Probate Q&A Series

Can I file a breach of fiduciary duty claim against a relative who abused their power of attorney? – North Carolina

Short Answer

Yes. In North Carolina, an agent under a power of attorney owes a fiduciary duty to act in the principal’s best interests. After death, the personal representative of the estate (and, in some matters, other interested persons) can ask the Clerk of Superior Court to compel an accounting and can sue in Superior Court to recover money, unwind self-dealing transfers, and clear title. Timing and standing matter, so open the estate and act promptly.

Understanding the Problem

The core question is: in North Carolina, can you bring a claim when a relative used a power of attorney to deed your grandparent’s house to themself before death? You need to open the estate, authenticate the will, and address the deed transfer so the property passes under the will. The relative is not cooperating and won’t share probate papers or step aside, which is delaying administration.

Apply the Law

Under North Carolina law, an agent under a power of attorney (POA) is a fiduciary and must act loyally, in good faith, and within the authority granted. Courts can order accountings, suspend or remove agents, void self-dealing acts, impose constructive trusts, and award damages. The Clerk of Superior Court handles probate and many POA-related proceedings, but claims for money damages and deed set-asides are brought in Superior Court. After death, the personal representative (PR) typically prosecutes these claims for the estate.

Key Requirements

  • Fiduciary duty existed: A valid POA made the relative an agent owing duties of loyalty, good faith, and obedience to the POA’s limits.
  • Breach: Self-dealing (like deeding the principal’s real estate to oneself) or using funds for the agent’s benefit without clear authority and the principal’s best interests.
  • Harm/benefit: The estate or principal suffered loss, or the agent gained an improper benefit (e.g., taking title to the house).
  • Proper forum and standing: The PR generally brings damages and deed-set-aside claims in Superior Court; the Clerk can compel an accounting and address certain POA issues.
  • Timing: North Carolina imposes short filing deadlines; many breach and fraud-based claims are subject to limitation periods commonly around three years from discovery, but accrual rules vary.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The relative, acting as agent, owed your grandparent a fiduciary duty. Deeding the house to themself before death suggests self-dealing outside the principal’s best interests and likely beyond any ordinary gifting authority. If that deed harmed the principal or benefitted the agent improperly, that’s the breach and damages/benefit elements. After the will is probated and a PR is appointed, the PR can seek an accounting, file suit to set aside the deed, and recover money or title for the estate.

Process & Timing

  1. Who files: You (as a devisee) can offer the will for probate. Where: Clerk of Superior Court in the county of the decedent’s domicile. What: AOC-E-201 (Application for Probate and Letters); if the will is not self-proved, AOC-E-300 (Affidavit of Subscribing Witnesses); the Clerk issues AOC-E-304 (Certificate of Probate). When: If the named executor does not apply within 60 days, you may apply upon ten days’ notice to the named executor.
  2. After letters issue, the PR asks the Clerk to compel the agent’s accounting and production of records under the POA and may initiate an estate proceeding to examine a person believed to hold estate property. This often occurs within weeks of appointment, but timing varies by county and docket.
  3. The PR then files a civil action in Superior Court for breach of fiduciary duty/constructive fraud and to set aside the deed, seeking remedies like a constructive trust, deed cancellation, restoration of property or money, and related relief. A lis pendens is typically recorded to protect title during the case. The outcome is a court order addressing title and any monetary relief.

Exceptions & Pitfalls

  • Broad POA authority: Some POAs expressly permit gifts or self-dealing. Even then, the agent must act in the principal’s best interests; the wording and facts matter.
  • Wrong forum: The Clerk can compel an accounting and address agent authority, but monetary damages and deed set-aside claims belong in Superior Court.
  • Standing: After death, the PR ordinarily brings the claims. Move probate forward and seek appointment if the named executor won’t act.
  • Title defenses: If the agent conveyed the property to a bona fide purchaser for value, your remedy may shift from return of the property to money recovery against the agent.
  • Real estate formalities: Defects in notarization, recording, or proof of the POA can affect deed validity; gather the recorded POA, deed, and closing file early.
  • Deadlines: Limitation and accrual rules vary by claim (breach, fraud, conversion). Do not delay.

Conclusion

Yes—you can pursue a breach of fiduciary duty claim in North Carolina when a POA agent self-deals. Open the estate, have the Clerk admit the will, and get a personal representative appointed. The PR can compel an accounting, then sue in Superior Court to unwind the deed and recover losses. Next step: file the probate application with the Clerk of Superior Court; if the named executor has not applied within 60 days, give ten days’ notice and apply yourself.

Talk to a Probate Attorney

If you’re facing a deed transfer or missing funds tied to a power of attorney, our firm can help you open the estate, secure an accounting, and file the right court actions. Call us today to discuss your options and timelines.

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.