 By Associate Attorney Danielle Nodar
Financial Planning Month is observed in October, and it is a great time to reassess your finances, budgets, and plan for achieving financial goals before the holiday season and beginning of a new year. When creating an estate plan for clients, we look beyond planning for death or incapacity through estate planning documents and discuss a client’s current financial plan and strategy. As we are not financial planners or advisors, we often advise our estate planning clients to work closely with financial professionals so that their estate plan works with their financial plan and goals. One of the advantages of working with a financial professional is they can help you find the right balance that works for you so that you can save for the future, pay off debts, and provide for your loved ones if you pass away. The plan that you create with your financial planner oftentimes works in conjunction with your estate plan. For example, a financial planner can assist you with planning and saving for retirement. This works to assist you with goals for your lifetime, but also with your estate plan because you can designate a beneficiary (either an individual person or an entity like a trust or charity) to receive any remaining retirement funds when you die. The beneficiary of your choosing will receive the remaining retirement funds, even if your will says otherwise, as funds distributed using a beneficiary designation pass to a beneficiary outside of probate. Furthermore, there are different distribution timelines and tax consequences depending on whether you name a spouse, minor child, disabled person, or charity as a beneficiary. Another important factor of financial planning is exploring life insurance. Just like retirement, life insurance is distributed directly to the beneficiary you name and does not pass through the probate estate. However, life insurance does not have the same restrictions on use of funds as retirement can (unless a trust is the beneficiary), is oftentimes passed to loved ones tax free, and is usually distributed more quickly. This can result in a tremendous burden being lifted as your loved one will receive money for expenses like funeral expenses, medical bills, or even a mortgage payment while they are grieving. It can also ease the burden of paying back your debts. If you pass away with debt, some of your assets may be included in your probate estate to pay those final debts, which can result in your loved ones not inheriting anything if your estate is insolvent. Life insurance will get to the beneficiary regardless of probate assets. It is important to discuss the strategies and tools for creating a financial plan that alleviates stress for you and your loved ones while building wealth for your future. If you would like a referral for a financial planner, please reach out to Jesson & Rains. We feel strongly about the peace of mind these professionals can provide and believe it is an important part of the estate planning process.
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 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. As we previously reported, in 2018, it was named the “#1 City in America for Female-Owned Business Growth.” Women-owned business growth continued across the country in 2019. Unfortunately, due to the pandemic, Barbara Weltman reports that the number of women-owned businesses fell by 25% from February to April 2020. However, there are plenty of indications that women entrepreneurship is back on the rise. Participation in women’s networking groups and trade associations is key. Attorneys Kelly Jesson and Danielle Nodar are members of the following groups: National Association of Women Business Owners (NAWBO), Women Lawyers of Charlotte, National Association of Women in Construction (NAWIC), and Women in Networking. Please reach out to Kelly or Danielle if you’d like to drop in on a meeting one day!  By Associate Attorney Danielle Nodar
There are plenty of things new parents need to tackle on their to-do list to provide the best environment and future for their child. However, one big thing that often gets overlooked is planning for the unexpected with estate planning. Some of the factors new parents should keep in mind when considering estate planning are: 1) Naming a Guardian for Minors One of the most important considerations a parent can make is naming a legal guardian for their minor children. A guardian is the person who will assume responsibility for all aspects of your child’s care if they are under eighteen when you pass away. This person will make all medical decisions, educational decisions, and step into the role of the parent in the eyes of the law. In North Carolina, the only way a parent can designate a guardian is through their Last Will and Testament. A guardian named in a will is usually appointed by a court unless the person is unfit or incapable. Without a named guardian in a will, a court chooses the guardian based on its determination of what is in the best interest of your child. This may result in loved ones arguing over your children or the guardian being someone you would not have chosen. 2) Managing Inheritance for Minors with Trusts If you leave assets outright to a minor child, those assets will be kept in a custodial account to be managed by a surviving parent or legal guardian. The adult in charge will manage the money for the child’s benefit until the child turns eighteen or twenty-one and inherits the remaining assets outright. Even when a child reaches the age of majority, many parents worry about a child’s ability to manage finances on their own, especially if it is a large amount of money being inherited. To have more control over your child’s inheritance, many parents set up a trust for the benefit of their children. Parents can create a trust with either 1) a revocable living trust, which is a separate trust agreement that is funded by the parent with their assets during their lifetime or 2) a testamentary trust, which is created in a will and only goes into effect at the death of the parent. Both types of trusts allow the parents to name a Trustee to manage any inherited assets for children until the child inherits outright at a later age, such as twenty-five, for example. The Trustee will manage the assets and make distributions of the funds for your children’s health, education, maintenance, and support according to the terms of the trust. You can determine how much discretion you give the Trustee is managing the trust, and you can also provide them with clear guidelines of what are permissible expenses. 3) Updating Beneficiaries on Financial Accounts If you have accounts that allow you to name a beneficiary, such as life insurance, retirement, or investment accounts, those funds will automatically go to the named beneficiary, even if your will names different beneficiaries. If you are creating or updating your will to include children, it is important to review your beneficiary designations to make sure that those assets will go where you want them to and that your plan works with both your will and beneficiary designations. 4) Updating Your Living Documents Another key part of estate planning is naming who would make legal or medical decisions for you in an emergency where you cannot make those decisions for yourself. By naming agents under a healthcare power of attorney and durable power of attorney, you can ensure that if you become incapacitated, someone you trust can access your funds to care for you and your child and make medical decisions for you until you recover. 5) Considering Life Insurance Many new parents consider life insurance to ensure funds are available for your children’s needs if they pass away while their children are still young. There are many factors to consider when looking into life insurance but finding a trusted insurance professional to assess your family’s specific needs is the first step in the process. Finally, if you do create a trust for your child, you can name the trust as a beneficiary of the life insurance policy, which would allow those funds to be used by the Trustee for your child’s benefit according to the trust’s terms. If you have questions about how to create or update your estate plan to best protect your family, please call Jesson & Rains!  By Attorney Edward Jesson
Last December, Congress passed the Copyright Alternative in Small-Claims Enforcement Act of 2020—better referred to as the CASE Act. The CASE Act instructed the U.S. Copyright Office to create the Copyright Claims Board (“CCB”) as an efficient and user-friendly option to resolve copyright disputes where the amount disputed is less than $30,000.00. Generally speaking, before the CASE Act, a copyright holder would have had to file a lawsuit in federal district court in order to enforce his or her copyright. The problem with this is that federal litigation is both expensive and time consuming. Many professional content creators and small businesses simply could not afford to enforce their rights under copyright law. Moreover, the people who were infringing on those rights knew that in all likelihood nothing would be done as a result of their copyright infringement. The CCB will be permitted to hear three different types of claims: (1) Creators bringing infringement claims against people infringing on their copyrights; (2) Users can request that the CCB issue a statement ruling that their use of something does not infringe on the copyright owner’s rights; and (3) Users who receive a Digital Millennium Copyright Act (“DCMA”) takedown notice (similar to a cease and desist) are able to challenge that notice if they feel it is inaccurate. It is important to note that, if the copyright holder prefers, they can still bring the claim in federal district court (assuming all other jurisdictional factors are satisfied) or move forwards with mediation and arbitration. Also, the Respondent can “opt-out” of the CCB proceeding, requiring the copyright holder to move forward with a federal lawsuit. However, there are several incentives for those named as respondents in CCB proceedings to opt-in to the proceeding. For example, on top of the cost of litigation in federal court, a successful plaintiff in a federal proceeding can be awarded up to $150,000.00 per work infringed whereas, in the CCB setting, that amount is limited to $15,000.00 per work infringed. The CASE Act also caps the damages that can be awarded by the CCB at $30,000.00 whereas, in federal court, those damages are unlimited. Once the CCB is fully established (as of writing, it is currently still in the rule making stage), it will provide small businesses and individual creators a cost and time effective way of enforcing their copyrights under federal law. If you believe that your copyright has been infringed or that you have been wrongly accused of infringing on a copyright, please call the attorneys at Jesson & Rains for a consultation on the matter today.  By Attorney Kelly Jesson
We previously wrote about the importance of keeping good business records in order to avoid personal liability for business debts. However, did you know that certain business records can act as estate planning tools? Your interest in your business, whether an LLC interest or corporate stock, is personal property that you can leave to a family member when you pass away. Unfortunately, it will go through probate unless you transfer it to a trust or enter into a transfer-upon-death (TOD) or joint with rights of survivorship agreement with your heir. The court collects a fee based on the amount of personal property that goes through probate, so if your business is worth some money, you want to avoid this. What if you have a business partner? Perhaps you don’t want to do business with his/her spouse or child if your partner passes away? That’s where an operating agreement or a shareholder’s agreement comes in handy—in either of these agreements, the owners can agree that if one of them passes away, the other will buy out their interest. This is helpful for the survivor, who will remain in control of the company, and this is helpful for the deceased owner’s family, who will get a sum of money. These agreements (also called buy-sell agreements) are oftentimes funded with life insurance, to ensure that there is liquid cash available to pay the family. In either of these agreements, the owners can promise the other not to transfer their business interest to third parties while they’re alive, which is also helpful for control purposes. The parties can agree to buy the other out when other “triggering events” happen, such as a partner’s bankruptcy or divorce. You don’t want one of these events to cause the forced sale of all or part of the business. It is important to put a plan in place to prepare for the unexpected (that frequently happen). If you or someone you know needs assistance putting an operating agreement or shareholder agreement in place, or incorporating their business into their estate plan, please give Jesson & Rains a call! We offer flat fee packages for these formation documents. We also offer flat fee annual plans that include preparing annual meeting notices and minutes, filing annual reports with the Secretary of State’s office, and other legal services. More information can be found here.  By Associate Attorney Danielle Nodar
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! |
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