In North Carolina a personal representative is appointed by the Superior Court to perform the activities required to settle the decedent’s estate. A personal representative is a fiduciary and is required to perform their duties with the utmost honesty and care and with the best interests of the estate in mind. Both an executor and an administrator are types of personal representatives. If the personal representative was named in the decedent’s will, then the person is called an “executor.” If the personal representative was not named in the decedent’s will, the person is typically referred to as an “administrator.” Regardless of whether the personal representative was named in the decedent’s will or not, under North Carolina law their duties and responsibilities are essentially the same.
Personal Representative Appointment in North Carolina
Even if the personal representative is named in the decedent’s will, the personal representative does not have the authority to act on behalf of the estate until the Clerk of the Superior Court has issued them “letters.” G.S. § 28A-6-1. The personal representative must also take an oath. If the personal representative was named in the decedent’s will, they will not be required to post a bond. If they were not, they will have to post a bond unless waived by all heirs. G.S. § 28A-8-1.
Duties and Responsibilities
Once appointed, the tasks that the personal representative is responsible for completing to settle the estate include:
Notice to creditors. One of the primary purposes of estate administration is to make sure that the decedent’s debts are paid. It is up to the personal representative to notify the creditors of the manner of filing claims and of the claims period. The personal representative must do this both by publishing a notice and by mailing or delivering notices to known creditors. Creditors have 3 months from the date of the first publication, mailing, or delivery to file claims. G.S. § 28A-14-1.
Inventory estate assets. The personal representative also must create an inventory of estate assets that includes the value of each asset. The personal representative must file the inventory with the Clerk of the Superior Court within 3 months of appointment. G.S. § 28A-20-1
Pay debts. The personal representative is responsible for debt payment. This means that they are required to pay from estate assets claims that are filed within the claims period as indicated in the notice to creditors. If the decedent left more debt than assets, the personal representative must refer to state law to determine the order of priority to pay debt as well as expenses.
Distribute assets. While asset distribution is one of the main goals of estate administration and one of the most important responsibilities of the personal representative, it is secondary to debt payment. Asset distribution cannot take place until debt has been paid. In fact, if the estate has limited assets and significant debt, there may not be much left in the estate to distribution after debt payment. The assets that remain in the estate must be distributed as instructed by the decedent in their will, if any. Otherwise, North Carolina law directs who assets are to be distributed.
Final accounting. Before the court will determine the personal representative to be finished with their duties, it must approve the final accounting. The final accounting is documentation of the state of the estate and includes details of assets that left the estate and that came into the estate. Once the court approves the final accounting it will issue an order discharging the personal representative. G.S. § 28A-23-1
Compensation of Personal Representative
The personal representative may receive a commission for their work. The court will go by the compensation scheme described in the will. If the will does not establish the amount or method of compensation, or if there is no will, the Clerk of Superior Court may allow a commission of up to 5% of the estate receipts and disbursements. The clerk will consider the time, responsibility, trouble, and skill involved in the management of the estate. G.S. § 28A-23-3