Legal Question in Wills and Trusts in North Carolina

I am assuming that your father lives in NC and that the land is located in NC. If not, then you need to direct your question to an estate planning, elder law or real estate attorney in the state where it is located.

From your post, its not clear whether your sister was convicted and ordered by the court to pay restitution or whether she was sued civilly and the creditor got a money judgment. Either way, if your father passed and this was not resolved, then the judgment could be enforced against the property as you would own it as a tenancy in common. Is the property paid for? What is it worth? The creditor may or may not make you sell it. However, if you ever did want to voluntarily sell it, then any judgment/criminal restitution would have to be paid out of your sister's share of the proceeds.

You can do one of 3 things but your sister has to be willing to cooperate and your father must be mentally competent:

(1) make a new deed conveying the land from you and sister with life estate to father to you solely with a life estate for father.

(2) you can buy out the remainder interest of your father (the property will have to be appraised and your father's life and the remainder interests will have to be valued to determine what your sister's share is worth); you can make any payment either directly to your sister or you can arrange to pay what is owed towards her embezzlement restitution/judgment.

Your sister may have qualms about just giving up her share unless you either buy her out or some other provision is made in your father's will for her and/or her children. If that is the case and you can't buy her out now, then your father will have to make a will or trust which somehow takes care of your sister and her children in a different way. He needs to be mentally competent for this. While you can use the power of attorney to sign for him, there may be some restrictions in the power about an agent using the power to make gifts to himself. You need to carefully review the language in the power.