Short Answer

In North Carolina, Part 1 of the Inventory (AOC-E-505) lists probate assets the personal representative controls and can use to pay claims, such as sole-name bank accounts, undeposited checks, vehicles titled only in the decedent’s name, and savings bonds without a beneficiary. Part 2 lists assets that pass at death to someone else but can be pulled back to pay debts if the estate is short, like joint accounts with survivorship and transfer-on-death securities. Most beneficiary-designated retirement accounts and life insurance are not inventoried at all.

Understanding the Problem

In North Carolina probate, the executor must file an Inventory (AOC-E-505) with the Clerk of Superior Court and correctly separate assets between Part 1 (property of the estate) and Part 2 (property that can be added to the estate, if needed, to pay claims). You’ve opened probate and set up an estate account while the 90-day creditor notice runs. The goal is to classify each asset accurately so the clerk, creditors, and heirs understand what is available to pay claims and what is not.

Apply the Law

North Carolina splits inventory assets into: (1) property already in the personal representative’s hands to pay claims and expenses (Part 1), and (2) property that passed to others at death but can be brought back if estate assets are insufficient (Part 2). Date-of-death value applies. File the Inventory within three months after qualification in the county Clerk of Superior Court where the estate is administered. Non-probate assets that generally cannot be recovered to pay claims are not listed on the Inventory.

Key Requirements

• Correct classification: Put probate, controllable assets in Part 1; list only recoverable, nonprobate assets in Part 2.
• Exclude true non‑probate benefits: Do not list beneficiary‑designated retirement plans or life insurance unless payable to the estate.
• Date‑of‑death valuation: Use fair market value as of the date of death; be ready to show statements or appraisals.
• Support ownership status: Be prepared to document survivorship or beneficiary designations (e.g., signature cards, account terms, TOD registrations).
• Deadline and forum: File AOC‑E‑505 with the Clerk of Superior Court within three months after qualification; request a short extension if needed.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-20-1 (Inventory due in 3 months) – requires a just and true inventory of the decedent’s property as of death.
• North Carolina Gen. Stat. § 28A-15-10 (Assets recoverable to pay claims) – identifies nonprobate assets that can be added back if the estate is insufficient.
• North Carolina Gen. Stat. § 41-2.1 (Joint accounts with survivorship) – explains survivorship accounts and when they may be reached for claims.
• North Carolina Gen. Stat. § 28A-15-2 (Real property vests at death) – states that real estate generally vests in heirs/devisees and is not in the PR’s hands unless lawfully brought under administration.

Analysis

Apply the Rule to the Facts: Cash in the decedent’s sole-name accounts and a vehicle titled only to the decedent belong in Part 1. Joint bank accounts with right of survivorship belong in Part 2 because they pass to the co-owner but can be reached if estate assets are insufficient. Retirement accounts with a named beneficiary are generally not listed on the Inventory at all. A savings bond with no beneficiary is a probate asset and goes in Part 1. The vacant house is typically listed in Part 2 unless the personal representative has legal authority to take possession and control.

Process & Timing

1. Who files: The executor or administrator. Where: Estates Division of the Clerk of Superior Court in the county of administration. What: Inventory for Decedent’s Estate (AOC‑E‑505) with date‑of‑death statements, titles, and any appraisal details. When: File within three months after qualification.
2. Identify title and beneficiary status for each asset (sole name, joint without survivorship, joint with survivorship, POD/TOD). Gather date‑of‑death bank/brokerage statements, vehicle title info, and any support for survivorship or beneficiary designations. Some counties may ask for signature cards or account agreements.
3. Submit the completed Inventory; the clerk files it and may assess fees based on personal property administered. Keep documentation for later accountings and any reimbursements you will pay from the estate account after the claim period.

Exceptions & Pitfalls

• Do not list true non‑probate benefits in Part 2: Retirement accounts and life insurance payable to a named beneficiary are generally excluded from the Inventory; list them only if payable to the estate.
• Joint ownership nuance: Joint accounts without survivorship and payable‑to‑estate assets belong in Part 1; only survivorship or TOD securities that are statutorily recoverable belong in Part 2.
• Real property placement: Sole‑owned real estate is usually Part 2 unless the will or a court order places it under the personal representative’s possession and control (then Part 1).
• Use date‑of‑death values: Avoid current balance values; use statements as of death. If still valuing, note “undetermined” and follow up with a supplemental inventory.
• Expenses are not inventory: Funeral, legal fees, utilities, and insurance on a vacant home are administrative expenses recorded in accountings, not on the Inventory. Reimburse family only from the estate account and keep receipts.

Talk to a Probate Attorney

If you’re sorting out what belongs in Part 1 versus Part 2 of the North Carolina probate inventory, our firm can help you classify assets, meet deadlines, and avoid common pitfalls. Call us today to discuss your options and timelines.

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.