We are often asked by potential clients why they should have a will drafted if they do not have a lot of assets or if they intend for their spouse to inherit everything. Below are the top five reasons:
1. To ensure the proper people inherit your property. If you do not have a will, depending on your particular circumstances, your spouse may not inherit everything under North Carolina intestacy laws. Step-children will not inherit under the law.
2. To name an executor. If no executor is named in the will, a friend or family member will have to volunteer and apply to the court. If someone has a higher degree of kinship than the prospective executor, they will be expected to sign a waiver of their right to serve as executor (i.e., creating more paperwork for your loved ones or additional attorney’s fees). For example, if your grandson is an attorney and he wants to, and is better suited to, serve as the executor, your daughter would have to fill out a form renouncing her right to serve because she is a higher degree of kinship than your grandson.
3. To waive bond for the executor. This is very important, because we have actually seen this be prohibitive to prospective executors before. In North Carolina, an executor has to pay a bond unless (1) it is waived in a will or (2) the heirs all sign a document waiving the requirement (again, more paperwork for your loved ones). Without a will, if there are minors or incompetent heirs, they cannot consent, and the bond will be required. Without a will, if the prospective executor is not a North Carolina resident, the court will require a bond, regardless of waivers.
A surety bond company will pay the bond to the court, and all the executor has to do is pay a premium out of the estate. However, the executor has to qualify by filling out an application and having a credit check completed. We have seen cases where the executor did not qualify due to their financial situation. We have seen cases where there were minor heirs who could not consent to waive the bond and the executor was out of state. All of this could be avoided by a will.
4. To give the executor powers in the will beyond those granted by law. In North Carolina, if you die without a will, your executor may have to apply to the court for permission to do certain things. For example, the executor may need to sell some of your property to pay estate debts. The petition can be time consuming. It can result in costs almost three times as high as a simple probate. With a will, however, you can stipulate that you are giving your executor the power to do certain acts without getting the court’s permission. Again, this is saving your loved ones a lot of time and their potential inheritance.
5. To name a guardian over minor children, if any. When appointing a guardian for a minor, the court will give preference and priority to the person named as guardian in a will. Unless
you are stricken with a terminal illness, the only way to name a guardian for your children in North Carolina is to do so in a will.
No one ever wants it to happen, but it happens. The mailman asks you to sign for certified mail, or, even worse, a sheriff’s deputy shows up on your doorstep and “serves” you. Once the dust settles you are left with a summons and complaint, which are the documents showing that someone has sued you. Furthermore, because you signed for the documents when the USPS dropped them off, or because the sheriff’s deputy personally handed them to you, the person suing you (the “Plaintiff”) knows that you received them.
What to do next? The answer is not to ignore these papers! The clock is now ticking.
Under the North Carolina Rules of Civil Procedure, you have 30 days to respond to a lawsuit (whether that response is an “answer,” “motion for extension of time to respond”, “motion to dismiss the lawsuit” or otherwise). If you do not respond to the lawsuit in any way within 30 days, then the Plaintiff has the option to pursue a default judgment against you. A default judgment is a court order granting judgment in the Plaintiff’s favor because you failed to respond. It is the same as a regular judgment, just as if you had gone to trial and lost. You now owe the Plaintiff money. By ignoring these legal papers, you have waived your ability to present any valid defenses to the Plaintiff’s case.
The first step in obtaining a default judgment is to obtain an entry of default from the clerk of court. The clerk (or judge) will look at the court’s records and any affidavits provided by the party seeking a default in deciding whether to enter default. The most important effect of the entry of default is that all allegations in the Plaintiff’s complaint are deemed admitted.
The second step is to obtain a default judgment. The party moving for a default judgment must show the court that complaint and summons were properly served on the defaulting party and that personal jurisdiction exists.
In certain instances, a default judgment can be granted by the clerk without the need for a hearing, but in most cases an evidentiary hearing in front a judge will be required before awarding an amount of damages. Further, the court may not award punitive damages by way of a default judgment.
If you mistakenly fail to respond to a lawsuit, there are ways to set aside the entry of default and/or a default judgment, though it is not certainly not guaranteed that you will be successful. To set aside an entry of default, you need to show the court that there is “good cause shown” for you to fail to respond to the complaint. The North Carolina Rules of Civil Procedure also provide a procedure to have a default judgment set aside, but again, you are only able to do so under a limited set of circumstances. Of course, to set aside a default judgment you must show that there was mistake, excusable neglect, fraud, or other extenuating circumstances. If you received a copy of the summons and complaint but simply ignored the lawsuit, the default judgment will not be set aside.
Because there is no guarantee that a court will set aside an entry of default or default judgment, especially if legal papers are intentionally ignored, if you receive a summons and complaint, be it in the mail or personally delivered to you, the best course of action is to contact a
litigation attorney, like Edward Jesson at Jesson & Rains, who can guide you through the process and make sure to avoid any issues with defaults. If you learn that a default judgment has been entered against you or your business, and you believe you have never been served with any legal papers, please contact Jesson & Rains at once.
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