By Associate Attorney Katy Currie
National Estate Planning Awareness Week was adopted in 2008 to help the public understand what estate planning is and why it is important for all people, not just the uber-rich. An “estate” does not necessarily mean something like the Biltmore Estate. Everyone has an estate, even small or insolvent estates. Estate planning is more than money – estate planning allows you to gain control and peace of mind over difficult and unpredictable situations. We have previously written about the difficulties caused by dying without a will in North Carolina and the pitfalls of the probate process in North Carolina; however, many of the “worst-case” scenarios can be avoided with proper planning. Let us help you plan for emergency scenarios and protect your business and personal assets for the benefit of your loved ones through estate planning. Unfortunately, COVID-19 has shown us that there are no guarantees, but it has also highlighted what is most important to each of us: family. Estate planning allows you to plan for what happens when you pass away, including naming a trusted person to handle your final affairs, name guardians for minor children, and distribute your assets according to your wishes. In addition to planning for death, our office drafts durable and health care powers of attorneys, where you can name agents to make both financial and medical decisions for you if you are incapacitated and cannot communicate. There is no reason to wait to do planning, and as we age and the pandemic continues to be a part of our “new normal,” you should get a plan in place before it is ever needed. If you do become incapacitated or ill, it may be more difficult or impossible to get documents in place, as you must have testamentary capacity to create valid estate planning documents. Some of our clients delay estate planning because they do not have any friends or family members they trust to serve in fiduciary roles. In some circumstances, members of the firm may serve in these roles for the client if the client feels comfortable. It is better for you to take control and name someone yourself than to have the government appoint someone in an emergency or when you pass away. National Estate Planning Awareness Week is a great time for you to take CONTROL! Please call Jesson & Rains if you have questions about getting your estate plan in order or updating an existing estate plan. While You Build, We Protect.
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By Attorney Edward Jesson
WARN notices have once again been in the news lately: a lawsuit was filed against a prominent Chicago restaurant after it closed, alleging that it failed to properly notify its employees of its closing; Wells Fargo issued a WARN notice regarding the layoff of over 500 employees in South Carolina. But what is a WARN notice and why should you, as an employer or an employee care? The Worker Adjustment and Retraining Notification Act (WARN) is a federal law that was enacted in an attempt to protect workers when layoffs are inevitable. The WARN Act applies to employers with 100 or more employees (excluding part time workers) and generally provides that those employers must provide at least 60 days advanced written notice of a plant closing or mass layoff which would affect 50 or more employees at a single site of employment. It is important to note that “plant closing” does not only refer to manufacturing plants or similar things, but in fact refers to a single site of employment. There are exceptions to the requirement that the employer provide 60 days written notice. For example, natural disasters, unforeseeable business circumstances, or under circumstances where a business is actively seeking capital and issuing the WARN notice could jeopardize that, are all circumstances in which the employer may not necessarily have to issue the WARN notice. The WARN notice provides employees who are losing their job with information regarding assistance provided through the relevant state’s Rapid Response Dislocated Worker Unit (“RRDWU”). Upon receipt of a WARN notice, the RRDWU coordinates with the employer to provide on-site information to the workers about future employment opportunities and retraining services, such as job search assistance and on-the-job and/or classroom job training programs. If any employer violates WARN, the employer may be liable to each affected employee for an amount equal to back pay and benefits for the period of the WARN violation, which can be up to 60 days. Back pay for 100 employees over a 60 day period can obviously be a significant amount, especially to an employer that is already forced to lay off employees. If you believe that your company may have to issue a WARN notice please do not hesitate to contact the attorneys at Jesson & Rains, PLLC to assist. By Associate Attorney Danielle Nodar
As estate planning attorneys, we counsel people on how to ensure that their loved ones are taken care of at their death. Oftentimes, life insurance is a tool we recommend for a variety of different reasons depending on the client’s assets, debts, and overall estate planning goals. One reason that we recommend life insurance is that the proceeds pass outside of probate, which means that the beneficiary of the policy will receive the payout without an estate needing to be filed with the probate court. This is beneficial since probate takes about six months to a year before the inheritance can be distributed to heirs. With life insurance, the beneficiary will get the payout much more quickly which will help alleviate some of the financial burdens that your loved ones may be faced with such as funeral expenses, medical bills, or mortgage payments. Since life insurance passes outside of probate, it is not considered a probate asset and is not subject to the court’s rules for such assets. Probate assets must be used to pay the deceased person’s debts. Anything remaining after all debts are paid can be distributed to an heir. For more information about what is a probate asset, please see this blog post. If you only have probate assets to pass to loved ones, they may not inherit anything depending on your debts at death. Since life insurance made payable to a named beneficiary is not considered as a probate asset, your beneficiary may not be required to use those funds to pay off your debts at your death. This provides some assurance if you are worried that you may not have enough assets to provide your loved ones with financial security at your death. In the case of a surviving spouse, life insurance can be used to ensure that they will be able to pay your joint and some separate debts at death without having to deplete other assets. North Carolina holds the surviving spouse liable for medical and funeral expenses incurred by the deceased spouse, regardless of whether there are sufficient probate assets to cover them. By having life insurance, you can make sure your spouse will be taken care of and able to pay those debts at your death. Life insurance can also be a valuable estate planning tool for clients who own businesses, as life insurance can be purchased to allow a business to continue after the death of an owner. For example, life insurance can be used to fund a buy-sell agreement between business partners. A buy-sell agreement sets the terms and prices that a surviving partner must honor in order to buy the shares of the business partner who leaves the business or passes away. If one partner dies, the surviving partner will receive the death benefit and can use those funds to pay the deceased partner’s heirs for the deceased partner’s ownership interest in the company. This allows the surviving partner to keep the business while compensating the deceased partner’s family. These are just some of the benefits and potential uses for life insurance as part of your estate plan. At Jesson & Rains, we understand that a comprehensive estate plan involves both estate planning documents and products like life insurance to make sure that your loved ones are adequately protected and provided for at your death. If you have questions about estate planning, please call Jesson & Rains! By Attorney Edward Jesson
Recently, the North Carolina legislature passed House Bill 488, key sections of which will go into effect on October 1, 2023. While most of the changes made to this law relate to the energy efficiency rules found in the North Carolina Building Code, there is one big change for people in the construction industry. North Carolina General Statute 87-1(a) governs who is required to obtain a North Carolina general contractor’s license prior to performing or bidding on work. The general rule was that any person or business that bid on or performed work which was valued at more than $30,000.00 was required to have a general contractor’s license prior to bidding on or performing that work (with a few exceptions). However, House Bill 488 amends the language of N.C.G.S. § 87-1 to state the following: [A]ny person or firm or corporation who for a fixed price, commission, fee, or wage, undertakes to bid upon or to construct or who undertakes to superintend or manage, on his own behalf or for any person, firm, or corporation that is not licensed as a general contractor pursuant to this Article, the construction of any building, highway, public utilities, grading or any improvement or structure where the cost of the undertaking is forty thousand dollars ($40,000) or more, or undertakes to erect a North Carolina labeled manufactured modular building meeting the North Carolina State Building Code, shall be deemed to be a "general contractor" engaged in the business of general contracting in the State of North Carolina. The extra $10,000.00 will allow many people who are not licensed with the state to bid on projects that they would have not been legally permitted to bid on before this amendment. It is important to note that the new law only applies to projects or contracts that are entered into after October 1, 2023—the new law does not apply retroactively. It is also important to note that whether you need a license to perform a certain item of work has no bearing on whether that work needs to be permitted or inspected by the relevant County. This change in the law does not mean that work which would require a building permit no longer requires that permit. This is a big change in the law that will likely have an effect on the building industry in North Carolina as a whole—especially on those projects ranging from $30,000 to $40,000 where there will probably be much more competition. If you need assistance with licensure, or other legal issues in the construction industry, don’t hesitate to reach out to the attorneys at Jesson & Rains. By Associate Attorney Katy Currie
August is National Make-A-Will Month! While it may not be as fun as celebrating one of August’s other “holidays,” like National S’mores Day (August 10) or National Dog Day (August 26), it is a reminder of the importance of having a will in place to ensure that your loved ones are provided for at your passing. Some of the most important components of a will are: 1) Naming Beneficiaries to Inherit Your Assets: A will allows you to specifically provide for the persons or charities of your choosing at your passing. If you pass away without a will in North Carolina, the North Carolina Intestacy Statutes will determine where your assets will go based on your next-of-kin. For any property that was owned joint with rights of survivorship, which is frequently the case with many assets owned by spouses, the asset will pass automatically to the surviving party. As will assets that have a designated beneficiary via a beneficiary designation. However, this is not the case for any assets that are just in your name when you pass away, even if you are survived by your spouse. Under the North Carolina Intestacy Statutes, most people are surprised to learn that your spouse does not automatically inherit everything. Sometimes parents or half-siblings inherit. Thus, without a will, you may be inadvertently leaving your assets to people who do not need them, or you may be leaving assets to minor children instead of your spouse, who may need the funds to care for your children. A will also allows you to leave assets to more distant relatives, friends, or charities that would be ineligible to inherit through intestacy. 2) Naming an Executor. Your will allows you to name an Executor to manage your assets and distribute them to your beneficiaries at the time of your death. Without a will, you will not have any control over naming the person to manage your affairs at your death and a family member or friend will have to volunteer and seek the court’s approval before being allowed to serve. If someone has a higher degree of kinship than the prospective Executor, they must sign a waiver of their right to serve as Executor (i.e., creating more paperwork for your loved ones). If the person will not waive their right to serve, this may result in a person who is not as well-suited for the job serving as an Executor just because they have a higher degree of kinship than the prospective Executor. 3) Waiving the Executor’s Bond. In North Carolina, an Executor has to pay a bond based on the value of the assets unless (1) it is waived in a will or (2) all heirs sign a waiver to waive the requirement (again, more paperwork for your loved ones). If there are minors or incompetent heirs, they cannot consent, and the bond will be required. Any Executor who is not a North Carolina resident must pay a bond, regardless of the waiver. By planning with a will, you can waive the requirement altogether and make sure your desired Executor is capable of serving. 4) Name a Guardian and Trustee for Minor Children. In North Carolina, the only way to name a guardian for your children if both parents pass away is to name the guardian in a will. Without a will, multiple family members may seek to be appointed a child’s guardian, which may result in fighting or someone serving that you would not have chosen yourself for that role. You can also create a testamentary trust in your will, which allows you to have more control over the age when your children inherit. With this trust, your named Trustee will manage and distribute assets for your children’s benefit until they reach the age where you designate that they can manage the funds on their own. Without a will, any person eighteen years or older can inherit any type of asset without the benefit of a Trustee’s oversight. If you do not have a will, or your existing will does not accurately reflect your current wishes, use Make-A-Will Month to get a plan in place so that your loved ones are not left with questions or complications if you pass away. Please call Jesson & Rains if you would like to discuss how a will can be tailored to your specific needs and wishes! By Zach Markle, Law Student Intern
A contractor in North Carolina is smart to triple check their state government contract bids because inaccurate bids sometimes cannot be undone. North Carolina divides mistakes in bids into two classes: “judgment error” mistakes and “clerical error” mistakes. A “judgment error” mistake may not be undone once the bid is submitted. If a contract submits a bid and makes a mistake in judgment, like misjudging the amount of materials or the length of time needed for a project, he may be stuck with the bid as presented if the contract for the work is accepted. And if that is the case, any shortage in revenue to cover excess costs may have to be paid out of pocket. Further, if the contractor refuses to accept the project, he may forfeit their bid deposit or bid bond and potentially be subject to other penalties. If a mistake in the bid is a “clerical error,” the consequences are not as severe. North Carolina describes “clerical errors” as “unintentional arithmetic error or unintentional omission” that is related to, among other things, the work, labor, and materials included in the bid. This usually arises when a button is accidentally pressed on a calculator during the input of costs into a spreadsheet or bid software, but it can arise in other ways as well. If the mistake is found to be a “clerical error” and the bid was submitted in good faith, and the contractor can prove it during a hearing with the right evidence, the agency in charge of the project may allow the contractor to withdraw their bid from consideration without having to forfeit their deposit or bond. In order for a contractor to withdraw their bid, they must submit a request to withdraw in writing within 72 hours after the opening of bids, unless a longer period is specified in the instructions to bidders. They must then attend a hearing by the agency responsible for the project where they will be heard on whether or not they can prove that their bid is eligible for withdrawal. To make sure you do not spend needed resources or have to deal with added stress to an already stressful process, triple check those bids before submitting them! Should you have any questions about the process or need additional help, please don’t hesitate to call Jesson & Rains today. |
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