By Attorney Edward Jesson
In 2012, North Carolina’s mechanic’s lien statutes were overhauled. One of the biggest changes was the requirement for a lien agent to be appointed on certain jobs. We still frequently receive questions about lien agent requirements and what the consequences of a contractor’s failure to file a “Notice to Lien Agent” actually are.
Lien agents are only required on projects involving improvements to real property valued at over $30,000.00, except that a lien agent does not have to be designated for projects where improvements are being done to an existing single-family residential building, occupied by the owner, even if those improvements are valued over $30,000.00. That exception also applies if the contract is for the construction of accessory buildings where “the use of which is incidental to that residence.” Generally speaking, the appointment of lien agents is more prevalent in commercial construction projects but it is also sometimes necessary to designate a lien agent for residential projects. While designating a lien agent is generally the owner’s responsibility, there is a limited ability for “custom contractors” (as defined by the statute) to designate the lien agent on residential new construction projects as, presumably, custom contractors should be more familiar with these laws than the average home owner.
In order to fully protect its rights as a contractor to pursue a claim of lien on real property, a contractor must file a Notice to Lien Agent within 15 days after it first “furnishes labor or materials to the project.” While failing to file a notice to lien agent within 15 days is not necessarily fatal to any future lien claims, it may limit the contractor’s lien rights should it be necessary to file a lien at a later date. If a contractor fails to file a notice to lien agent and, prior to filing the notice or to filing a claim of lien on real property, the property is sold or otherwise encumbered, the contractor seeking to enforce its lien rights at a later date may have issues doing so. On the other hand, if a contractor fails to file a notice to lien agent and it then becomes necessary to file a lien, the contractor will likely be able to do so if the property has not been sold or otherwise encumbered.
It is important to note that the lien agent does not take place of the owner or upper tier contractor for purposes of service. Any claims of lien on real property or claims of lien on funds should be filed (where necessary) and served on the owner and any necessary contractors and/or suppliers.
It is best practice, in projects where lien agents are appointed, to file the notice of lien agent as soon as possible—even prior to beginning work. There is a portal to provide Notices to Lien Agents on LiensNC.com, but if you have any further questions, the attorneys at Jesson & Rains would be happy to help.
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Written by Danielle Nodar, Associate Attorney
Estate planning can be a daunting process for many people. Whether it is the stress of making decisions that will impact loved ones when we are gone or avoiding thinking about death or incapacity, many people are hesitant to create an estate plan. The confusion and anxiety surrounding this process have lead to some pervasive myths relatied to estate planning, which we have addressed below.
1. My estate is not big enough to require any estate planning.
There is a widespread myth that only the very wealthy need estate plans and that the average person does not have an “estate” to begin with. This is not true! When someone passes away, all of their assets become part of their estate; there is no minimum threshold of assets that make up an estate. Thus, at death, we all have an estate, it just varies in size and complexity based on the amount and types of assets you have. Oftentimes, people with fewer assets have the most issues during probate and could have really used the help of an attorney.
2. Estate Planning only deals with distributing property at my death.
Another myth is that your estate plan only deals with who will inherit your property when you pass away. This is also incorrect! A will also allows you to name people who may serve important roles when you pass away. In a will you will name an Executor to manage your assets and distribute them to the beneficiaries in your will at the time of your death. Without a will, you will not have any control over naming the person to manage you affairs at your death. Additionally, in North Carolina, the only way to name a guardian for your children in the event that both parents pass away while the children are still minors is to name the guardian in a Last Will and Testament. You can also name a trustee who is the money manager for inheriting children until they reach a certain age.
Additionally, estate planning involves planning for incapacity through durable powers of attorney and health care directives. With a durable power of attorney, you can name an agent to make business, legal, and financial decisions on your behalf if you become incapacitated. You can also name an agent to make healthcare decisions for you in the event that you are incapacitated and include specific instructions for them about your healthcare wishes. There is also the advance directive or “living will,” which includes your wishes relating to the withdrawal or withholding of life support if you are incapacitated and suffering from a medical condition where you will not likely recover.
3. If I have a will, I can avoid probate.
Having a will drafted will not always prevent your estate from having to go through probate to pass assets to your loved ones. If you pass away with a will, depending on the circumstances, your executor may have to file your will at the courthouse along with the initial probate application and then must comply with all the requirements of the probate process. This includes providing the court with an inventory of all of your assets at the time of your death, providing notice to any of your potential creditors existing at the time of death, handling creditor claims and paying creditors with estate assets, and making distributions of any remaining assets to your beneficiaries. While there are ways to avoid probate (for example, owning property joint with rights of survivorship, the surviving spouse allowance, and utilizing revocable trusts), sometimes merely having a will is not enough.
4. I do not need a will because my spouse will inherit everything.
In North Carolina, this is oftentimes false. The surviving spouse will remain owner of all joint property or accounts with right of survivorship. Also, every surviving spouse (regardless of the existence of a will) is entitled to a year’s allowance of $60,000 worth of the decedent’s personal property. If there are any other assets, a surviving spouse does not automatically inherit everything according to the North Carolina Intestacy Statute. For example, if you do not have a will and are survived by a spouse and only one child (or grandchildren, if that one child is deceased), the surviving spouse takes ½ of your real property, the first $60,000 of your personal property, and ½ the remaining balance of your personal property while the child inherits the remainder. If you do not have children but are survived by a spouse and parent(s), your spouse will inherit ½ of your real property, the first $100,000 of your personal property, and ½ the remaining balance of your personal property. Your parent(s) will inherit ½ of your real estate and any personal property remaining after the spouse’s share
Thus, without a will, you may be inadvertently leaving your assets to people who do not need them and leave your spouse in need. For example, if your children are minors, you may want your spouse to inherit your full estate to take care of your children.
Overall, all of these options are more complicated and involve more court oversight. It is much easier to create an estate plan with an attorney that ensures that your spouse inherits everything or is adequately taken care of when you pass away. If you or anyone you know have any questions regarding estate planning, please give Jesson & Rains a call.
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