Dec262025
Probate Q&A Series

Who is responsible for issuing the 1099 if an account changed custodians during the tax year, and how do I make sure the estate receives all required forms? – North Carolina

Short Answer

In North Carolina estate administration, the financial institution (the “payer”) that actually paid the taxable income is generally the one responsible for issuing the related Form 1099 for that portion of the year. When an account changes custodians mid-year, it is common for the estate to receive more than one 1099 for the same account—one from the prior custodian for the pre-transfer period and one from the new custodian for the post-transfer period. To make sure the estate receives all required forms, the personal representative should promptly put both custodians on written notice of the estate’s mailing address and taxpayer identification number (EIN) and request year-end tax reporting confirmation.

Understanding the Problem

In North Carolina probate, a personal representative often must figure out who “issues the 1099” when a decedent’s brokerage or bank account moves from one custodian to another during the same tax year. The key issue is whether the 1099 should come from the first custodian, the second custodian, or both, and what steps the personal representative must take so the estate receives the complete set of year-end tax forms needed to prepare the decedent’s final returns and the estate’s fiduciary income tax returns.

Apply the Law

North Carolina probate law puts the personal representative in charge of taking custody of estate assets, collecting income due to the estate, and keeping complete records for required reports and accountings filed with the Clerk of Superior Court. In practice, those duties include tracking income statements and tax reporting from every institution that held estate assets during the year. Separately, federal tax reporting rules generally require the “payer” (such as a bank or broker) to issue information returns like Forms 1099 for amounts that payer actually credited or paid during the year; when custody changes mid-year, that often means multiple payers and multiple forms.

Key Requirements

  • Identify each payer during the year: When a bank/brokerage relationship changes mid-year, each institution may have paid interest, dividends, or proceeds during its part of the year, and each may issue its own 1099 reporting only what it paid.
  • Use the correct taxpayer identification number for the estate: The estate is a separate taxpayer during administration, so accounts should generally report under the estate’s EIN (not the decedent’s Social Security number) once an estate account is opened.
  • Maintain records to support the estate’s accountings and returns: The personal representative should keep statements and confirmations that show the transfer date and the income credited before and after the transfer so nothing is missed or double-counted.

What the Statutes Say

Analysis

Apply the Rule to the Facts: With no specific facts provided, a typical example is a decedent’s investment account that moved from Custodian A to Custodian B in June. Custodian A would usually issue 1099 forms for interest/dividends and other reportable items it credited or paid before the transfer date, and Custodian B would usually issue 1099 forms for items it credited or paid after the transfer date. The personal representative’s job is to confirm the transfer date, confirm the taxpayer ID and mailing address on file at both custodians, and then reconcile both sets of forms to the account statements so the estate’s reporting is complete and consistent.

Process & Timing

  1. Who files: No filing is required to “get a 1099,” but the personal representative must request and track the forms. Where: With each custodian’s estate or decedent-services department (and, if needed, the account’s prior custodian as shown on old statements). What: A written request that confirms (a) the date the account transferred, (b) the last four digits of the account, (c) the tax year, (d) the estate mailing address, and (e) the correct taxpayer identification number (often an EIN for an estate account). When: As soon as the personal representative is appointed and again in early January to confirm year-end tax reporting.
  2. Reconcile forms to statements: Match each 1099 to monthly/quarterly statements from each custodian and confirm that all common forms are covered (often 1099-INT, 1099-DIV, 1099-B, and, for retirement distributions, 1099-R). If a form is missing or shows the wrong taxpayer ID, request a corrected form (“corrected 1099”) in writing.
  3. Use the forms for required returns and records: Provide the full set of tax forms to the estate’s CPA or attorney preparing the decedent’s final income tax return and any estate fiduciary income tax returns (often federal Form 1041 and North Carolina fiduciary return when required). Keep copies with the estate records so the information lines up with the estate’s required accountings.

Exceptions & Pitfalls

  • Forms issued under the wrong taxpayer ID: After death, an institution may continue reporting under the decedent’s Social Security number unless the account is properly converted to an estate account and updated with the estate’s EIN and a Form W-9. That mismatch can cause missing forms, duplicate forms, or IRS matching notices.
  • “Consolidated 1099” confusion: Brokerages often issue one consolidated packet that includes several sub-forms. When there are two custodians, there may be two consolidated packets, and both must be reviewed.
  • Missing the prior custodian after a transfer: After a custodian change, online access and statements for the prior custodian can disappear. The personal representative should download statements before access ends and request year-end tax reporting in writing.
  • Double-counting after transfer: Dividend and interest accruals around a transfer date can appear on one custodian’s final statement and on the other custodian’s first statement. Reconciling by the actual “paid/credited” dates shown on the 1099 and statements helps avoid reporting the same income twice.
  • Recordkeeping gaps affect probate reporting: Even though the 1099 is a federal tax form, incomplete records can create problems when preparing estate accountings for the Clerk of Superior Court.

Conclusion

When an account changes custodians during the year, the institution that paid or credited the taxable income generally issues the corresponding 1099 for that period, so the estate may receive forms from both the old and new custodian. In North Carolina, the personal representative should treat this as a recordkeeping and reconciliation task tied to required estate reporting. A practical next step is to send a written request to each custodian confirming the transfer date, estate mailing address, and the estate EIN so year-end tax forms are issued correctly.

Talk to a Probate Attorney

If a decedent’s financial accounts changed custodians and the estate needs complete and correct 1099 reporting for tax returns and estate accountings, our firm has experienced attorneys who can help explain the steps, paperwork, and timelines. 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.