Short Answer

Yes. In North Carolina, the personal representative (executor/administrator) may negotiate and compromise creditor claims, including a nursing home’s bill, before paying from estate funds. Claims must be timely presented and are paid by statute in a set order of priority. Nursing home charges for services in the last 12 months before death have a higher priority than older balances, which affects how much must be paid and gives leverage to settle or reduce disputed amounts.

Understanding the Problem

You want to know if, in a North Carolina probate, the personal representative can negotiate a nursing facility’s claim before paying it from estate assets. Here, the estate sold a house to raise funds, and the clerk is holding the sale proceeds pending distribution. There are claims from a nursing facility, a small bank overdraft, and a personal loan, and the sole heir advanced memorial costs and seeks reimbursement.

Apply the Law

North Carolina law lets the personal representative evaluate, negotiate, compromise, or reject claims. Creditors must present claims by the deadline in the published notice to creditors, and the personal representative pays allowed claims in statutory order. Medical and nursing charges for the decedent’s last 12 months have a specific priority; older balances fall into the general unsecured class and get paid only if funds remain. If a claim is rejected in whole or part, the creditor must sue within a short window or be barred.

Key Requirements

• Timely presentation: A creditor must present a written claim by the deadline stated in the estate’s notice to creditors (at least three months from first publication) or be barred.
• Classification and priority: Claims are paid in a fixed order. Nursing home bills for medical services within the last 12 months before death have a higher class than general unsecured debts; older charges are lower priority.
• Personal representative’s authority: The personal representative may compromise or settle claims in the estate’s best interest and must keep proof and account for any settlement.
• No preference within a class: If funds are short, claims in the same class are paid pro rata; the personal representative cannot favor one over another.
• Rejection triggers lawsuit deadline: After a written rejection, a creditor generally has three months to sue or the claim is barred.
• Funeral reimbursement: Reasonable funeral expenses up to $3,500 receive higher priority; any excess is a lower-class claim. A personal representative seeking reimbursement for their own advance needs the clerk’s written approval before paying themselves.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-13-3 (Personal representative powers) – authorizes handling, compromise, and settlement of claims.
• North Carolina Gen. Stat. § 28A-19-3 (Non-claim deadlines) – sets the bar date for presenting claims.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment) – establishes the classes and priority of claims, including medical/nursing charges.
• North Carolina Gen. Stat. § 28A-19-16 (Suit after rejection) – creditor’s deadline to sue after a claim is rejected.

Analysis

Apply the Rule to the Facts: The nursing home must have timely presented its claim. Charges for care within the last 12 months before death get a higher priority than older balances, which are lower-priority, general claims. Because the house was sold to create liquidity, the personal representative should verify all claim details and negotiate reductions for disputed or lower-priority amounts. The heir’s memorial expense claim can be reimbursed up to $3,500 in a higher class if timely presented; if the heir is also the personal representative, clerk approval is required before self-reimbursement.

Process & Timing

1. Who files: Personal representative. Where: Estate file with the Clerk of Superior Court in the North Carolina county where the estate is administered. What: Publish notice to creditors; review presented claims; request itemized statements; negotiate and document any compromise; if disputing, send a written rejection; file the affidavit of notice to creditors (AOC-E-307) with the three-month inventory. When: Publish promptly after qualification; creditors’ window is at least three months from first publication; creditors have three months after a written rejection to sue.
2. After the claims period, classify claims, confirm funds, and negotiate any disputed nursing home balances (for example, older charges or uncredited insurance/Medicaid payments). If unresolved, consider a written referral agreement to disinterested referees or maintain the rejection and prepare to defend if sued.
3. Pay allowed claims in statutory order and pro rata within each class; reimburse funeral costs up to priority limits; then make distributions. Document all settlements and payments in the accounting for clerk review.

Exceptions & Pitfalls

• Medical assistance recovery: If the Department of Health and Human Services asserts a Medicaid recovery, that claim has its own statutory priority and may affect how much a facility gets.
• Paying too soon: Avoid paying before the claims window closes unless the estate is clearly solvent. Early overpayment can create personal liability for the personal representative.
• No preference within a class: In an insolvent estate, do not favor one general creditor over another; pay pro rata.
• Personal representative’s own claim: If you advanced funeral costs and you are the personal representative, obtain the clerk’s written approval before reimbursing yourself.
• Notice and deadlines: Keep proof of mailed/published notices. Missing the rejection letter or lawsuit deadlines can change your leverage or bar a claim.

Talk to a Probate Attorney

If you’re dealing with a nursing facility bill and other estate 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.