Detailed Answer
When someone dies owning real property that enters probate, a personal representative must handle any unpaid property taxes. Under North Carolina law, state and local property taxes are priority claims. The personal representative pays these taxes from estate funds before distributing assets to heirs or beneficiaries.
North Carolina treats property taxes as a lien on real estate until payment. N.C. Gen. Stat. § 105-322 establishes that counties hold a lien for unpaid taxes and may enforce it. The personal representative must ensure timely payment to avoid penalties and foreclosure risk.
Assets held in joint tenancy with rights of survivorship pass automatically to the surviving owner. That owner then bears responsibility for ongoing property taxes and any unpaid taxes up to the date of death. No portion of the property enters estate funds for probate. In contrast, real property held as tenants in common or solely by the decedent passes through probate. The estate covers taxes on the decedent’s share while the asset remains in probate.
North Carolina’s probate claims statute, N.C. Gen. Stat. § 28A-21-4, lists state and local taxes as Class D claims. The personal representative must present these claims to the clerk and pay them in due course. If estate funds fall short, the representative may need to sell estate assets or seek court guidance before distribution.
Key Takeaways
- Property taxes on estate real estate are priority claims under N.C. Gen. Stat. § 28A-21-4.
- Counties hold a lien on real property for unpaid taxes per N.C. Gen. Stat. § 105-322.
- Surviving joint tenants handle ongoing and past-due taxes on jointly owned property.
- The estate pays taxes on property held solely or as tenants in common by the decedent.
- The personal representative must settle tax claims before distributing estate assets.
Property taxes play a critical role in estate administration. A personal representative must address tax liens promptly. If you need guidance on managing property taxes in a North Carolina probate estate, contact Pierce Law Group. Our attorneys have deep experience in probate administration. Email us at intake@piercelaw.com or call (919) 341-7055 to schedule a consultation.
