How to Distinguish Estate Assets from Corporate Assets under North Dakota Law

Detailed Answer

When a person dies, their estate includes assets titled in their individual name or held jointly with rights of survivorship. Assets held by a corporation are separate and belong to that corporate entity, not the decedent’s estate. Under North Dakota law, you must examine title, corporate records, and governing statutes to determine where each asset belongs.

1. Understanding Separate Legal Entities

North Dakota law treats corporations as distinct legal persons. The Corporate Code defines a corporation’s legal existence, governance, and asset ownership:

• NDCC §10-19-01(3) defines a corporation as a separate entity that can own property, sue, and be sued. (NDCC §10-19-01)

2. Identifying Estate Assets

Estate assets include items owned solely by the decedent at death. To identify these:

• Review the decedent’s deed records and title certificates. Real estate titled in the decedent’s name alone typically forms part of the probate estate.
• Examine bank and investment account statements. Accounts in the decedent’s name—without corporate designation—are estate assets. NDCC Title 30.1 governs probate administration. For example, NDCC §30.1-17-01 requires personal representative inventories. (NDCC §30.1-17-01)
• Check joint tenancy arrangements. Assets with rights of survivorship pass outside probate to surviving joint owners.

3. Identifying Corporate Assets

Corporate assets are registered in the corporation’s name. Steps to confirm corporate ownership include:

• Inspect the corporate minute book and bylaws. These records list property held in the corporation’s name.
• Verify title documents. Vehicles, real estate, and patents titled to “XYZ Corp.” belong to that entity.
• Review stock ledgers. Ownership of shares—even if held by a family member—does not make corporate property part of the individual’s estate.

4. Key Documentation and Record Checks

Accurate classification turns on documentary evidence:

• Deeds and mortgage filings.
• Account statements showing account name and taxpayer ID numbers.
• Corporate resolutions approving asset acquisitions or dispositions.

5. Special Considerations: Commingling and Veil Piercing

If corporate and personal assets are commingled—such as using corporate funds to pay personal expenses—creditors or heirs may seek to pierce the corporate veil. North Dakota courts apply a multifactor test, looking at factors such as inadequate capitalization, lack of corporate formalities, and deception. While no single statute lists these factors, case law furthers the analysis. When veil piercing succeeds, corporate assets may become reachable by the decedent’s creditors or estate. Consult NDCC Title 10 for corporate formalities, including annual report requirements in §10-19-15.

Helpful Hints

• Always start by examining title documents and account registrations.
• Keep corporate records (minutes, resolutions, ledgers) up to date and separate from personal files.
• File a complete inventory with the probate court under NDCC §30.1-17-01 within 90 days of appointment.
• Watch for signs of commingling: personal expenses paid from corporate accounts or vice versa.
• If you suspect veil piercing issues, consult an attorney experienced in North Dakota probate and corporate law.