Quick Answer
In North Carolina, when a life-insurance policy has no living or named beneficiary, the proceeds are paid to the decedent’s estate. The personal representative (executor or administrator) must collect the funds, pay estate debts in the statutory order, and distribute what is left to heirs under the will or the intestacy statutes. If the personal representative drags their feet or refuses to act, any heir or creditor may ask the Clerk of Superior Court to compel an accounting, force collection of the insurance, or even remove and replace the representative.
Detailed Answer
1. Why the money falls into probate
Under N.C. Gen. Stat. § 58-58-100, if a policy has no beneficiary, or the beneficiary predeceased the insured and no contingent beneficiary was named, the insurer must pay the proceeds to “the personal representative of the insured.” The funds then become a probate asset like any other cash item.
2. Opening or re-opening the estate
- File an Application for Probate (§ 28A-6-1) in the county where the decedent lived.
- The Clerk issues Letters Testamentary (if there is a will) or Letters of Administration (no will). These documents give the personal representative legal authority to collect the insurance.
3. Collecting the proceeds
- Send the insurer a certified copy of the death certificate and the Letters.
- Complete the insurer’s claim form. Funds should be deposited into the estate checking account—not a personal account.
4. Paying debts before distribution
Because the money is now an estate asset, it is not exempt from creditors. The personal representative must pay claims in the priority listed in § 28A-19-6, such as administrative costs, funeral expenses, taxes, and valid medical bills.
5. Distributing what remains
- If a will exists, distribute according to its terms.
- If no will exists, heirs take shares set out in § 29-14 and related intestacy statutes.
6. Enforcing action when the representative will not act
Hypothetical: Kim dies with a $250,000 policy but left no beneficiary. Her brother, Joe, is the administrator but has not filed the claim. As Kim’s adult daughter, Maya may:
- Demand an accounting under § 28A-21-3. The Clerk can order Joe to file a sworn inventory and periodic accountings.
- Petition to compel performance (§ 28A-13-3(22)). The Clerk may issue an order directing Joe to collect the insurance within a set time.
- Seek removal and replacement for mismanagement or failure to act under § 28A-9-6.
- File a civil action against the insurer only if the company refuses to honor a proper claim.
7. Deadlines and practical tips
- Most insurers pay within 30 days of receiving complete paperwork.
- The estate’s final account cannot be filed until the proceeds have been collected and distributed.
- Heirs usually have standing to act as soon as 90 days have passed without activity, but earlier court intervention is possible when there is clear delay.
Helpful Hints
- Keep a copy of every letter sent to the insurer and the Clerk.
- Ask the insurer to confirm in writing that no beneficiary is on file.
- Open a dedicated estate bank account—do not commingle funds.
- Track claim deadlines and creditor notice periods to avoid personal liability.
- Consider a disclaimer if an heir wants the proceeds to pass to the next generation (§ 31B-2).
Take the Next Step
Uncollected life-insurance proceeds can stall probate and leave heirs short-changed. Our North Carolina probate team has handled countless estates and knows how to force action, protect heirs, and move cases forward. Call us today at (919) 341-7055 to schedule a consultation.
