What can I do to get an annuity released if the company is requiring a doctor’s competency letter? – North Carolina

Short Answer

In North Carolina, an annuity company can refuse to release funds if it believes the owner cannot legally authorize the transaction and it wants medical proof of capacity. The fastest path is often to provide a written statement from the attending physician that addresses capacity in plain terms and matches what the company is asking for. If a doctor will not provide a letter, or the company still refuses, the next step is usually a clerk of superior court proceeding for a limited protective order (a single transaction) or, if needed, a guardianship case.

Understanding the Problem

In North Carolina probate and fiduciary matters, what can be done when an annuity owner (or someone trying to act for the owner) needs an annuity released, but the annuity company will not process the request unless it receives a doctor’s competency letter? Can the annuity be released without a guardianship, and if not, what court process allows a person to complete a single annuity transaction when capacity is in question?

Apply the Law

Capacity issues often come up with annuities because the company must confirm that the person authorizing a withdrawal, surrender, beneficiary change, or rollover has legal authority to do so. Under North Carolina law, when a person may be incompetent and needs help with a specific financial transaction, the clerk of superior court can sometimes authorize a single protective arrangement or single transaction without appointing a full guardian. If the situation requires a medical determination of incapacity for a legal purpose, North Carolina law also describes what a physician’s written determination should include (in writing, to a reasonable degree of medical certainty, and describing cause, nature, extent, and probable duration).

Key Requirements

• Proof of authority to act: The annuity company typically needs proof that the person signing has legal power to act (the owner acting with capacity, an agent under a valid power of attorney, or a court-authorized fiduciary).
• Medical support when capacity is questioned: If the company questions capacity, it may request a physician’s written statement addressing whether the person can understand and make the decision involved in the annuity transaction.
• Correct court remedy if a letter is not available or not enough: When capacity is genuinely in doubt, a clerk of superior court proceeding may be needed—either a limited “single transaction” order or a guardianship case—so the transaction can be completed lawfully.

What the Statutes Say

• N.C. Gen. Stat. § 35A-1121 (Single protective arrangement/single transaction) – Allows the clerk of superior court, in a proper proceeding, to authorize a one-time transaction (including payment or delivery of funds and transactions involving annuities) without appointing a continuing guardian.
• N.C. Gen. Stat. § 35A-1375 (Physician determination of incapacity/debilitation) – Describes what a physician’s written determination should include when incapacity is being determined for legal purposes under that Article.

Analysis

Apply the Rule to the Facts: The annuity company is requiring a doctor’s competency letter, which signals it is not satisfied that the annuity owner can legally authorize the release (or that the person requesting the release has authority to act). If an attending physician can provide a written statement that clearly addresses the owner’s ability (or inability) to make financial decisions, that may satisfy the company’s internal requirements. If a physician will not provide a letter, or the company still refuses to release funds, North Carolina law provides a court-based option to authorize a one-time annuity transaction through the clerk of superior court, and a broader guardianship case may be necessary if ongoing decision-making help is needed.

Process & Timing

1. Who files: Typically a family member, caregiver, or other interested person (or an existing fiduciary/agent, depending on the situation). Where: The Office of the Clerk of Superior Court in the county where the annuity owner lives (or where the guardianship/protective proceeding is properly filed in North Carolina). What: A petition/request asking the clerk to authorize a single protective arrangement or single transaction involving the annuity under North Carolina law; supporting documents often include the annuity company’s written requirements and a physician statement if available. When: As soon as the annuity company refuses to process the transaction without medical proof or court authority; timing can vary by county and the urgency shown in the filing.
2. Next step: The clerk reviews the request and supporting evidence and may set a hearing or require additional documentation. If the clerk concludes a basis exists for guardianship but a full guardianship is not necessary to complete the specific annuity transaction, the clerk may authorize the single transaction and may appoint a temporary guardian or special fiduciary limited to that task.
3. Final step: The signed clerk’s order is provided to the annuity company as the legal authority to complete the release or other approved transaction, and the appointed fiduciary (if any) completes the transaction and reports back as required by the order.

Exceptions & Pitfalls

• Mismatch between what the company wants and what the doctor writes: A vague note like “patient has dementia” may not address the specific issue (capacity to understand and authorize a financial transaction). A stronger letter usually states the opinion clearly, is in writing, and explains the nature and expected duration of the impairment.
• Assuming “probate” automatically controls the annuity: Many annuities pass by beneficiary designation and are not controlled by an estate personal representative. Even so, the company can still require proof of authority and identity before paying or releasing funds.
• Using the wrong court tool: A full guardianship can be more involved than necessary when the goal is only one annuity transaction. North Carolina’s single-transaction procedure may fit better when the need is narrow and time-sensitive.
• Power of attorney limitations: Even with a power of attorney, an annuity company may question whether the agent has authority for the specific annuity action or whether the owner had capacity when signing. That can trigger the request for medical proof or a court order.
• Incomplete supporting documents: Companies commonly require specific claim/withdrawal forms, identity verification, and sometimes certified records. Missing paperwork can look like a capacity issue and slow the release.

Conclusion

In North Carolina, when an annuity company requires a doctor’s competency letter, the practical options are (1) obtain a clear written statement from the attending physician addressing capacity in a way the company can rely on, or (2) seek a clerk of superior court order authorizing a single protective arrangement or single transaction if capacity is in doubt or a letter is not available. The most important next step is to file the appropriate request with the Office of the Clerk of Superior Court promptly once the company refuses to release the annuity without medical proof or court authority.

Talk to a Probate Attorney

If an annuity company is refusing to release funds unless it receives a doctor’s competency letter, our firm has experienced attorneys who can help evaluate whether a physician statement, a single-transaction clerk’s order, or a guardianship filing fits the situation and the timeline. 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.