Short Answer

In North Carolina, you confirm a funeral-home assignment by getting two things: (1) the signed assignment and claim paperwork the beneficiary and funeral home submitted, and (2) the insurer’s claim record showing who was paid and how much. Because life insurance payable to a named beneficiary is not an estate asset, the personal representative should still collect proof of payment and reflect it in the estate accounting so everyone can see how the funeral bill was satisfied.

Understanding the Problem

You want to verify whether a North Carolina life insurance policy was assigned so the insurer paid the funeral home directly. As the attorney for the estate administrator, you must confirm how the funeral bill was paid before you account to the Clerk of Superior Court. Here, the funeral home’s records show payment from an insurer and a refund of an overpayment to one heir.

Apply the Law

Under North Carolina law, life insurance payable to a named beneficiary generally passes outside the probate estate. A beneficiary may sign an assignment instructing the insurer to pay the funeral provider directly; any excess usually goes to the beneficiary, not the estate. The personal representative must still document funeral expenses in the accounting, and if any balance remains unpaid, the funeral provider must present a timely claim and will be paid in the statutory order of priority.

Key Requirements

• Written assignment: A signed assignment or authorization from the policy beneficiary to the funeral home submitted with the insurer’s claim form.
• Insurer verification: The insurer’s claim file or payment confirmation showing the payee (funeral home), date, and amount, and whether any remainder was paid to the beneficiary.
• Estate documentation: Itemized funeral invoice marked paid, receipt from the funeral home, and insurer confirmation included with the estate accounting.
• Priority and caps: Funeral expenses have a preferred payment status up to a statutory cap for priority; any excess is treated as a lower‑class claim if a timely claim is presented.
• Authority to bind the estate: The person authorized to arrange disposition can contract for funeral expenses, and the estate is primarily liable for any unpaid balance if a timely claim is made.
• Nonprobate proceeds: Remaining life insurance proceeds after the assignment belong to the beneficiary, not the estate.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-19-8 (Who can bind the estate for funeral expenses) – Allows the authorized person arranging disposition to bind the estate for funeral charges.
• North Carolina Gen. Stat. § 28A-19-6 (Order of claims) – Sets the order and preferred status of funeral expenses and other claims.
• North Carolina Gen. Stat. § 28A-19-3 (Presenting claims) – Establishes deadlines for creditors, including funeral homes, to present claims to the estate.
• North Carolina Gen. Stat. § 90-210.64 (Preneed funeral funds) – Addresses how preneed funeral funds are handled and when balances are paid to the clerk.

Analysis

Apply the Rule to the Facts: Because the funeral home and the heir signed and submitted assignment and claim forms, the insurer likely paid the funeral provider directly and refunded any extra to the beneficiary (who happens to be an heir). To verify, obtain the signed assignment and the insurer’s payment confirmation. In your accounting, include the funeral invoice marked paid and the insurer’s documentation; if the funeral home asserts an additional balance, treat it as a claim subject to priority and timing rules.

Process & Timing

1. Who files: Personal representative or attorney. Where: The life insurer’s claims department. What: Written request for the claim file, including the assignment, proof of loss, payment details, and IRS Form 712; include Letters and beneficiary/PR authorization. When: Request immediately after qualification; insurer responses typically arrive within a few weeks.
2. Next: Ask the funeral home for the signed assignment, itemized statement, receipt, and any refund documentation; reconcile amounts with the insurer’s record. Expect 1–2 weeks depending on the provider.
3. Final: Document the payment in the estate accounting filed with the Clerk of Superior Court (Estates Division) using the North Carolina AOC accounting forms available on nccourts.gov, and note whether any funeral balance remains as a claim.

Exceptions & Pitfalls

• If the beneficiary did not sign the assignment, the insurer may not pay the funeral home; verify signatures match the policy beneficiary.
• If the estate is the policy beneficiary, the proceeds are estate assets and should be collected by the personal representative, then used to pay claims in order.
• Preneed contracts may follow special rules, including deposits with the clerk in some situations; confirm whether a preneed contract applies before assuming standard assignment handling.
• Insurers often require privacy releases; include Letters and authorizations to avoid delay.
• If the estate paid the funeral bill but insurance later covered it, consider reimbursement to the estate from the beneficiary to the extent appropriate.

Talk to a Probate Attorney

If you’re dealing with confirming a life insurance assignment to a funeral home and how to show it in the estate accounting, 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.