How does a North Carolina personal representative properly classify and recover estate administration and real property carrying costs in probate?

1. Detailed Answer

When someone dies in North Carolina, the personal representative manages the deceased’s assets and pays debts. Two main cost categories arise during probate:

Estate Administration Expenses

Personal representatives must pay these costs first. They include:

• Court filing fees and service costs
• Attorney fees and accounting fees
• Bond premiums (if the court requires a bond)
• Personal representative allowances under N.C. Gen. Stat. § 28A-15-1 (ncleg.gov)

North Carolina law (N.C. Gen. Stat. § 28A-23-1, ncleg.gov) allows the representative to pay these expenses before distributing assets.

Real Property Carrying Costs

While the estate holds real property, the personal representative must maintain its value. Typical carrying costs include:

• Property taxes and assessments
• Insurance premiums
• Routine maintenance and repairs
• Utilities and landscaping

These costs also qualify as expenses of administration. The representative should record each expense with receipts or invoices. Under N.C. Gen. Stat. § 28A-23-1, the court may approve payment of reasonable carrying costs from estate funds.

Recovering and Paying the Costs

To recover and pay both types of costs, a personal representative should:

1. Compile all bills, invoices, and receipts in a complete expense ledger.
2. File an inventory of estate assets with the clerk of superior court.
3. Submit a final account and request allowance of expenses and fees.
4. Obtain a court order approving payment of those expenses.
5. Pay approved amounts from estate bank accounts before distributing inheritances.

If personal property funds prove insufficient, North Carolina law permits payment of administration expenses and carrying costs from the proceeds of real property sales. See N.C. Gen. Stat. § 28A-23-4 (ncleg.gov).

2. Key Points to Remember

• Classify expenses as administration costs or real property carrying costs.
• Keep clear records of every payment and invoice.
• File inventories and final accounts promptly with the court.
• Request court approval before paying large expenses.
• Follow North Carolina statutes to protect your personal liability.

Need Help with Estate Administration?

Properly classifying and recovering estate and real property costs protects the estate and the personal representative. Our attorneys at Pierce Law Group guide you through every step of North Carolina probate. Contact us today to discuss your case. Email us at intake@piercelaw.com or call (919) 341-7055.