By Associate Attorney Danielle Nodar
After creating your estate plan, you should review your documents after a major life event such as marriage, divorce, births, deaths, or moving to a new state. While most properly drafted estate planning documents are still valid after moving to a new state due to the Full Faith and Credit Clause of the U.S. Constitution, which says that the states must recognize the legislative acts, public records, and judicial states of the other states within the U.S., there may be some state-specific requirements that could impact how the will is interpreted and the difficulty of the overall probate process in the new state.
For example, most states require that the testator, the signer of the will, sign his or her will before witnesses who must also sign the document. The rules between the states vary as to who can serve as a witness and how many witnesses are needed in order for the will be to be valid. Also, some states require that the signatures of the testator and witnesses be notarized. While North Carolina does not require a will to be notarized, having a notary validate the signatures of the testator and witnesses makes the will “self-proving,” which makes the probate process easier because the court can accept the will without contacting the witnesses who signed it first. For people with out-of-state wills, tracking down witnesses could be difficult.
Another important consideration when moving to a new state is whether your chosen executor can or wants to serve in your new state. For example, North Carolina requires that all personal representatives who reside out of state post a bond, with the amount of the bond based on the value of the probate assets. The bond requirement can be waived in a will for any North Carolina resident executors, but it cannot be done for executors residing outside of the state. In order to obtain the bond, the executor will need to locate a surety company, pay a bond premium, and pass a credit check. Additionally, an out-of-state executor must appoint a resident agent residing in North Carolina to accept all legal documents for the estate. This typically results in the executor hiring a probate attorney to serve in this role. The entire bond/resident agent process can be avoided altogether if the executor resides in state and the will expressly waives the bond requirement. For people without friends or family in the state, there is also the option of creating an estate plan that avoids probate altogether through the use of a revocable trust.
Finally, different states have different requirements for witnessing and notarizing durable powers of attorney, healthcare powers of attorney, and living wills. These are documents that third parties would be reviewing and analyzing in the event of an emergency. Even though the documents may be valid under the Full Faith and Credit Clause, you don’t want to risk having your agents have to argue the validity of the document during an emergency. We often recommend that our clients update these documents to conform with North Carolina procedural requirements.
These kinds of small but significant differences in state law that could impact whether your estate plan needs to be revised when moving to a new state. Please call Jesson & Rains if you need to determine that your existing estate plan still works based on your new location and to ensure that it may not be unnecessarily difficult for your loved ones to probate your will in North Carolina.
By Attorney Edward Jesson
In most counties in North Carolina (if not all), every case filed in District or Superior Court there will require some form of mandatory alternative dispute resolution (“ADR”). Generally speaking, if a case is filed in District Court the alternative dispute resolution method will be arbitration. If a case is filed in Superior Court, the alternative dispute resolution method will be mediation. Further, many contracts contain provisions that provide if a dispute arises the aggrieved party must submit their claim to arbitration instead of or before filing a lawsuit.
A third-party neutral person (the mediator) is selected by the parties involved in the dispute, or, if the parties cannot reach an agreement, appointed by the Court. Generally, the mediator will be a local attorney selected by the parties for his or her expertise in the law that is in dispute. While participation in court ordered mediation is mandatory, the nature of mediation means that the mediator cannot force the parties to resolve their dispute, the mediator can only make his or her best effort to get the parties to compromise. Most of the time, the parties will each have the opportunity to give an opening statement and discuss the case together in the same room. Then the parties will move into separate rooms and the mediator will go room to room, discussing the strengths and weaknesses of each party’s case trying to broker a deal to settle the dispute. If the parties come to an agreement, that agreement is reduced to writing and will typically be enforceable by the court. However, if the parties cannot come to an agreement, the mediator cannot force the parties to settle. The mediator is only there to facilitate a negotiation as opposed to being there to decide the case.
In contrast, the arbitrator is there to decide the case. The arbitrator will decide which party is entitled to relief and what that relief is based on the claims presented. The arbitrator, in effect, gets to act like a privately hired judge and jury in deciding points of law and factual issues based on witness testimony. In North Carolina District Court, the parties are ordered to an early arbitration which is limited in time to one hour. At the end of that hour, the arbitrator (who is appointed by the court from a panel) decides who “wins” the case. It is important to note that in mandatory district court arbitration, if one party disagrees with the decision (which almost always happens), that party can appeal the arbitrator’s decision, and the parties will simply continue with the litigation process.
That is in stark contrast to voluntary arbitration: In voluntary arbitration, the arbitrator (again, selected by the parties for his or her expertise in law being contested) is permitted to make a final decision, and, absent a very limited set of exceptions, the arbitrator’s decision is final and can generally be enforced by the court if need be. Often, contractual arbitration is governed by the American Arbitration Association (“AAA”). AAA has a certain set of rules and requires the parties to select arbitrators from certain “panels.” While one advantage of arbitration is often said to be that it is more cost effective than litigation, that is not always the case, especially if you get involved with three arbitrator panels from the AAA or for particularly complex cases.
Like most things involving disputes and dispute resolution, there is no “one size fits all” approach. If you, your business, or someone you know, is involved in a legal dispute, it is best to seek counsel of an attorney that has experience dealing with that specific type of dispute. As always, the attorneys at Jesson & Rains, PLLC are ready and willing to help!
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Kelly Rains Jesson