Short Answer

In North Carolina, if a life insurance policy has no clear beneficiary, the policy’s default clause controls. Many policies pay the proceeds to the insured’s estate (making them part of probate), while some default to the insured’s “heirs at law.” Read the policy and contact the insurer. If proceeds are payable to the estate, you must open an estate and the administrator claims them; if payable to heirs, the insurer typically pays those heirs directly unless there’s a dispute.

Understanding the Problem

You’re in North Carolina, acting as a surviving spouse starting probate, and the life insurance policy lists no clear beneficiary. Can you claim the proceeds now, and if so, how? The answer depends on who the policy says gets paid when no beneficiary is listed, and whether that means the estate (through the Clerk of Superior Court) or the legal heirs. One key fact: your spouse died intestate (no will).

Apply the Law

Under North Carolina law, life insurance proceeds usually pass according to the beneficiary designation and are outside probate. When no beneficiary is named or the designation has failed (for example, a predeceased beneficiary with no contingent), the policy’s default provisions govern. Many policies default to the insured’s estate (making proceeds a probate asset available to pay claims before distribution), while others default to “heirs at law” (bypassing probate and generally not available for estate creditors). The Clerk of Superior Court is the forum that issues Letters of Administration if the estate must collect the proceeds. A key timing rule: once probate opens, creditors get a statutory claim window after you publish the notice.

Key Requirements

• Confirm the default payee: Obtain and read the policy’s default/contingency clause to see whether it pays the estate or heirs when no beneficiary is listed.
• Open probate if the estate is the payee: Apply for Letters of Administration with the Clerk of Superior Court; the administrator submits the claim to the insurer.
• Follow creditor procedures: If proceeds are payable to the estate, publish and mail creditor notices and use estate assets to pay valid claims before distributing the remainder.
• If heirs are the payees: Identify the heirs at law under North Carolina intestacy rules; the insurer typically pays them directly upon proof (e.g., death certificate), unless a dispute arises.
• Resolve ambiguities or disputes: If the default clause is unclear or there are competing claims, court involvement may be needed; insurers sometimes interplead funds in Superior Court.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-15-1 (Estate assets for debts) – Estate property is available to pay claims unless excluded by statute.
• North Carolina Gen. Stat. § 28A-14-1 (Notice to creditors) – Sets publication and mailing requirements; creditors have a limited time to file claims.
• North Carolina Gen. Stat. § 29-14 (Surviving spouse’s intestate share) – Describes the spouse’s share if assets pass by intestacy.
• North Carolina Gen. Stat. § 7A-111 (Insurance payable to clerk for minors) – Allows certain life insurance proceeds for minors (per-policy limits) to be paid to the clerk.

Analysis

Apply the Rule to the Facts: Because the policy lists no clear beneficiary, the controlling step is to read the policy’s default clause. If it defaults to the estate, you (as administrator) claim the proceeds after the Clerk of Superior Court issues Letters of Administration; the funds become estate assets, subject to creditor claims, then distribute under intestacy. If it defaults to heirs, the insurer typically pays the spouse and biological child as heirs; a stepchild not legally adopted is not an heir under intestacy.

Process & Timing

1. Who files: The surviving spouse seeking to serve as administrator. Where: Clerk of Superior Court in the decedent’s North Carolina county of domicile. What: File Application for Letters of Administration (AOC-E-202), death certificate, and related forms; request bond waiver or setting as allowed. When: After qualification, publish notice to creditors and mail notice to known creditors; creditors then have 90 days from first publication to present claims.
2. Submit the insurance claim: Provide the insurer with the death certificate, policy details, and Letters of Administration if the estate is the payee; if heirs are the payees, the insurer will request proof of identity/relationship and may require additional documentation.
3. Resolve claims and distribute: If proceeds are an estate asset, pay valid claims and costs, then distribute under intestacy. If proceeds are paid to heirs directly, no probate handling of those funds is required unless a dispute or special circumstance arises.

Exceptions & Pitfalls

• Policy default differs: Some policies default to “heirs at law,” not the estate. This usually bypasses probate and estate creditors.
• Who is an “heir”: A stepchild not legally adopted is generally not an heir under intestacy; do not assume stepchildren share if the default is to heirs.
• Bond waivers: In intestate estates, bond is often required unless waived/adjusted as permitted. Only proper heirs can consent to waivers; a non-heir stepchild cannot.
• Disputes/ambiguity: Conflicting claims or unclear records can lead to insurer interpleader in Superior Court or require a declaratory action.
• Minors: If a minor is the payee, the insurer may require payment to the Clerk under statutory limits or a guardianship before releasing funds.
• Tax apportionment: Even when proceeds bypass probate, beneficiaries may owe their share of estate tax apportionment if applicable under North Carolina law.

Talk to a Probate Attorney

If you’re dealing with a life insurance policy that names no clear beneficiary and you need to open an estate, 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.