Detailed Answer

When estate funds disappear during a real estate closing, a personal representative must act quickly. North Carolina law holds fiduciaries to strict duties. You must protect the estate from further loss and seek recovery.

1. Confirm and Document the Loss

Review closing statements, bank records and escrow instructions. Save all closing documents, email correspondence and wire transfer confirmations. Detailed documentation supports any claim you file.

2. Notify Interested Parties and the Court

Inform heirs, devisees and creditors about the missing funds. File a notice with the clerk of superior court where the estate is open. This puts everyone on record and preserves their rights.

3. File a Claim on the Fiduciary Bond

Every personal representative must post a bond under N.C.G.S. § 28A-16-1. If you posted bond, notify the surety in writing and submit your supporting documents. The surety must respond to a valid claim for misappropriated funds.

4. Petition for Surcharge and Removal

If you suspect intentional misconduct, petition the clerk of superior court for a surcharge under N.C.G.S. § 28A-13-6. The court can hold the wrongdoer liable for the loss. You may also seek removal of any fiduciary who caused the misappropriation.

5. Seek an Accounting and Injunctive Relief

Demand an accounting from the fiduciary who handled the closing. Under N.C.G.S. § 28A-13-4, the court can order detailed financial reports. If the estate faces ongoing risk, petition the court for an injunction to stop further distributions.

6. Consider Criminal and Civil Actions

Misappropriation at closing may involve embezzlement or fraud. You can report the conduct to law enforcement. At the same time, file a civil lawsuit against the responsible party to recover damages and attorney’s fees.

Key Steps at a Glance

• Gather and preserve all closing documents and communications.
• Notify heirs, creditors and the clerk of superior court promptly.
• Submit a claim against the personal representative’s bond (N.C.G.S. § 28A-16-1).
• File a petition for surcharge and removal (N.C.G.S. § 28A-13-6).
• Request an accounting and injunctive relief (N.C.G.S. § 28A-13-4).
• Evaluate criminal referrals and civil lawsuits for full recovery.

Need Help Protecting Estate Assets?

Misappropriated funds can derail an estate administration. Pierce Law Group has attorneys with extensive probate experience ready to guide you through every step. Contact us today to protect your clients and the estate. Email us at intake@piercelaw.com or call us at (919) 341-7055.