By Associate Attorney Danielle Nodar
Thanksgiving is one of the best opportunities of the year to slow down before the rush of the holiday season and spend quality time with our loved ones. During this time of relaxation and reflection, many people also think about how to they want to plan for their future and the impact it may have on their loved ones. The holiday provides a chance to catch up with loved ones we may not see during the year and open the door to discussing important topics as a family.
While the majority of adults consider having an estate plan important, nearly half of all Americans do not have a will, and even fewer have other documents that plan for incapacity. Unfortunately, there are countless issues that could arise without proper estate planning.
Without a will or living trust, your assets would pass according to the intestacy laws of North Carolina. This takes away the control you have over who inherits what when you pass away and could have huge implications on your loved ones. Additionally, in North Carolina, a will is the only way to name a guardian for your minor children in the event that both parents pass away.
Furthermore, some people may require more complex estate planning depending on their family situation (such as second marriages, a child with special needs, or care of minor children) and the type and amount of their assets. Estate planning through devices such as living trusts allows you to put plans in place to address the specific needs of your beneficiaries, avoid the probate process, and address more complex tax issues depending on your assets.
Finally, a comprehensive estate plan not only plans for what happens after death, but also addresses who would be responsible for making decisions on your behalf if you became incapacitated during your lifetime. This includes naming someone to make financial decisions on your behalf and someone to make medical decisions on your behalf. Without such a plan, your family may have to go through more drastic and expensive court proceeding to have you deemed legally incompetent by a judge.
While most people think of turkey, football, shopping, and the inevitable food coma when Thanksgiving comes to mind, it’s an opportunity to discuss planning for the future while everyone is gathered together in the spirit of family and gratitude. If you approach the topic with honesty, care, and thoughtfulness, it could help you get the ball rolling on making important decisions for your estate plan that will have a positive impact on your family for years to come.
By Attorney Kelly Rains Jesson
Back in July of 2016, we wrote about the Department of Labor’s dramatic new proposed overtime rule, which frightened a lot of business owners. A few months later, a judge invalidated the law, and the 2004 law has been in place ever since.
The new law is back, but a little less dramatic.
Everyone is somewhat familiar with the law that requires overtime to be paid to employees who work over 40 hours per week. However, the law exempts any employee employed in a bona fide executive, administrative, or professional capacity. This exemption is premised on the belief that these types of salaried employees generally earn higher salaries and enjoy other benefits.
The change in the 2020 law applies to the exception to this exemption – if a person is a salaried employee and employed in an executive, administrative, or professional capacity, they will still be entitled to overtime under federal law if they earn a “low” salary. Currently, an employee in this category who earns less than $455/week or $23,660 is entitled to overtime if they work more than 40 hours per week.
Starting January 1, 2020, these figures will increase. If an employee in this category earns less than $684 per week (equivalent to $35,568 per year for a full-year worker), they will be entitled to overtime if they work over 40 hours per week.
If you are a business owner and employ employees who may be affected by the change in the new law, we encourage you to contact an attorney or other human resource professional to ensure you comply with the law. There are other changes in the overtime law that may affect you and your business. More information can be found here.
By Associate Attorney Danielle Nodar
When creating an estate plan, people oftentimes consider their legacy and what they may be leaving behind for future generations. For many individuals, this legacy extends beyond their loved ones and includes considering donations to a charity they have given time or money to during their lifetime, a school or organization that has had a meaningful impact on their life, or a cause that they are passionate in supporting.
There are many methods of including a charity in one’s estate plan. One is naming a charity as a beneficiary in your will or trust. Just like any other asset that is left to an individual beneficiary, the terms of your will or trust designate how and when your assets are distributed for charitable purposes and your executor or trustee will be responsible for carrying out the distribution. When considering what to give to a charitable organization (often referred to as Section 501(c)(3) tax exempt organizations), it is important to remember that your gift can go beyond cash in a bank account, but can include assets like a stock portfolio, artwork, a car, or real estate.
When deciding how to contribute to a charity, an estate plan may also provide you with more options in determining how the donation is used. For example, if your donation is to a charity that fights a certain disease, your estate plan can specify that you want your donation to be used for research. You can also leave the donation to the charity directly and they make the overall decision as to how the funds are allocated.
In addition to the benefits to the charity, there may also be financial benefits to your estate and loved ones by including charitable giving in your estate plan. Gifts, during life or at death, to Section 501(c)(3) charities do not count towards the total taxable value of your estate. Thus, naming a charity as a beneficiary will reduce the value of your estate at the time of death, which can lower or eliminate the amount of estate taxes owed by your estate.
Depending on the size of the donation you are planning to make, you may also be able to create a donor advised fund (DAF), which allows you to make irrevocable charitable gifts to Section 501(c)(3) charities while taking advantage of tax benefits during your lifetime. With a DAF, most donors are immediately eligible for a tax deduction upon making the initial donation, donor contributions to the DAF are tax-deductible, and investment growth in the DAF is tax-free. You can also donate long-term appreciated securities without paying capital gains tax.
Another way to include charitable giving in your estate plan is through updating beneficiary designations of life insurance policies, annuities, IRAs, or other retirement plans. You can name a charity as a primary or contingent beneficiary and gift them all or a portion of the funds. While this option may be as simple as updating a beneficiary designation, whether or not is the best choice for charitable giving depends on a variety of factors, including what other assets an individual may have at the time of their death and the value of the asset being distributed through a beneficiary designation. For example, using charitable giving through retirement accounts may be a wise choice for some individuals as retirement accounts are some of the highest taxed assets in any estate. By gifting your retirement account, your estate tax burden is reduced because your estate will receive a federal estate tax charitable deduction on the value that is held in the account. Furthermore, the charity does not have to pay income taxes on this gift.
When considering your priorities in your estate planning, dedicating a portion of your assets to charitable giving is one of the ways to support causes that are important to you, even after death. Contact Jesson & Rains for assistance with considering your options for charitable giving in your estate plan.
October is National Women’s Small Business Month. Jesson & Rains is proud to represent and work for numerous women-owned businesses. Charlotte is an exciting place for women entrepreneurs. Last year, it was named the “#1 City in America For Female-Owned Business Growth.”
According to Andrew Soergel, Senior Writer for U.S. News and World Report, “[t]he annual State of Women-Owned Businesses Report – which pools data from the Census Bureau and the Bureau of Economic Analysis in determining the financial impact of such ventures – estimates America's total number of businesses headed by women ballooned 21% between 2014 and 2019 . . . . Overall business growth clocked in at just 9% during the same period. Revenues generated by women-led companies, meanwhile, climbed 21% to nearly $2 trillion, while the jobs they created rose by 8% to 9.4 million. Both growth totals eclipse the national average for companies headed by executives of either gender.”
Our very own Jesson & Rains partner, Kelly Rains Jesson, is a board member of the National Association of Women Business Owners (NAWBO). Founded in 1975, NAWBO is “the unified voice of over 10 million women-owned businesses in the United States representing the fastest growing segment of the economy.” NAWBO propels women entrepreneurs into economic, social and political spheres of power worldwide.
Kelly will be co-hosting a complimentary estate and retirement planning seminar with Joe Roseman, Jr. Managing Partner, who will be talking about retirement, at the South County Regional Library.
Sign up today!
*Determine if a TRUST is right for YOU
*Avoid the most common mistakes retirees make with their estate plan
*Reduce future costs and taxes for your FAMILY
*Understand how to avoid letting the NURSING HOME take your house
*Discover powerful retirement and estate strategies you never knew existed
RSVP using this link.
By Attorney Edward A. Jesson
The North Carolina Constitution, and North Carolina statutes, give contractors the right to file mechanic’s liens if they are owed money for completing “improvements” on real property. Improvements are defined in a statute, but generally speaking, anyone who performs work on real property, be it renovations, grading, architectural work, or otherwise, can file a mechanic’s lien in North Carolina.
The purpose of filing a mechanic’s lien is to have the debt owed to the contractor paid by the responsible party (often, the owner of the real property). A contractor has 120 days from the “date of last furnishing” to file the lien. The “date of last furnishing” is simply the last date that the contractor (or architect, etc.) performed work on the real property. It is best to be conservative with this date as courts have ruled in the past that punch list items performed after the date of last furnishing do not push that date out further. The mechanic’s lien has to be filed with the clerk of court in the county where the real property is located and formally served (like a lawsuit) on the property owner and any other contractors that may be affected by the lien. It is important that the lien be properly drafted when it is filed—if there is a mistake and the 120-day deadline passes, you cannot simply amend a lien. Instead, the lien must be released and a new lien filed in its place.
The contractor then has 180 days (again, from the date of last furnishing) to “enforce” the lien. To enforce a lien, you file a lawsuit and ask the court declare that your lien is valid and confirm the debt amount. Oftentimes, a lien enforcement lawsuit will also include other claims, such as a claim for breach of contract. If the contractor is successful, he/she can then request that the court order what is essentially a foreclosure sale on the property to satisfy the debt. If there are other liens attached to the property, like a mortgage, the contractor will have to get in line. The existence of other liens is something to take into account when evaluating the benefits of moving forwards with a lien enforcement action.
In reality, most lien situations are resolved prior to a foreclosure sale, because (1) property owners don’t want their property sold and (2) attorney’s fees may be awarded in the lien enforcement lawsuit. North Carolina’s mechanic’s lien statute contains an attorney’s fee provision that awards attorney’s fees to the prevailing party. That is very rarely the case in the United States (normally, parties are responsible for their respective fees, regardless of whether they win or lose), so it can be a powerful negotiating tool.
If a contractor loses, they may have to pay the other side’s attorney’s fees, which can often total more than the debt owed itself, so it is important to seek the advice of a construction lawyer when evaluating whether you should file a mechanic’s lien.
There are many other factors to consider when getting ready to file a lien, and there are other types of liens that can be filed by subcontractors and others involved in the construction process. Should you have an issue with collecting money from a client or have had a lien filed against your property, please give us a call to help with your issue.
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