Short Answer

In North Carolina, you generally should not combine IRA or Roth IRA proceeds with estate funds. If the IRA or Roth IRA names a beneficiary (including a testamentary trust), those assets pass outside probate and should transfer directly to the beneficiary or into properly titled inherited accounts—not into the estate account. Keep traditional and Roth IRAs separate from each other and from estate cash to preserve their tax character and meet fiduciary accounting duties.

Understanding the Problem

You’re the North Carolina executor asking whether you can mix IRA and Roth IRA money with the estate’s bank account when those retirement accounts name a testamentary trust under the will. The decision point is whether to combine or keep those retirement proceeds separate after death while you collect and transfer assets.

Apply the Law

Under North Carolina law, most retirement accounts with a valid beneficiary designation are non‑probate property. When a testamentary trust is the named beneficiary, the funds should move by direct transfer to inherited accounts for the trust, not into the estate checking account. Executors deposit checks payable to the decedent into the estate account, but they do not commingle non‑probate beneficiary assets with probate cash. Trustees must keep trust property segregated and maintain clear records. Federal tax rules also require careful handling of traditional versus Roth IRAs, often including trust documentation to the plan administrator and timing rules for distributions.

Key Requirements

• Identify the beneficiary: Confirm whether each IRA/Roth names the testamentary trust (non‑probate) or the estate (probate).
• Use direct transfers: If a trust is the beneficiary, arrange trustee‑to‑trustee transfers into properly titled inherited IRA(s) for the trust; avoid depositing into the estate account.
• Keep tax types separate: Do not mix traditional IRA funds with Roth IRA funds; maintain separate inherited accounts to preserve tax treatment and reporting.
• Segregate fiduciary funds: Keep estate cash in the estate account and trust assets in trust accounts; maintain separate accounting for each.
• Meet timing/documentation: Provide required trust documentation to the plan administrator and observe federal distribution deadlines, which can affect tax outcomes.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-15-10 (Non‑probate personal property) – Identifies property (including many beneficiary‑designated assets) that passes outside the estate.
• North Carolina Gen. Stat. § 28A-13-10 (Personal representative’s liability) – Bars commingling and imposes fiduciary liability for mishandling estate assets.
• North Carolina Gen. Stat. § 36C-8-810 (Trustee recordkeeping and identification of trust property) – Requires trustees to keep trust property separate and maintain adequate records.
• North Carolina Gen. Stat. § 1C-1601(a)(9) (Exempt property) – Protects many retirement benefits from creditors when paid to someone other than the estate.

Analysis

Apply the Rule to the Facts: Here, the IRA and Roth IRA name a testamentary trust. Because those are non‑probate transfers, you should not deposit them into the estate account. Instead, coordinate a direct trustee‑to‑trustee transfer into inherited IRA accounts titled for the trust (keeping traditional and Roth separate). The refund check payable to the decedent is a probate asset; endorse and deposit that into the estate checking account opened under the estate’s EIN.

Process & Timing

1. Who files: Executor. Where: Clerk of Superior Court (for qualification) and the chosen bank (for the estate account). What: Open the estate checking account using the estate EIN; deposit checks payable to the decedent. When: Do this promptly after you receive Letters.
2. Who handles retirement accounts: Trustee and executor together. Where: The financial institution’s retirement/beneficiary services or trust department. What: Provide the will provisions establishing the testamentary trust, trustee information/EIN, and required trust documentation; request direct transfer to inherited IRA(s) for the trust (separate traditional and Roth). When: As soon as practical; federal rules often require trust documentation by October 31 of the year after death and may require distributions by year‑end, depending on the facts.
3. Finalize funding: After debts/expenses are handled from estate funds, fund the master testamentary trust and sub‑trusts from probate assets per the will; maintain separate trust accounts and records.

Exceptions & Pitfalls

• If the estate is the beneficiary: The IRA/Roth becomes a probate asset; keep proceeds in the estate account but track “income in respect of a decedent” separately and confirm distribution deadlines before liquidating.
• Commingling risk: Mixing estate cash with trust or retirement assets can breach fiduciary duties; maintain distinct accounts and ledgers.
• Roth vs. traditional: Never combine them; different tax treatment and reporting.
• Creditor issues: Retirement benefits paid to a non‑estate beneficiary are generally protected; avoid routing them through the estate.
• Documentation deadlines: Missing beneficiary/trust paperwork or year‑end distribution timing can trigger unfavorable tax treatment.

Talk to a Probate Attorney

If you’re dealing with non‑probate retirement accounts alongside probate cash and trusts, 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.