Who is authorized to request or receive escrowed funds when the decedent’s share is part of an estate? – North Carolina

Short Answer

In North Carolina, the person authorized to request or receive escrowed sale proceeds that belong to a decedent’s estate is usually the court-appointed personal representative (executor or administrator) acting under Letters Testamentary or Letters of Administration. In limited situations, a small-estate affiant or a person acting under a court order may also be able to receive certain assets. Until proper authority is shown, an escrow agent typically should not release the decedent’s share to heirs, family members, or a lawyer who is not acting for the appointed personal representative.

Understanding the Problem

In a North Carolina probate administration, who can ask an escrow holder to release the decedent’s share of real-estate sale proceeds when the decedent owned only a partial interest? When another law firm calls to coordinate release of escrowed funds, the key decision point is whether that caller can show legally recognized authority to act for the estate (or for a legally authorized alternative). The question focuses on who may request or receive the funds, not on how the out-of-state closing was handled.

Apply the Law

Under North Carolina estate administration practice, the personal representative (often called the PR) is the fiduciary appointed by the Clerk of Superior Court to gather estate assets, safeguard them, and use them to pay valid expenses and claims before distributing what remains to the proper beneficiaries. When the decedent’s share of sale proceeds is being held in escrow, the escrow holder commonly asks for proof of authority (typically certified Letters) before releasing funds. If the PR lacks authority over a particular asset or there is a dispute about control, the Clerk of Superior Court can issue orders that clarify who may take possession or receive property for administration.

Key Requirements

Valid estate authority: A court appointment as executor/administrator (or another recognized authority such as a small-estate affidavit or a court order) must exist before someone can act as the estate’s representative for collecting funds.
Proper proof to the escrow holder: The requesting party must provide documentation the escrow agent can rely on (most often certified Letters and written instructions identifying where the funds should be sent).
Correct payee and handling: The decedent’s share should be payable to the estate (or to the PR in a fiduciary capacity) unless a specific exception applies, so the funds can be accounted for and administered through the North Carolina estate.

What the Statutes Say

N.C. Gen. Stat. § 36F-8 (Disclosure to personal representative; proof of authority) – An example of North Carolina law requiring a custodian to receive a written request plus certified Letters (or other listed authority) before disclosing or turning over certain assets to a personal representative.

Analysis

Apply the Rule to the Facts: The facts describe sale proceeds held in escrow that relate to the decedent’s partial ownership interest, while a North Carolina estate is being administered. Under North Carolina practice, the party with clear authority to request and receive the decedent’s share is the court-appointed personal representative, because that person is responsible for collecting estate assets and accounting for them in the estate administration. If a different law firm is calling, the practical question is whether that firm represents the appointed personal representative and can provide current, certified Letters (or a court order) showing authority to direct the escrow release.

Process & Timing

Who files: The person seeking authority to act for the estate (executor named in a will, or an administrator if there is no will). Where: The Clerk of Superior Court in the North Carolina county where the estate is being administered. What: Qualification paperwork that results in issuance of Letters Testamentary or Letters of Administration. When: Before attempting to collect or direct release of estate funds held by third parties.
Coordinate with the escrow holder: The personal representative (or the PR’s attorney) provides written instructions and proof of authority (commonly certified Letters). The escrow holder may also request an estate EIN and wiring details for an estate account so the funds are not paid to an individual.
Account for the funds in the estate: Once received, the personal representative deposits the proceeds into an estate account and later reports the receipt and disbursement through the estate’s required accountings, paying allowed expenses/claims before distributing any remainder.

Exceptions & Pitfalls

Heirs are not automatically authorized: Even if heirs ultimately inherit, an escrow holder generally should not release the decedent’s share directly to heirs while a North Carolina estate is being administered, because the funds may be needed to pay estate obligations and must be properly accounted for.
“Attorney request” is not the same as authority: A law firm’s call is not, by itself, legal authority. The escrow holder typically needs proof that the firm represents the appointed personal representative and that the personal representative is directing the release.
Real-estate vs. proceeds confusion: North Carolina real property often passes to heirs/devisees at death subject to administration needs, but sale proceeds attributable to the decedent’s interest are commonly treated as an estate asset that should be collected and administered through the PR, especially when the PR must ensure debts, expenses, and required filings are handled.
Documentation problems: Escrow agents and financial institutions often require recently certified Letters and may reject informal copies. Planning for that paperwork early can prevent closing and disbursement delays.

Conclusion

In North Carolina, escrowed sale proceeds tied to a decedent’s ownership interest are typically requested and received by the court-appointed personal representative (executor or administrator), acting under Letters Testamentary or Letters of Administration, so the funds can be deposited, accounted for, and administered before distribution. The most important next step is to confirm the estate has an appointed personal representative and then provide the escrow holder with written instructions and certified Letters before any release is made.

Talk to a Probate Attorney

If a law office or title agency is holding a decedent’s share of sale proceeds in escrow and there is uncertainty about who can direct the release, our firm has experienced attorneys who can help clarify authority, documentation, and timing under North Carolina probate practice. 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.