 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.
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 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!  By Meg Abney, Jesson & Rains PLLC Intern
If you are a professional, like a therapist, CPA, or attorney, you know exactly how your business should be run. But what happens when incapacity or death intervenes? Who will pick up where you left off? A “Professional Will” can help provide guidance and critical instruction for what comes next. While not a true legal document, like a Last Will and Testament, a “Professional Will” is essentially a roadmap explaining how to terminate or continue operations at your business or practice. Unlike your Last Will and Testament, which concerns distribution of assets, a Professional Will names a trusted individual or emergency response team to handle business affairs like:
Depending on your profession, you may be obligated to provide some form of advance planning for your business or practice. In North Carolina, psychologists, LPCs, NCCs, and LMFTs are required to make advance plans for the transfer of clients and to protect the confidentiality of records and data. A Professional Will satisfies this ethical responsibility. Even if not specifically required in your industry, all professional business owners can benefit from a Professional Will. Professionals often have an obligation to protect the interests of their clients, and a Professional Will can help avoid a breach of duty. Individuals whose clients rely on continued care or service should strongly consider a Professional Will to help prevent disruptions. Ideally, you should create your Professional Will alongside your personal will since your Last Will and Testament supersedes all other testamentary documents. Therefore, it is best to work with an experienced attorney to ensure that there are no discrepancies between these two documents. Please call Jesson & Rains PLLC if you have questions about whether your business could benefit from a Professional Will or want to learn more about protecting your business’s future.  By Attorney Kelly Jesson
One of the main reasons why business owners formalize their businesses by forming an LLC or a corporation is so that their personal assets and liabilities can be separated from their business assets and liabilities. If the business is sued, the owner’s personal assets will be protected, and vice versa. However, in certain circumstances, a court may disregard the corporate entity and hold its owners personally liable for business debts if the corporate entity, at the time, had no separate mind, will, or existence of its own. In making this determination, a court will consider, among other factors, whether a business has complied with “corporate formalities.” Corporate formalities include issuing and following bylaws, issuing shares, electing a board of directors, holding annual meetings of the board and shareholders, sending proper notice of these meetings, and keeping minutes and other corporate records. Owners should not intermingle business and personal assets or employees. Owners should not deal with third parties in such a way that the third party does not know they are doing business with an LLC or a corporation. Some closely-held corporations may enter into a shareholder agreement in lieu of some of the above requirements. With an LLC, some of these corporate formalities do not have to be observed, since LLCs are subject to fewer formal statutory requirements than are corporations. If the owner of a business complies with corporate formalities and consistently lists the business’s name on contracts and other documents, third parties will be considered to have voluntarily dealt with the business, and a court will be less inclined to hold the individual owner personally liable for the business’s debts. However, if corporate formalities are being ignored, even inadvertently, that could lead to a court ignoring the existence of the LLC or corporation, which may result in the business owner’s personal assets being at risk. If you or someone you know needs assistance bringing a business in line with its required formalities, 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. We work with our clients to reduce the likelihood that they will ever be responsible for business liabilities.  By Associate Attorney Danielle Nodar
Do you have a child getting ready to start college or already away at school? While going through the college essentials checklist, make sure to consider what your child may need in the event of an emergency, including legal powers of attorney allowing you to make healthcare, financial, or legal decisions for them in event of an emergency. Once a child turns eighteen, the child is considered an adult in the eyes of the law. This means that parents are no longer given access to their child’s financial, health, and educational records without the consent of their adult child. For this reason, it is essential for parents and young adults to discuss the importance of healthcare powers of attorney and durable powers of attorney before a child heads off to college. A healthcare power of attorney allows a person to name an agent to make healthcare decisions on their behalf in the event that the person is unable to communicate their wishes to their medical providers. This document contains authorizations allowing the health care agent to access private health information while they are acting as 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 properly executed healthcare power of attorney can avoid this situation and allow parents to easily step in and access medical information during an emergency. This document 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). The power of attorney can be used to allow parents to help pay a child’s bills, access the young adult’s personal bank account or education records, or manage the child’s finances or legal decisions in the event of an emergency. Without a durable power of attorney, you would not be able to manage your child’s financial and legal affairs during an emergency without petitioning a court to be appointed the child’s legal guardian. If a child is going to college outside of North Carolina and does not have these legal documents in place, 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. 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 documents 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. During this exciting time where a young adult is gaining more independence, they may be reluctant to give their parents decision-making power over health or finances. However, 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 assist in the event of an emergency. Finally, now that your child has turned eighteen and is getting ready to enter adulthood, it may be a good time for you to review your estate plan to make sure that it still meets all of your needs and 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. |
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