Dec302025
Probate Q&A Series

If my sibling misused a power of attorney before death, can the estate recover assets, and what kind of attorney handles that? – North Carolina

Short Answer

Yes. In North Carolina, if a power of attorney agent used the principal’s money for the agent’s own benefit (or otherwise failed to act in the principal’s best interest), the estate—usually through the personal representative—can often pursue recovery after death. These cases commonly involve claims for breach of fiduciary duty and recovery of specific property or funds, sometimes through an estate proceeding before the Clerk of Superior Court and sometimes through a civil lawsuit in Superior Court. The right lawyer is typically a probate/estate litigation attorney (often called a fiduciary litigation attorney) who handles power of attorney abuse and estate disputes.

Understanding the Problem

In North Carolina, the question is whether an estate can take action after a death when a sibling, acting as agent under a power of attorney, controlled an older adult’s finances during a period of dementia and is suspected of improper transactions or document changes. The decision point is whether the agent’s conduct crossed the line from permitted management into misuse of authority, such as self-dealing, improper gifts, or moving assets into forms that bypass the estate. The related concern is which type of attorney typically handles the recovery process and the forum where the dispute is usually addressed.

Apply the Law

Under North Carolina law, a power of attorney creates an agency relationship where the agent (attorney-in-fact) must act as a fiduciary for the principal. That fiduciary role generally requires the agent to act in the principal’s best interest, manage the principal’s property responsibly, keep records, and avoid conflicts of interest and self-dealing unless clearly authorized. When the principal dies, the power of attorney authority ends, and the estate’s personal representative (executor/administrator) typically becomes the person with legal authority to investigate what happened and, if appropriate, pursue recovery for the estate.

Key Requirements

  • Fiduciary duty and best-interest conduct: The agent must manage the principal’s assets for the principal’s benefit, not the agent’s benefit, and must avoid self-dealing and conflicts of interest.
  • Identifiable misuse or improper transfer: The estate generally needs to show that money or property was misappropriated, improperly gifted, converted, or transferred into a form that wrongfully deprived the principal (and later the estate) of the asset.
  • Proper party and forum: The personal representative usually brings the claim, either in an estate proceeding (often before the Clerk of Superior Court) or in a Superior Court civil action, depending on the remedy needed and the type of asset.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the concern is that a sibling obtained a power of attorney when the principal had dementia and then controlled finances and decisions. If the agent used the principal’s funds for the agent’s own benefit, made questionable “gifts,” changed ownership on accounts, or failed to keep records and act in the principal’s best interest, those facts can support a claim that the agent breached fiduciary duties and that the estate should be repaid. If the agent also arranged account changes that bypass the estate (for example, survivorship or beneficiary designations), the estate may still have recovery options, but the forum and claims may differ depending on what was changed and when.

Process & Timing

  1. Who files: Usually the personal representative (executor/administrator) of the estate. Where: Often starts as an estate proceeding before the Clerk of Superior Court in the county where the estate is administered; some disputes (especially those needing broader remedies) may be filed or transferred to Superior Court. What: Commonly a verified petition in the estate file seeking examination of a person believed to possess estate property, and/or a civil complaint alleging fiduciary misconduct and seeking recovery. When: As soon as practical after appointment of the personal representative, because delays can make tracing and recovery harder and may create statute-of-limitations problems.
  2. Information-gathering and preservation: The personal representative typically collects bank records, signature cards, beneficiary change forms, and transaction histories; requests an accounting; and identifies whether assets were moved into joint accounts with survivorship or payable-on-death designations. In some cases, counsel sends written notices to financial institutions to help prevent further movement of funds while the dispute is evaluated.
  3. Recovery path: If the evidence shows estate property is being held by the agent or another person, the estate can seek an order requiring return of property or funds, or pursue civil claims for repayment and related equitable remedies. If the dispute becomes complex or contested, it may proceed like standard litigation with discovery, motions, and (sometimes) trial.

Exceptions & Pitfalls

  • “It was authorized” defenses: Agents often argue the power of attorney allowed gifts or transfers, or that the principal intended the transactions. Clear documentation and timing (especially around worsening dementia) often becomes central.
  • Joint accounts and beneficiary changes: Moving money into joint-with-right-of-survivorship accounts or changing beneficiaries can remove assets from the probate estate. The estate may still challenge the transaction as wrongful, but the strategy may differ from ordinary “estate asset” recovery.
  • Bank notice rules: Even when an agent acted improperly, a financial institution may be protected for honoring a power of attorney before it received notice of death or termination, shifting the focus to claims against the agent rather than the bank.
  • Standing and “who is the client” issues: A beneficiary’s suspicions matter, but the personal representative usually controls estate claims. If the suspected wrongdoer is also the personal representative, the estate may need a different fiduciary appointed or court intervention.
  • Delay and missing records: These cases often turn on paper trails. Waiting can mean records get harder to obtain, funds get spent, and tracing becomes more difficult.

Conclusion

In North Carolina, when a sibling acting under a power of attorney misused authority—such as self-dealing, improper gifts, or other actions not in the principal’s best interest—the estate can often pursue recovery after death through the personal representative. The usual next step is for the personal representative to gather records and file the appropriate verified petition or civil action in the estate proceeding (and, if needed, Superior Court) promptly after appointment to preserve evidence and recovery options.

Talk to a Probate Attorney

If a family member used a power of attorney and there are concerns about missing funds, questionable transfers, or last-minute document changes, a probate and fiduciary litigation attorney can help explain the options, the proper forum, and the timelines for recovery. 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: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.