Jan302026
Probate Q&A Series

What are our options if we don’t want to be landlords of a rental property in the trust while the trust or estate is being administered? – North Carolina

Short Answer

In North Carolina, co-trustees and personal representatives generally do not have to personally manage a rental property day-to-day while a trust or estate is being administered. Common options include hiring a property manager, selling the property (if allowed by the trust or estate authority), or distributing the property to beneficiaries so the beneficiaries decide whether to keep, sell, or rent it. If co-fiduciaries cannot agree, the Clerk of Superior Court can become the forum for resolving the dispute and approving a path forward.

Understanding the Problem

Under North Carolina probate and trust administration, co-trustees or other co-fiduciaries may need to decide what happens to a trust-owned rental property during administration when serving as “landlords” is not desired. The decision point is whether the fiduciaries must keep operating the rental as-is during administration, or whether they can take steps to reduce hands-on management by selling, delegating management, or moving the property out of the trust or estate through distribution.

Apply the Law

North Carolina law generally allows fiduciaries to manage, lease, and sell real property when the governing document and default fiduciary powers permit it, and it also allows fiduciaries to hire agents to help administer property. Co-trustees must also follow co-trustee decision rules, which can make rental-property decisions difficult when communication is strained. When co-fiduciaries reach an impasse, court involvement may be needed to protect the asset and move administration forward.

Key Requirements

  • Authority to act: The trust instrument (and, for estates, the estate administration authority) must allow the fiduciary to sell, lease, or otherwise manage the property, or the fiduciary may need court approval.
  • Fiduciary standard of care: Decisions must be made for the benefit of the beneficiaries, with reasonable care, and with attention to protecting the property and keeping good records.
  • Co-fiduciary decision-making: When there are co-trustees, the default rules can require joint decision-making, which means a “no” from one co-trustee can block a sale, a lease strategy, or even the selection of a manager unless a lawful delegation or court order applies.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, two siblings are acting as co-trustees/co-fiduciaries over multiple trusts and are also moving toward a full estate administration, but conflict makes joint decision-making hard. If the rental property is held in trust, the co-trustees typically need a workable way to (1) protect the property and keep income/expenses tracked, and (2) choose a lawful exit strategy such as delegation to a manager, sale, or distribution. If the co-fiduciaries cannot agree on a manager or a sale, court involvement may be the practical way to break the deadlock while still meeting fiduciary duties.

Process & Timing

  1. Who acts: The co-trustees for trust-owned property; the personal representative for estate-owned property. Where: For disputes and approvals, the Clerk of Superior Court in the county with the estate file (and, for real property disputes like partition, Superior Court in the county where the land is located). What: A written plan and engagement letter for a property manager, or a listing agreement and sale contract, or a proposed distribution agreement/deed; if there is a deadlock, a petition/motion asking the court for instructions or approval. When: As soon as practical after identifying that ongoing landlord duties are creating risk, because vacancies, repairs, insurance issues, and tenant disputes can quickly become fiduciary problems.
  2. Stabilize the property first: Confirm insurance coverage, confirm who is collecting rent, separate trust/estate funds from personal funds, and set up consistent recordkeeping for rent, repairs, and vendor payments. If a manager is hired, define authority (leases, repairs, spending limits) and require regular reporting.
  3. Choose an exit path: If the document and circumstances support it, sell the property and hold proceeds for later distribution; or distribute the property to beneficiaries (in kind) so the beneficiaries decide whether to keep it; or, if co-owners will not cooperate after distribution, consider a partition action as a last resort to force a sale or division under court supervision.

Exceptions & Pitfalls

  • Deadlock between co-trustees: Even a sensible plan (hire a manager, sell, or distribute) can stall if the co-trustees must act jointly and one refuses. In that situation, the practical “option” may be a court petition for instructions, approval, or other relief to protect the property and beneficiaries.
  • Informal management without documentation: Allowing one sibling to “just handle it” without clear delegation, written authority, separate accounts, and reporting can create later disputes about missing rent, repairs, or favoritism.
  • Self-dealing and conflicts: Renting to relatives, using preferred vendors, or paying oneself for management can trigger conflict-of-interest claims unless the trust authorizes it or beneficiaries properly consent after full disclosure.
  • Distribution creates co-ownership problems: Distributing the property to beneficiaries can remove landlord duties from fiduciaries, but it can also create a new problem: beneficiaries become co-owners and may still disagree. If they cannot agree, partition under Chapter 46A may become the mechanism to force a resolution.

For additional background on handling disputes and property decisions during administration, see co-trustee disagreements about selling or keeping rental property and selling or dividing trust-owned properties when co-trustees are in conflict.

Conclusion

In North Carolina, fiduciaries usually have practical alternatives to personally acting as landlords during trust or estate administration, including hiring a property manager, selling the property, or distributing it to beneficiaries so the beneficiaries decide what to do next. The key constraints are fiduciary duties, the authority granted by the trust/estate, and co-fiduciary decision rules. If co-fiduciaries cannot agree, the next step is to file a request with the Clerk of Superior Court for instructions or approval before the property’s condition, tenants, or finances create avoidable risk.

Talk to a Probate Attorney

If you’re dealing with a trust or estate that owns a rental property and the co-fiduciaries do not want ongoing landlord responsibilities, our firm has experienced attorneys who can help explain options, reduce risk, and map out 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.

Category: Probate Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.