Sep292025
Probate Q&A Series

How do I challenge asset transfers made under a power of attorney as a breach of fiduciary duty? – North Carolina

Short Answer

In North Carolina, you typically open the estate and have a court‑appointed personal representative bring claims in Superior Court against the agent under a power of attorney for breach of fiduciary duty and related relief. At the same time, you can ask the Clerk of Superior Court to order the agent to account and produce records. If the agent exceeded authority (for example, changing beneficiaries or gifting without specific authority) or acted against the principal’s interests, the court can void transfers, impose a constructive trust, and order restoration of assets.

Understanding the Problem

You’re asking how, under North Carolina probate law, you can challenge transfers made by an older sibling who acted as the decedent’s power of attorney. The immediate goal is to protect and recover assets that should benefit the estate (and the minor child), especially because no probate administration has been opened yet. You want to know who files, where to file, and what relief is available when the agent changed beneficiaries and moved assets before death.

Apply the Law

Under North Carolina’s Uniform Power of Attorney Act, an agent is a fiduciary who must act in the principal’s best interest and within the authority actually granted. Certain acts—like making gifts, changing beneficiary designations, or creating rights of survivorship—require specific, express authority in the power of attorney. After the principal’s death, monetary claims against the agent (such as breach of fiduciary duty) are filed as a civil action in Superior Court, while the Clerk of Superior Court can hear petitions to compel an accounting and related non‑monetary relief. Venue is generally where the principal resided, where the agent resides, or where property is located.

Key Requirements

  • Standing and forum: After death, the personal representative of the estate brings money‑damage claims in Superior Court; anyone with standing may ask the Clerk to compel an accounting from the agent.
  • Show duty and breach: Prove the agent owed fiduciary duties and either acted outside granted authority (e.g., unauthorized gifts or beneficiary changes) or against the principal’s interests.
  • Connect breach to loss: Tie the agent’s acts to depletion or diversion of assets that should benefit the estate or its beneficiaries.
  • Available remedies: Ask the court to void unauthorized acts, impose a constructive trust, freeze or trace assets, and order restoration of property or proceeds; fee‑shifting may be available.
  • Timing and venue: Act promptly; use the county of the principal’s domicile, the agent’s residence, or where property sits; some deadlines may be extended for minors, but do not delay.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Because no estate is open, the first step is to seek appointment of a personal representative to gain standing to sue. The older sibling, as agent, allegedly changed beneficiaries and moved assets; those actions require specific authority and must still be in the principal’s best interest. If that authority was missing or the actions favored the agent over the principal, a court can void the changes, impose a constructive trust on proceeds, and order the return of assets for proper distribution to heirs, including the minor child.

Process & Timing

  1. Who files: A parent of the minor child or another suitable person seeks appointment as Administrator. Where: Clerk of Superior Court (Estates Division) in the county where the decedent lived. What: Application for Letters of Administration (AOC‑E‑202); then apply for the child’s year’s allowance (AOC‑E‑100). When: Do this promptly; if Letters are issued, file the child’s allowance within six months of the Letters.
  2. Accounting and discovery: Petition the Clerk to compel the former agent’s accounting and production of records under the power of attorney. If needed, initiate an estate proceeding to examine persons believed to hold estate property and seek orders to recover it.
  3. Civil action for breach: File a Superior Court lawsuit against the agent for breach of fiduciary duty and related claims. Request remedies such as an injunction, constructive trust, tracing, and restoration of assets; include any transferees necessary to unwind deeds or beneficiary changes.

Exceptions & Pitfalls

  • If the power of attorney expressly authorized the agent to make gifts, change beneficiaries, or create survivorship interests—and the acts aligned with the principal’s interests—the transfers may stand.
  • Do not file a money‑damages breach claim with the Clerk; those belong in Superior Court. Use the Clerk for accountings and related authority issues.
  • Name all necessary parties (for example, grantees on deeds or pay‑on‑death recipients) to unwind transfers; consider recording a lis pendens for real estate.
  • Some nonprobate assets pay directly to named beneficiaries. You can still challenge the agent’s conduct and ask the court to impose a constructive trust on those proceeds.
  • Deadlines exist and can be affected by factors like fraud discovery or minority; do not delay gathering records and filing.

Conclusion

To challenge pre‑death transfers by an agent in North Carolina, open the estate, then use two tracks: ask the Clerk to compel the agent’s accounting and file a Superior Court action for breach of fiduciary duty to void unauthorized acts, impose a constructive trust, and restore assets. The key threshold is whether the agent had express authority and acted in the principal’s best interests. Next step: file an Application for Letters of Administration with the Clerk and, if Letters issue, apply for the child’s year’s allowance within six months.

Talk to a Probate Attorney

If you’re dealing with questionable transfers under a power of attorney and need to protect a minor child’s inheritance, 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.

Category: Probate Q&A Series

Author: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.