By Associate Attorney Danielle Nodar
While preparing a child to start college in the fall, one important consideration is creating legal powers of attorney allowing you to make healthcare, financial, or legal decisions for your child in the event of an emergency. Once a child turns eighteen, the child is considered an adult by law, which means that parents are no longer given access to their child’s financial, health, and educational records without the adult child’s consent. In an emergency, a child may not be able to give consent, and having power of attorney documents in place in advance will grant the parent access to their child’s information without having to resort to court intervention.
A Healthcare Power of Attorney allows a person to name an agent to make healthcare decisions on their behalf if the person is unable to communicate their wishes to their medical providers. It also authorizes medical providers to share private health information with a designated agent. Without these authorizations, medical providers are legally prohibited from releasing such information. No parent should be put in the position of being in a different state from their child and being told that their child has been hospitalized, but the hospital is unauthorized to release any other information about the child’s condition or care. A Healthcare Power of Attorney can avoid this situation and allows parents to easily step in and access medical information during an emergency. It also allows your child to include instructions relating to their healthcare, including wishes related to organ donation or wishes relating to religious or cultural practices. The student can keep these documents on file with their university or medical provider so that it can be easily accessed if needed.
A Durable Power of Attorney allows a person to name an agent to make legal, financial, and business decisions on their behalf if the person becomes incapacitated (unable to handle their affairs). It can be used to allow parents to help pay a child’s bills, access the child’s personal bank account or education records, or manage the child’s finances or legal decisions in an emergency. Without a Durable Power of Attorney, you would not be able to manage these decisions during an emergency without first being appointed by a court as the child’s legal guardian.
If a child is going to college outside of North Carolina and does not have these legal documents, the laws of that state will control who may be able to make decisions on behalf of the child if they are incapacitated. For example, in North Carolina, if an adult does not have a health care power of attorney and is unmarried, the majority of the child’s parents can make healthcare decisions if the child is unable to. This means that parents will be joint decision-makers and must agree on all actions taken by doctors. However, other states may be different. There might not be a default decision maker for healthcare decisions in your child’s state. In North Carolina and most states, there is no default decisionmaker for legal and financial decisions, so a parent must seek to be appointed the child’s legal guardian by the courts. This process is more costly, stressful, and time-consuming than having documents in place before the need for them arises. If your child resides in North Carolina but is going to school out of state, these powers of attorney will allow you to act on behalf of your child in an emergency regardless of the other’s state’s rules on default decisionmakers as North Carolina documents will be valid in another state.
Parents should know that the adult child must be the one to hire the attorney, and they are free to name anyone they want to serve in these roles. For an adult child who may be reluctant to give their parents decision-making power, they can be assured that these documents only go into effect after doctors certify that they cannot make their own decisions. During normal circumstances, the young adult still maintains their privacy and autonomy over their healthcare and financial decisions; these documents only apply in an emergency. Finally, now that your child is entering adulthood, it may be a good time for you to review your estate plan to make sure that it still meets all of your goals. Please call Jesson & Rains if you have questions about these documents or want to learn more about protecting you and your child’s interests through estate planning.
By Attorney Edward 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.
By Associate Attorney Katy Currie
Estate planning can be a daunting process. Whether it is 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 has led to these four common estate planning myths:
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 allows you to name people who may serve important roles when you pass away. For example, a will allows you to name an executor to manage your assets and distribute them to the beneficiaries stated in your will 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. Additionally, in North Carolina, the only way to name a guardian for minor children (if both parents pass away while the children are still minors) is 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.
Moreover, estate planning involves planning for incapacity through both durable and health care powers of attorney. 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. A bonus myth: If you become incapacitated, your spouse can automatically do these things for you. Unfortunately, this is not true. Without a durable power of attorney, your spouse would have to become your court appointed guardian.
With a health care power of attorney, you can name an agent to make medical decisions for you if you become incapacitated. Your health care power of attorney allows you to include specific instructions for your health care agent regarding your health care wishes. There is also an 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. Your executor 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, 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.
There is no law in North Carolina that states that your surviving spouse gets 100% of your assets. The surviving spouse will remain owner of all joint property or accounts with right of survivorship. The surviving spouse gets any assets where they’ve been named as a beneficiary, like life insurance, for example. Also, every surviving spouse is entitled to a year’s allowance of $60,000 of the decedent’s cash or personal property. Thus, this oftentimes results in the surviving spouse getting everything, but not every time.
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 there are more children, the percentage to the surviving spouse drops to 1/3. 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.
If any of this concerns you, it is important to use an attorney to draft the estate plan specific for your situation. For further assistance with your estate planning needs, give Jesson & Rains a call!
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