North Carolina Estate Accounting: A Representative's Guide

North Carolina administers estates under Chapter 28A of the General Statutes, before the Clerk of Superior Court, Estates Division, in each county. There is no separate probate court, surrogate, or register of wills. The statute calls the fiduciary the personal representative throughout, whether appointed under a will or without one, and this guide uses the same term (some call the role the executor or administrator instead). Filing both documents is mandatory, not customary: G.S. 28A-20-1 requires a sworn, itemized inventory of everything the decedent owned, filed with the clerk within three months of qualifying, on AOC-E-505, Inventory For Decedent's Estate (Rev. 3/18). G.S. 28A-21-1 and 28A-21-2 require an annual account, if the estate stays open past a year, and a final account, each filed on AOC-E-506, Account. The clerk audits every account that gets filed, annual or final, not only the last one (G.S. 28A-20-1, 28A-21-1, 28A-21-4).

AOC-E-505's Part I, Property Of The Estate, has eight numbered items: bank accounts in the decedent's sole name, joint accounts without a right of survivorship, stocks and bonds, cash and undeposited checks, all other personal property, real estate the will specifically gave to the estate and directed to be sold, once it has sold, and a yes-or-no question about a pending lawsuit. Total Part I adds up only items 1 through 6; item 7, real estate the will gave to the estate but that has not sold yet, is disclosed in its own box outside that total, at its fair market value on the date of death. Part II, Property Which Can Be Added To Estate If Needed To Pay Claims, is a separate, contingent section: joint accounts with survivorship rights, securities registered to transfer on death, and other property that is not yet part of the probate estate but could be pulled in if creditors need to be paid.

Real estate the will did not specifically give to the estate never appears on Part I at all. Under North Carolina law, title to that property passes directly to the heirs and devisees at the moment of death, so it stays off the personal representative's ledger unless a creditor's claim forces the issue, at which point it shows up only contingently, in Part II item 4. ExecutorLedger's inventory follows that same default: a real property asset in your records prints in Part II item 4 at its date-of-death value, with a note that a parcel the will gave to the estate belongs instead in Part I item 6, once it sells, or item 7, while it is still unsold, which you move by hand once you know which parcel that is.

Within three months after qualifying, the personal representative files the sworn, itemized inventory, valued as of the decedent's date of death (G.S. 28A-20-1). Property discovered later, or a valuation later found wrong, goes on a supplemental inventory rather than an amended original (G.S. 28A-20-3).

G.S. 28A-23-3 lets the clerk fix a commission in the clerk's own discretion, up to two independent 5% ceilings: one on the receipts the personal representative brings into the estate, cash collected plus the value of personal property when the estate first receives it, and a separate one on the expenditures the personal representative pays out in accordance with law. Distributing an heir's or devisee's share is never a commissionable expenditure. The clerk weighs the time, responsibility, trouble, and skill involved in setting the actual number, so the 5%/5% figure is a ceiling, not an entitlement. A gross estate of $2,000 or less lets the clerk set a commission outside that formula instead, and a will's own compensation clause displaces the statutory formula unless the will itself defers to whatever the law provides.

A different fee, the clerk's own filing fee, is a cost the estate pays the court, not pay for the personal representative. Under G.S. 7A-307, it runs $106 plus 40 cents per $100 of the estate's gross value, capped at $6,000, computed first from the inventory and then, as new gross estate comes in, from each later account. That figure is guide information here, not something either AOC-E-505 or AOC-E-506 asks you to print.

Once every valid claim is paid and the personal representative is ready to make final distributions, collecting a signed receipt from each beneficiary serves double duty: it documents the distribution, and it gives the clerk the voucher that G.S. 28A-21-3 and 28A-21-5 treat as presumptive proof of payment. If the decedent received Medicaid, the Division of Health Benefits' claim should be settled first; clerks generally expect to see it paid or waived before approving the final account. Sending heirs and devisees written notice of the proposed final account is optional, not required, but anything in it they do not object to within 30 days is deemed accepted, which heads off later disputes over the numbers (G.S. 28A-21-6).

The personal representative files the itemized final account, AOC-E-506 with FINAL checked, showing everything received and paid out since the last account and attaching the vouchers (G.S. 28A-21-2, 28A-21-3). Once the clerk audits it and approves it, the clerk enters an order discharging the personal representative from further duties and liability, though that order cannot excuse a breach of duty under G.S. 28A-13-10(c) (G.S. 28A-23-1). If either filing is missed, the clerk can compel it with an order to show cause, and continued failure can lead to removal or contempt (G.S. 28A-21-4).

• Pay every valid claim, make the final distributions, and collect a signed receipt and release from each beneficiary. Those receipts serve as the vouchers that are presumptive proof of each payment when the clerk audits your account (G.S. 28A-21-3, 28A-21-5).
• If the decedent received Medicaid, settle the Division of Health Benefits' estate-recovery claim before you distribute. You should have mailed DHB the creditor notice within 75 days of qualifying (G.S. 28A-14-1(b)); its claim ranks as a sixth-class claim (G.S. 108A-70.5), and clerks generally expect to see it paid or waived before approving the final account.
• Optional but useful: send devisees or heirs written notice of the proposed final account. Anything disclosed in it that they don't object to within 30 days is deemed accepted, which heads off later fights over your numbers (G.S. 28A-21-6).
• File the itemized final account with the Clerk of Superior Court, Estates Division, on form AOC-E-506, showing everything received and paid out since your last account and attaching the vouchers (G.S. 28A-21-2, 28A-21-3).
• After the clerk audits and approves the final account, the clerk enters an order discharging you from further duties and liabilities. That order is the official close (G.S. 28A-23-1).

The Clerk of Superior Court (Estates Division) in the county of administration handles the whole process. North Carolina has no separate probate court, surrogate, register of wills, or orphans' court. NC is not a UPC state and has no UPC §3-1003-style sworn closing statement; a clerk-audited final account, followed by a discharge order, is the norm instead.

AOC-E-506's Part I, Summary, rolls the account forward in nine lines. Line 1 is the opening balance: the inventory's own Total Part I figure on a first account, or the prior account's own Part II total after that. Line 2 subtracts any loss from selling personal property for less than its inventory value, with a short explanation of each such sale attached; line 3 is the subtotal. Line 4 adds the total receipts shown on the back of the form, giving line 5's total assets. Line 6 subtracts disbursements, line 7 is the subtotal, line 8 subtracts distributions, and line 9 is the balance at the end of the accounting period, which should read zero on a final account.

Gains and losses are not treated the same way. A gain on selling personal property for more than its inventory value is a Part III receipt, described like any other receipt. A loss goes nowhere on Part III at all; it is subtracted directly on line 2 of the Summary instead, with the short explanation the form's own note asks for.

If any real estate the will gave to the estate has been sold, the entire sale proceeds post to Part III as a receipt, not just the gain over its inventory value; the form's own note says so directly. Distributions, cash or property handed to an heir or devisee, go on Part V: a cash distribution posts at its amount, and property distributed in kind posts at its inventory value with a note that it went out in kind, since the form counts both toward Total Part V.

Part II, Balance Held Or Invested, is completed only when filing an annual account with assets still in the estate, never on a final account. It rolls up what remains, by category, bank and cash balances, securities, and tangible personal property, into a subtotal, then adds real estate the estate acquired under G.S. 28A-15-1 and anything left over as Other. Real estate the will gave to the estate that has not sold yet is disclosed on its own line but is not added into that total, the same way item 7 is disclosed but excluded on the inventory. The total has to match the balance on the Summary's last line.

Every dollar figure on both forms needs backup the clerk can check: G.S. 28A-21-5 treats a voucher, a receipt, a cancelled or imaged check, or other detailed proof of payment as presumptive evidence of a disbursement unless someone impeaches it. Keeping that proof next to each entry as you go is what makes the account auditable when you file it.

Recording is free for as long as the estate takes: every receipt and disbursement with its date and description, distributions per beneficiary, and a balance that checks itself as you go. ExecutorLedger builds North Carolina-style documents from those records, an inventory shaped like AOC-E-505 and an account shaped like AOC-E-506, ready to transcribe onto the AOC forms when you file them with the clerk. Neither is a court form, and your attorney should review them before anything is signed or filed. Every document previews free with your real numbers, and $149 once per estate lifts the watermark.