Short Answer

Yes. In North Carolina, estate funds pay the costs of administration (including reasonable attorney’s fees) and valid creditor claims before heirs receive anything. After you publish and send the required notice to creditors, claims are paid in a set legal order. Distributions to heirs come only after expenses, allowances, and higher‑priority claims are handled.

Understanding the Problem

In North Carolina, can the person managing an intestate estate use estate money to pay lawyers and creditors before heirs receive their shares? You are an adult child heir, and the decedent died without a will. The decision turns on when the administrator is appointed, how the creditor notice is handled, and the legal order in which expenses and claims must be paid.

Apply the Law

Under North Carolina probate law, a court‑appointed personal representative (administrator for an intestate estate) controls probate assets, must give proper notice to creditors, and must pay claims in a strict order. “Expenses of administration” include court costs, bond premiums if any, and reasonable attorney’s fees necessary to administer the estate. The Clerk of Superior Court oversees the accounting and may review or approve fees. The main forum is the Clerk of Superior Court in the county of the decedent’s domicile. The core timing trigger is the creditor notice period: publication once a week for four consecutive weeks and mailed notice to known creditors within 75 days after letters are issued; claims are due no earlier than three months after first publication, with a longer window for any creditor who receives mailed notice.

Key Requirements

• Appointment and estate account: Get appointed by the Clerk of Superior Court and use a dedicated estate bank account; do not use personal funds or distribute early.
• Notice to creditors: Publish notice and mail notice to known creditors on time; track the claims window and file the required affidavit of notice with the inventory.
• Priority of payments: Pay administration expenses and statutory allowances first, then other claims by class; never favor one creditor over another within the same class.
• Solvency check before paying early: Only pay claims before the claim period closes if the estate is clearly able to pay all claims and costs.
• Clerk review of fees: Attorney’s fees and commissions are paid from the estate but are subject to the Clerk’s review/approval in an account or by order.
• Real estate & secured debts: Mortgages and other liens attach to their collateral; if cash is needed, court approval may be required to sell real property to create assets.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-14-1 (Notice to creditors) – Requires newspaper publication and mailed notice to known creditors within 75 days after letters.
• North Carolina Gen. Stat. § 28A-19-3 (Time limits to present claims) – Bars claims not presented by the published deadline or, if later, 90 days after mailed notice.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment of claims) – Sets the mandatory priority, with administration expenses and allowances first.
• North Carolina Gen. Stat. § 28A-23-3 (Commissions and necessary expenses) – Authorizes reasonable sums for necessary charges, including counsel fees, subject to clerk oversight.

Analysis

Apply the Rule to the Facts: Here, the adult sibling should qualify as administrator and open an estate account. Legal and filing costs to get control of the assets, publish notice, and straighten out titles on the business vehicles are “administration expenses,” payable from the estate before heir distributions. The paid‑off home is a potential source of value; the mortgaged home carries a secured claim that attaches to that property, so paying the mortgage to preserve equity can be appropriate while the claim period runs. Because there is a minor heir, the administrator should plan for a guardianship or other court‑approved arrangement before any funds are delivered for that child; no distributions should occur until after the creditor window closes and valid claims are paid in the statutory order.

Process & Timing

1. Who files: The adult sibling (as administrator). Where: Clerk of Superior Court in the decedent’s county. What: Application for Letters of Administration (AOC‑E‑202), Oath, and any required bond; then open an estate bank account. When: As soon as practical after death.
2. Publish notice to creditors once a week for four consecutive weeks; mail notice to known creditors within 75 days of appointment; file the Inventory within three months and the Affidavit of Notice to Creditors (AOC‑E‑307) with the clerk.
3. After the claims window closes, pay allowed claims by class (administration expenses and allowances first) and seek clerk review of attorney’s fees via the accounting or petition. If cash is needed from real estate to pay debts, file a petition to sell; then make distributions (setting up a guardianship or other court‑approved arrangement for the minor) and file the final account to close the estate.

Exceptions & Pitfalls

• Do not distribute to heirs before the claim period closes unless the estate is clearly solvent; early payments risk personal liability.
• No preferences within a class—general creditors share pro rata; paying one in full can create surcharge risk.
• Secured debts (like a mortgage) attach to the collateral regardless of the claim bar; plan for payments or a sale if needed.
• If the decedent received certain public benefits, promptly mail creditor notice to the appropriate state agency to start the claim clock.
• Real estate sales within two years of death can be void as to creditors unless the personal representative has published notice and, if required, joins the deed.
• Funds for a minor cannot be paid directly; arrange a guardianship of the estate or other court‑approved mechanism before distribution.

Talk to a Probate Attorney

If you’re dealing with how to pay attorneys and creditors from an estate before heirs are paid, 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.