Short Answer

In North Carolina, a personal representative must act prudently and avoid wasting estate resources. “Part Two” assets are nonprobate items that can be pulled into the estate only if needed to pay debts or expenses. If the estate does not need the asset for claims, or the cost and risk of recovery would likely exceed the net benefit, you can seek the Clerk of Superior Court’s approval to decline pursuit and disclose that decision in your final accounting.

Understanding the Problem

You’re administering a North Carolina estate and nearing closing. All priority obligations (administration costs and a surviving spouse’s allowance) are covered. What remains is a small “Part Two” investment account designated for the decedent’s children, not the spouse. You doubt the funds still exist or that chasing them would net more than it costs. You want to know if, and how, you can decide not to pursue it.

Apply the Law

Under North Carolina law, a personal representative has a fiduciary duty to settle the estate expeditiously and with as little sacrifice of value as is reasonable, and may perform acts a prudent person would undertake to collect and preserve assets. “Part Two” items listed on the court’s inventory forms are nonprobate assets that may be brought into the estate if needed to pay claims. If they are not needed for claims, or if recovery is doubtful or uneconomical, the personal representative may seek approval in an estate proceeding to decline pursuit. Proceedings to recover property before the Clerk can order delivery of specific property but cannot award money damages; if the asset has been spent or moved, recovery may require a separate civil action, which can be costly. The Clerk of Superior Court is the forum for estate proceedings, and the personal representative should time any request for instructions after the creditor claim window has closed and before filing the final account.

Key Requirements

• Prudent administration: Act to maximize net value to the estate and avoid needless expense.
• Part Two asset threshold: Confirm the item is a nonprobate asset reachable only if needed to pay estate debts/expenses.
• Need for the asset: Determine whether unpaid claims, taxes, or costs require adding the asset to the estate.
• Cost-benefit evidence: Estimate recovery likelihood and total costs (search, demand, proceedings, counsel) against expected net value.
• Court approval and notice: Seek instructions/approval from the Clerk, with notice to interested parties, before final accounting.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-13-2 (Fiduciary duty of personal representative) – Settle the estate expeditiously with as little sacrifice of value as reasonable.
• North Carolina Gen. Stat. § 28A-13-3 (Powers of personal representative) – Broad, prudent powers to collect, preserve, compromise, and manage estate matters.
• North Carolina Gen. Stat. § 28A-15-12 (Actions to recover property of decedent) – Estate proceeding can order delivery of property; damages require a civil action.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment of claims) – Establishes priority classes for paying claims from estate assets.

Analysis

Apply the Rule to the Facts: Here, the “Part Two” account is a nonprobate item meant for the children and is only reachable if needed to pay claims. You’ve already satisfied administration costs and the surviving spouse’s allowance. If there are no unpaid claims that require more funds, you generally have no duty to pursue a Part Two item for distribution purposes alone. Given your doubts about whether the funds still exist and the likelihood that recovery costs would exceed the amount at stake—especially because a Clerk’s proceeding cannot award damages—the prudent course is to seek the Clerk’s approval to forgo pursuit and document the decision in your final account.

Process & Timing

1. Who files: Personal representative. Where: Clerk of Superior Court in the county where the estate is administered (North Carolina). What: Estate proceeding petition for instructions/approval to decline pursuit of a low-value or doubtful Part Two asset; serve an Estate Proceeding Summons and provide notice to interested parties. When: After the creditor claim period has closed and before filing the final account.
2. At hearing, present cost-benefit evidence: what the asset is, why it is a Part Two item, whether claims remain unpaid, demand efforts made, likelihood the asset still exists, and estimated recovery costs and net value. Timing to hearing can vary by county; a few weeks to a couple of months is common.
3. If approved, the Clerk enters an order authorizing you not to pursue the asset. You disclose the order and reasoning in the final account and close the estate, subject to the Clerk’s audit and approval.

Exceptions & Pitfalls

• If legitimate unpaid claims remain, you may need to pursue the Part Two asset despite low value; document efforts and seek guidance early.
• A Clerk’s recovery proceeding can order delivery of specific property only; if funds are gone, you may need a separate civil action, which can erase any net benefit.
• Get written beneficiary input; consent supports reasonableness but does not replace court approval, especially if minors or unknown heirs are involved.
• Include your analysis and the Clerk’s order in the final account; omissions can delay closing or raise fiduciary concerns.

Talk to a Probate Attorney

If you’re weighing whether to chase a small, doubtful Part Two asset, 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.