How do I close an estate bank account and use a law firm’s trust account in North Carolina probate?

1. Detailed Answer

Closing an Estate Bank Account

When a personal representative finishes paying debts, taxes and expenses of a decedent’s estate, the next step is closing the estate bank account. North Carolina law assigns the personal representative the duty to collect and manage the decedent’s property and complete the estate administration (G.S. 28A-13-2(7)). Follow these steps:

• Verify Claims and Expenses – Confirm that all creditor claims are resolved, final bills paid and any estate income and inheritance taxes submitted.
• Prepare Final Accounting – Compile a final accounting report for the court, showing all receipts, disbursements and remaining cash.
• Obtain Court Approval – File the final accounting under G.S. 28A-19-3 and secure an order allowing distribution of remaining funds.
• Contact the Bank – Present certified Letters Testamentary or Letters of Administration, the court order approving the final accounting and a signed resolution to close the account.
• Close the Account – Complete the bank’s closure form; request a cashier’s check or wire for the remaining balance.

Using a Law Firm’s Trust Account

North Carolina attorneys must keep client or third-party funds separate from firm funds. While waiting to distribute estate proceeds, you can deposit the balance into the law firm’s IOLTA or trust account under the Rules of Professional Conduct (Rule 1.15). This approach avoids dormant estate accounts and simplifies final distributions.

Key points:

• Separate Ledger – Maintain a clear trust ledgers for each estate, showing deposits, withdrawals and disbursements.
• Timely Distribution – Use trust funds to pay final expenses, taxes and distribute to beneficiaries once the court approves.
• Fee Withholding – Withdraw attorney fees from the trust account only after the court approves them.
• Final Reconciliation – Perform a trust account reconciliation before closing and issuing final checks to heirs.

2. Quick Reference Checklist

1. Review and settle all estate debts and taxes.
2. Prepare and file a final accounting with the clerk of superior court.
3. Obtain an order approving disbursement of remaining funds.
4. Close the estate bank account using certified court documents.
5. Deposit residual funds in the firm’s trust account under Rule 1.15.
6. Use trust funds to issue final payments and distribute inheritances.
7. Reconcile the trust ledger and withdraw authorized fees.
8. Document the closing and finalize trust records.

Conclusion and Next Steps

Closing an estate bank account and moving funds into a law firm’s trust account ensures a smooth final distribution under North Carolina probate law. At Pierce Law Group, our attorneys guide personal representatives through each step of closing the estate, handling bank requirements, trust accounting and court filings.

Contact us today for personalized assistance: intake@piercelaw.com or call (919) 341-7055.