Short Answer

Yes—under North Carolina law, reasonable and necessary carrying costs and court‑approved sale expenses can be reimbursed from court‑ordered real estate sale proceeds in an ancillary estate. Executor (personal representative) commissions are also allowed, but when land is sold to pay debts, commissions are limited to the portion of sale proceeds actually applied to debts or legacies. The Clerk of Superior Court reviews and approves both expenses and commissions.

Understanding the Problem

You are serving as executor of an estate domiciled outside North Carolina and need to open an ancillary estate in North Carolina to sell North Carolina real property and use the proceeds to pay creditor claims. You want to know if you can reimburse taxes, insurance, utilities, lock changes, basic repairs, or eviction costs from the sale, and whether you can receive a commission on the sale proceeds.

Apply the Law

In North Carolina, real property can be used to pay estate debts when the personal representative determines it is in the best interest of administration and the Clerk authorizes a sale in a special proceeding. The Clerk also may authorize the personal representative to take possession and control of the real property to preserve it. Necessary and reasonable expenses to preserve and sell the property—when properly authorized and documented—are treated as costs of administration or expenses of sale and are paid from sale proceeds before general claims. Commissions are permitted on receipts and disbursements, but if land is sold to pay debts, the commission base is limited to the part of proceeds actually applied to debts or legacies, not the entire sale price.

Key Requirements

• Authority and venue: Open an ancillary estate and, if needed, obtain a court order for possession/control and a special proceeding order to sell in the county where the land sits.
• Necessity/best interest: Show that selling the property is in the best interest of administering the estate to pay valid claims; the Clerk must authorize the sale.
• Carry costs: Only reimburse necessary, itemized preservation and sale costs (e.g., taxes, insurance, utilities, minimal safety repairs, eviction fees if required to deliver possession) typically with prior or contemporaneous court authority.
• Payment priority: Sale proceeds first satisfy liens and costs of sale/administration, then other claims in statutory order; any excess follows the court’s direction.
• Commissions: Allowed, but for a sale-to-pay-debts, commissions apply only to the portion of proceeds actually used to pay debts/legacies; avoid “double compensation” for sale services.
• Notice to creditors: Publish notice in the ancillary county; claims are generally barred if not presented within the statutory period after first publication; coordinate claims across both states.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-15-1 (Assets available to pay claims) – Real property may be used to pay debts if in the estate’s best interest.
• North Carolina Gen. Stat. § 28A-17-1 (Special proceeding to sell land) – Clerk may order sale of real property to create assets to pay claims.
• North Carolina Gen. Stat. § 28A-23-3 (Commissions and allowances) – Commissions and necessary disbursements allowed; for sales to pay debts, commissions are limited to amounts applied to debts/legacies.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment of claims) – Costs of administration and sale are paid before general creditor claims.

Analysis

Apply the Rule to the Facts: Because the domiciliary estate lacks sufficient local assets, opening an ancillary estate in North Carolina and seeking a court‑ordered sale is appropriate. Reasonable carrying costs (e.g., property taxes, insurance to protect the asset, utilities to enable showings, necessary lock changes or code‑required repairs, and eviction expenses if possession is needed) can be reimbursed as administrative or sale expenses when authorized and documented. Commissions are allowable, but only on the portion of sale proceeds actually used to pay debts; any remaining proceeds not used for debts are not commissionable.

Process & Timing

1. Who files: The domiciliary personal representative (or eligible applicant). Where: Clerk of Superior Court in the North Carolina county with assets for ancillary letters; file the sale petition in the county where the land is located. What: Apply for ancillary letters (AOC‑E‑201 for wills or AOC‑E‑202 for intestacy) and file Affidavit of Notice to Creditors (AOC‑E‑307); then petition for sale to create assets. When: Seek ancillary letters first; publish notice to creditors promptly; file the sale petition once you can show the sale is in the estate’s best interest.
2. Serve heirs/devisees in the special proceeding; the Clerk may set a hearing and, if satisfied, enter an order of sale. If authorized to conduct the sale, ensure bond coverage matches expected proceeds. Judicial sale procedures and upset‑bid periods apply; local timelines vary by county.
3. After confirmation, apply proceeds: pay liens and authorized sale/administration costs and then claims by statutory priority. Request the Clerk’s approval of reimbursements and commissions in your account; remit any surplus as directed by the court (for example, to the domiciliary personal representative).

Exceptions & Pitfalls

• Do not pay for ongoing upkeep of real property unless the court or will authorizes taking possession/control; otherwise heirs/devisees typically bear post‑death upkeep.
• Avoid “double compensation” if the personal representative performs brokerage‑type services; the Clerk scrutinizes sale‑related compensation.
• Failure to serve all heirs/devisees in the sale proceeding can void the order as to those parties; ensure proper service.
• Confirm and document that carrying costs were necessary and reasonable; get advance court authority where feasible.
• Pay existing liens on the property first; only the net remainder is available for other claims.
• Ensure bond coverage is sufficient if the personal representative receives sale proceeds.

Talk to a Probate Attorney

If you’re dealing with an out‑of‑state estate that needs a North Carolina ancillary sale to pay debts, our firm has experienced attorneys who can help you understand your options 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.