Dec32025
Surplus Funds Q&A Series

Can I use my power of attorney to hire a lawyer and file to collect the surplus for my parent? – North Carolina

Short Answer

In North Carolina, an agent under a properly drafted and signed power of attorney can usually hire a lawyer and file a claim to collect foreclosure or execution surplus funds for the parent, as long as the document clearly authorizes handling claims, litigation, and receipt of money. The clerk of superior court will look to the actual wording of the power of attorney and may require the original or a certified copy. If the authority is unclear or too limited, the clerk or court may refuse to recognize the agent for this purpose, and a new power of attorney or guardianship may be needed.

Understanding the Problem

The narrow question is whether, under North Carolina law, a person holding a parent’s power of attorney can use that document to hire an attorney and file the necessary paperwork to claim surplus funds being held after a foreclosure or other court-ordered sale. This comes up when property is sold, the debt and costs are paid, and the remaining surplus is paid into the clerk of superior court to be held for whoever is legally entitled to it. The decision point is whether the power of attorney gives the agent enough legal authority to act in the parent’s place to pursue and receive those surplus funds in a special proceeding before the clerk of superior court.

Apply the Law

North Carolina law allows surplus funds from foreclosure or execution sales to be paid to the clerk of superior court and then claimed through a special proceeding to determine who is entitled to them. At the same time, North Carolina’s power of attorney laws permit an agent to act for the principal within the scope of the authority granted in the document, which can include pursuing claims, engaging lawyers, and receiving money. The key questions are what the power of attorney actually says, whether it complies with North Carolina’s formal requirements, and whether the clerk is satisfied that the agent’s authority covers filing and resolving a surplus-funds proceeding.

Key Requirements

  • Valid North Carolina-compliant power of attorney: The parent must have signed a power of attorney that meets North Carolina’s execution requirements and is still in effect.
  • Sufficient scope of authority: The power of attorney must give the agent powers broad enough to pursue claims, engage counsel, and receive money on the parent’s behalf, either through specific grants or through general financial and litigation powers.
  • Proper procedure for claiming surplus funds: The agent (through counsel, if retained) must follow the special proceeding process before the clerk of superior court to establish the parent’s right to the surplus funds being held.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Without specific facts, assume a parent’s home was foreclosed and a surplus is now held by the clerk of superior court. If the parent executed a durable power of attorney that clearly authorizes the agent to manage real estate, pursue and settle claims, and hire professionals, the agent can typically retain a lawyer and file the special proceeding in the parent’s name to claim the surplus. If the power of attorney is older, narrowly drafted, or from another state, the clerk may question whether it covers litigation or claim-collection powers, which can delay or limit the agent’s ability to proceed.

Process & Timing

  1. Who files: The parent is the claimant, acting through the named agent under the power of attorney. Where: In the office of the Clerk of Superior Court in the county where the foreclosure, execution sale, or lien sale occurred in North Carolina. What: A verified petition or application in a special proceeding to determine ownership of surplus funds, attaching the power of attorney and any sale or clerk documentation identifying the surplus. When: As soon as practical after learning that surplus funds are on deposit; surplus proceeds may remain for a significant time, but related deadlines or competing claims can affect recovery.
  2. The clerk issues notice to all known potential claimants and sets the matter for consideration. If no one contests the parent’s claim and the power of attorney authority is clear, the clerk may decide the matter on the written filings or at a brief hearing. If another party files an answer disputing ownership, the clerk can transfer the case to the civil docket of superior court for a judge or jury to resolve factual disputes.
  3. Once the court determines who is entitled, the clerk issues an order directing payment of the surplus funds. The clerk then disburses the money, usually by check payable to the parent, with the agent authorized to receive it under the power of attorney if the document allows receipt and negotiation of funds for the parent’s benefit.

Exceptions & Pitfalls

  • Insufficient authority in the power of attorney: A limited power of attorney that only covers one transaction or excludes litigation or claim-collection authority may not support filing a surplus proceeding or hiring counsel.
  • Out-of-state or outdated forms: A power of attorney created under another state’s law or before North Carolina’s current statute may still work, but the clerk may require extra proof of validity or may be cautious about recognizing broad implied powers.
  • Capacity and revocation issues: If the parent revoked the power of attorney or if a court later appointed a guardian of the estate, the agent’s authority to act and to control the surplus-claim proceeding can change or end.
  • Notice and service problems: Failing to list or notify all known lienholders or potential claimants can delay the proceeding or result in additional hearings or transfer to the civil docket.
  • Competing claims to surplus: Junior lienholders, judgment creditors, or other co-owners can file answers asserting rights to all or part of the surplus, requiring more extensive evidence and possibly a trial in superior court.

Conclusion

Under North Carolina law, surplus funds from foreclosure, execution, or certain lien sales are held by the clerk of superior court and claimed through a special proceeding. An agent acting under a valid, sufficiently broad power of attorney can generally hire a lawyer and file that proceeding in the parent’s name, so long as the document authorizes managing property, pursuing claims, and receiving funds. The practical next step is to have a North Carolina attorney review the actual power of attorney and, if appropriate, file a surplus claim with the clerk in the county where the sale occurred.

Talk to a Surplus Funds Attorney

If a parent has surplus funds sitting with the clerk of superior court after a foreclosure or other sale and there is a power of attorney in place, our firm has experienced attorneys who can help evaluate the document, confirm authority, and pursue the surplus claim. 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 any specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If there is a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Surplus Funds 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.