Dec312025
Probate Q&A Series

What happens if a power of attorney sold a parent’s house but never accounted for the money? – North Carolina

Short Answer

In North Carolina, a power of attorney (the “agent”) owes the parent (the “principal”) a fiduciary duty to act in the parent’s best interest, keep records, and be able to explain what happened to the sale proceeds. If the agent sold the parent’s house and cannot account for the money, that can support civil claims such as breach of fiduciary duty and conversion, and the court can order an accounting and repayment in the right case. After the parent’s death, the estate’s personal representative (executor) usually has the legal standing to pursue recovery for wrongdoing that happened during the parent’s lifetime.

Understanding the Problem

Under North Carolina probate and fiduciary rules, what happens when an agent acting under a power of attorney sells a parent’s house and then does not explain where the money went? The key decision point is whether the sale and the handling of the proceeds were done under valid authority and for the parent’s benefit, with proper records and a clear paper trail. When the parent has died, the question often becomes whether the estate can trace the sale proceeds and recover them for the people who inherit under the will.

Apply the Law

North Carolina treats a power of attorney agent as a fiduciary. That means the agent must act loyally for the parent’s benefit, avoid self-dealing conflicts, keep good records, and be prepared to account for transactions taken in the parent’s name. If the agent sold real estate and the proceeds cannot be traced to the parent’s expenses, accounts, or other parent-benefiting uses, the estate may have grounds to seek an accounting and pursue civil claims to recover the funds. The most common forum for estate-related disputes is the Clerk of Superior Court in the county where the estate is administered, although some claims may be filed in Superior Court depending on the issues and requested relief.

Key Requirements

  • Fiduciary duty (best-interest rule): The agent must act for the parent’s benefit, not the agent’s benefit, and must avoid self-dealing unless the power of attorney and the facts clearly support it.
  • Recordkeeping and ability to account: The agent should keep documents showing the authority to sell, the closing paperwork, where proceeds were deposited, and how proceeds were spent for the parent.
  • Proper handling of sale proceeds: Sale proceeds should be traceable to the parent’s accounts and parent-related expenses; unexplained transfers, gifts, or cash withdrawals can create liability exposure.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the parent died with a will and multiple properties, and a child suspects lifetime transfers or title changes and wants the share intended for siblings. If an agent sold a house during the parent’s lifetime, the central questions are whether the agent had authority to sell, whether the sale proceeds went to the parent (or were used for the parent’s benefit), and whether the agent kept records that can prove it. If the agent cannot produce closing documents, bank deposit records, and a clear spending trail tied to the parent, that fact pattern often supports a claim that the agent breached fiduciary duties and may have wrongfully taken estate assets.

Process & Timing

  1. Who acts first: Usually the estate’s personal representative (executor named in the will and appointed by the court). Where: The Clerk of Superior Court in the North Carolina county where the estate is opened. What: Open the estate (if not already opened) and gather core documents (power of attorney, deed history, closing file, bank records) to determine whether the house was sold, when, and where proceeds went. When: As soon as the concern is identified, because records can disappear and funds can be moved.
  2. Demand and accounting step: Counsel often sends a written demand for records and an explanation of the transaction (authority to sell, closing statement, deposit account, disbursements). If voluntary cooperation fails, the estate may seek a court-ordered accounting and related relief in the appropriate forum.
  3. Recovery step: Depending on what the records show, the estate may file civil claims to recover funds or property (for example, claims based on breach of fiduciary duty, conversion, or equitable remedies that trace and return misdirected proceeds). The goal is to bring the value back into the estate so it can be distributed under the will.

Exceptions & Pitfalls

  • Authority problems: A power of attorney can be broad, but it still has limits. If the document did not authorize the transaction, or if the agent acted outside the parent’s best interest, the agent can face civil liability even if a deed was recorded.
  • “It was a gift” defenses: Agents sometimes claim the parent intended the agent to keep proceeds or receive transfers. Courts often look for clear proof of intent and a clean paper trail; missing records and conflicted transactions can undermine that defense.
  • Standing and “who can sue”: After death, the executor usually must bring claims that belong to the estate. Individual heirs often cannot recover estate damages directly unless a court allows a different procedure.
  • Delay and lost evidence: Waiting can make it harder to subpoena closing files, bank records, and title history. Prompt action can also reduce the risk of further transfers.
  • Mixing funds: If proceeds were deposited into an agent’s personal account or mixed with other money, tracing becomes harder. It can still be possible, but it usually requires detailed bank records and careful analysis.

Conclusion

In North Carolina, a power of attorney agent must act in the parent’s best interest and keep records that show what happened to major assets like a house sale. If the agent sold the house and cannot account for the proceeds, the estate can often seek an accounting and pursue civil claims to recover misdirected funds so the will can be carried out. The most practical next step is to have the executor open (or confirm) the estate with the Clerk of Superior Court and promptly demand the closing file and bank records that show where the sale proceeds went.

Talk to a Probate Attorney

If a power of attorney sold a parent’s house and the money cannot be traced, our firm has experienced attorneys who can help review the documents, explain the probate process, and identify options to seek an accounting and 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.