court order, if needed) must authorize the successor corporate trustee to act.
  • Acceptance by the new corporate trustee: The receiving trustee must agree to serve and must be willing/able to custody the specific stocks (and any restricted or thinly traded holdings).
  • Correct titling and delivery of trust property: The stocks must be re-registered or transferred into an account titled in the name of the trust with the new trustee, with documentation that matches the trust’s name and any sub-trust structure.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The will creates a testamentary trust that will (1) distribute certain shares outright and (2) hold other shares in separate sub-trusts. If the trust terms allow a successor corporate trustee (or if the proper authority appoints one), the stock positions held for the continuing trust and sub-trusts can often be transferred “in kind” to the new corporate trustee’s brokerage platform, because the trust is changing fiduciaries—not necessarily changing investments. The outright distributions are a separate step: those shares may be transferred out to the beneficiaries directly (also often in kind) once the trustee is ready to make distribution and any required conditions are satisfied.

Process & Timing

  1. Who initiates: Typically the acting trustee, co-trustee (if any), or an interested person/beneficiary working through counsel. Where: Often handled administratively between the two corporate trustees; if a court appointment is required, filings are usually made with the Clerk of Superior Court in the county handling the estate/trust administration. What: A successor-trustee acceptance package, trust certification/abstract, and transfer paperwork (often including medallion signature guarantee requirements and account re-titling forms). When: Timing depends on how quickly the receiving trustee opens the new trust accounts and completes its onboarding and compliance review.
  2. Coordinate “in kind” transfer mechanics: The current provider and the new corporate trustee coordinate a transfer of the securities positions (not cash) into the new trust account(s). If the will creates separate sub-trusts, the receiving trustee may require separate accounts for each sub-trust before it will accept delivery of the shares allocated to each sub-trust.
  3. Confirm post-transfer administration: After the transfer, the new trustee confirms cost basis records received (if available), updates dividend instructions, and implements the will’s distribution plan (including any outright distributions and any continuing sub-trust allocations).

Exceptions & Pitfalls

  • The will/trust terms may limit trustee changes: Some testamentary trusts name a specific corporate trustee and tightly control when a change is allowed, who can initiate it, and whether court involvement is required.
  • Not every security is transferable “in kind” to every platform: Certain proprietary funds, restricted stock, closely held shares, or positions subject to transfer agent limitations may require special handling, re-registration steps, or (in some cases) liquidation if the receiving trustee cannot custody them.
  • Sub-trust accounting mistakes: When a will creates multiple sub-trusts, a common error is transferring everything into one account and “sorting it out later.” That can create reporting and allocation problems. Setting up the correct sub-trust accounts first often prevents disputes.
  • Outright distributions vs. trust-held shares: Shares meant to be distributed outright are not the same as shares meant to remain in trust. Mixing those steps can cause confusion about who owns dividends, voting rights, and tax reporting (tax questions should be reviewed with a CPA or tax attorney).
  • Missing documentation: Corporate trustees often require a complete document set (probate documents, trustee appointment/acceptance, and trust identification details). Incomplete paperwork is a leading cause of delays and can trigger unnecessary liquidation requests.

Conclusion

In North Carolina, trust assets can often be moved from one corporate trustee to another “in kind,” meaning the same stock positions transfer without being sold, as long as the trust terms and the successor-trustee appointment are handled correctly and the new trustee agrees to accept the holdings. The key practical threshold is whether the receiving trustee can custody the specific securities and whether the trust’s sub-trust structure is set up properly. The next step is to have the acting trustee (or an interested person) start the successor-trustee acceptance and account-opening process with the new corporate trustee as early as possible.

Talk to a Probate Attorney

If a family is dealing with a testamentary trust and deciding whether to move trust administration to a different corporate trustee without liquidating stock holdings, our firm has experienced attorneys who can help clarify the authority to change trustees, the paperwork needed, and the likely timeline. 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.