Court of Appeals Sides with Our Client:
Law Firms Cannot Serve as Trustee or Executor of a Client's Estate
North Carolina Estate Planning & Fiduciary Law is pleased to announce a significant appellate victory for our client, Devin Anthony Russo, before the North Carolina Court of Appeals. Attorneys James Hickmon and Jeremy Canipe represented Mr. Russo, the Petitioner-Appellant, in an appeal that clarifies a fundamental question in North Carolina fiduciary law: can a law firm name itself as trustee or executor of a client's estate? The Court's unanimous answer was no.
Background
Leonard A. Russo executed his Last Will and Testament in June 2012. The will, drafted by attorney Robert Michael Schmidt, III, named Leonard's wife, Grace Long Russo, as executor, with Michael Schmidt, Attorney at Law, PLLC — the law firm through which Schmidt practiced — designated as successor executor. Article III of the will also created the “Leonard A. Russo Trust,” funded principally with Leonard's residence, and named the Law Firm as the trust's sole trustee. Under the trust, Grace was to receive lifetime use of the home, with any remaining trust property passing on her death to Leonard's grandson, our client, Devin Russo.
The will also contained a forfeiture, or “no-contest,” clause providing that any beneficiary who attempted to contest a provision of the will or trust — including the Article III trust — would forfeit their interest.
Leonard died on March 15, 2018, and his will was admitted to probate in Scotland County on April 23, 2018. What followed was more than five years of inaction: Grace never qualified as executor and never formally renounced, the Law Firm never sought to qualify as successor executor, and no one — no executor, no trustee — ever undertook administration of either the estate or the trust.
On July 13, 2023, after more than five years of dormancy, Devin filed a verified petition for declaratory judgment. He asked the court to declare that Grace's prolonged failure to qualify constituted an implicit renunciation, that the trust was ineffective because the Law Firm was statutorily barred from serving as trustee, and that the Law Firm was likewise barred from serving as successor executor. He sought appointment of either himself or the Scotland County Public Administrator as administrator and trustee.
Grace, Robert Michael Schmidt, III, and the Law Firm opposed the petition, arguing that Devin's filing itself triggered the will's forfeiture clause and stripped him of standing, and that the Law Firm was legally entitled to serve as both trustee and executor.
The trial court sided with the respondents on nearly every point: it found that Devin had standing despite the forfeiture clause, but then granted judgment on the pleadings for the respondents, concluded the Law Firm was authorized to serve as trustee and could sell the residence, confirmed Grace as executor, and dismissed Devin's petition with prejudice — denying his request for costs and attorney's fees. Grace qualified as executor a week later, on November 20, 2024. Devin appealed.
The Court of Appeals’ Holdings
Writing for a unanimous panel (Judge Collins, with Judges Griffin and Stading concurring), the Court of Appeals reversed the trial court on nearly every point.
1. Devin had standing — asking a court to enforce a will is not “contesting” it. The Court held that Devin never contested any provision of the will or trust. He simply sought enforcement of its terms and proper appointment of fiduciaries through a petition for declaratory judgment expressly authorized by N.C. Gen. Stat. § 28A-5-1(b)(ii), which lets an interested person petition to have a non-qualifying named executor deemed to have renounced. Because Devin never forfeited his beneficiary status, he had standing, and the trial court's denial of the respondents' Rule 12(b)(1) motion on this point was correct.
2. A law firm organized as a PLLC cannot serve as trustee. The Court held that North Carolina's Multistate Trust Institutions Act, N.C. Gen. Stat. § 53-303(a), bars any company from engaging in “trust business” — including acting as a fiduciary — unless it falls within one of eight enumerated categories: state trust companies, state banks, state and federally chartered savings associations, national banks headquartered in North Carolina, and certain out-of-state or foreign trust institutions. Law firms organized as PLLCs appear nowhere on that list, and under the canon of expressio unius est exclusio alterius, their omission is exclusion. The Court rejected the argument that the “legal services” exception in N.C. Gen. Stat. § 53-304(2) saved the arrangement, holding that serving as trustee is not itself the practice of law — any competent adult may serve as trustee under N.C. Gen. Stat. §§ 32-2 and 3-25, and State Bar RPC 82 makes clear that a lawyer's duties as trustee flow from the fiduciary relationship, not the attorney-client relationship. Because the Law Firm was not chartered under Section 53-303(a), it was statutorily barred from serving as trustee — and, as a result, had no authority to sell Leonard's residence.
3. The same law firm cannot serve as successor executor either. Applying parallel reasoning under Chapter 28A, the Court held that a corporation may serve as personal representative only if authorized under North Carolina law, and Chapter 53's fiduciary-authorization scheme applies with equal force to executors as to trustees. Because the Law Firm was a professional limited liability company — a corporate entity under Chapter 57D — and not a chartered trust institution, it was disqualified from serving as executor under N.C. Gen. Stat. § 28A-4-2(5). The Court specifically rejected the argument that a firm's authority to render legal services, combined with the common practice of individual attorneys serving as fiduciaries, somehow extended fiduciary authority to the firm itself — that argument, the Court explained, conflates an individual attorney's authority with a corporate entity's authority.
4. The five-year delay in qualifying an executor deserved a real hearing. The Court held that whether Grace's more than five-year delay in qualifying as executor amounted to an implicit renunciation or rendered her unsuitable was a factual question that could not be resolved on the pleadings. The trial court erred by dismissing Devin's petition without first holding a fact-finding hearing on that issue.
Disposition: The Court of Appeals reversed the dismissal of Devin's petition, vacated the denial of his request for costs and attorney's fees, and remanded the case to the trial court for further proceedings — including the fact-finding hearing the trial court should have held in the first place.
Why This Decision Matters
In re Russo delivers a clear, practical rule for North Carolina estate planning: naming your own law firm as trustee or successor executor in a client's will simply is not legally effective. Only individually licensed attorneys — not the PLLCs or professional corporations through which they practice — may serve in those fiduciary roles unless the entity is separately chartered as a trust institution under Chapter 53. Practitioners who have used firm-as-fiduciary language in existing estate planning documents should revisit those instruments now, before an aging plan becomes an aging problem the way it did here — five years of dormant administration and litigation to sort it out.
The decision also reaffirms that North Carolina's no-contest clauses have real limits. A beneficiary who goes to court to enforce a will's terms, rather than to challenge its validity, is not “contesting” the will — a distinction that matters enormously to any beneficiary weighing whether litigation risks forfeiting an inheritance.
We are proud to have secured this result for our client, Devin Russo, and grateful for the trust he placed in our firm throughout this appeal.
Read the full opinion at the North Carolina Judicial Branch website.
Attorneys: James E. Hickmon and Jeremy T. Canipe, James E. Hickmon, PLLC, Charlotte, North Carolina
Case: In re Russo, No. COA25-321 (N.C. Ct. App. Jan. 7, 2026)