 By Danielle Nodar
Yes! When helping clients formulate an estate plan, we oftentimes have questions on whether there are any alternatives to passing property to loved ones without having to go through the court-regulated formal probate process. Depending on the types of assets and beneficiaries, formal probate administration is not always necessary. For example, formal probate administration is not always required at the death of the first spouse. Real property owned by spouses as tenants by entirety passes without regard to creditor claims, and the surviving spouse allowance allows a surviving spouse to obtain up to $30,000 in personal property of the decedent spouse free and clear of creditor claims. There are also forms of informal probate, such as summary administration and administration by affidavit, which apply to certain kinds of estates and are described in more detail below. Summary administration is available for surviving spouses. This procedure is available only if the surviving spouse is the sole heir (intestate, meaning that the decedent died without a will) or the sole devisee (testate, meaning the decedent died with a will) of the decedent. An order of summary administration will permit the spouse to proceed with the collection and distribution of the decedent’s property without the formality of regular administration. By obtaining the order, the surviving spouse assumes all liabilities of the decedent to the extent of the value of the property received. Another option for small(er) estates is to have a “collector” appointed instead of a personal representative. A collector may file a small estate affidavit to administer the estate of a decedent with a small(er) estate. This procedure is available for decedents whose personal property, less liens and encumbrances thereon, and less the spousal allowance, is valued at $20,000 or less. If the surviving spouse is the collector, and they are the sole heir or devisee of the decedent, the value of the personal property less liens and encumbrances and the spousal allowance can be valued at $30,000 or less. Unfortunately, these informal probate procedures are unavailable if singularly-owned real estate is part of the decedent’s estate and heirs intend to sell the property within two years of the decedent’s death. Full probate administration is necessary to pass clear title because an executor must be appointed to publish notice to creditors. If the real estate is sold within those two years and notice to creditors has not been published, the sale will be void as to creditors. N.C.G.S. § 28A-17-12. If the real estate is sold after two years and notice has not been published, the estate still owes the debts to creditors (if the applicable statute of limitations has not expired), but the creditors cannot pull the real estate back into the estate to sell to satisfy their debt. Another way probate may be avoided is if assets are titled joint with rights of survivorship. For example, if you and a loved one hold a bank account as joint with rights of survivorship, you both own 100% of the account’s assets jointly during your lifetimes. When one of the joint owners passes away, the surviving owner will own 100% of the account individually. Finally, one of the most important means of estate planning outside of the probate process is the use of beneficiary designations and transfer on death designations for certain banking or brokerage accounts, securities, life insurance, retirements accounts, and 401(k)s. As you can imagine, the bulk of many people’s assets are contained in these accounts. These assets will pass to who you have listed as your beneficiary outside of probate, regardless of what your will says. This means that the money will get to your beneficiaries quickly and that it will not be accessible to any of your creditors at the time of your death. Thus, it is critical to make sure that all of your beneficiary designations are up to date for primary and contingent beneficiaries. We have seen people fail to update these after death or divorce, causing the money to go into the probate estate, which will cause a delay in distribution to your loved ones and will open those funds up to creditors. If you need assistance with any of the above planning, please give Jesson & Rains a call.
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 Kelly will be co-hosting a complimentary estate and retirement planning seminar with Joe Roseman, Jr. Managing Partner, who will be talking about retirement, at the Morrison Regional Library.
Sign up today! *Determine if a TRUST is right for YOU *Avoid the most common mistakes retirees make with their estate plan *Reduce future costs and taxes for your FAMILY *Understand how to avoid letting the NURSING HOME take your house *Discover powerful retirement and estate strategies you never knew existed RSVP using this link: https://workshops.retireversity.org/jr-ep-2018-11-8 #estateplanning  A trademark is a “word, phrase, symbol and/or design” that identifies and distinguishes the goods or services of the owner of the mark from another party. Examples include brand names, slogans, tag lines, logos, and design elements (think, Tiffany blue boxes). In order to get a federal, registered trademark, the mark has to be used in commerce, so normally the owner of the mark is a business or business owner. Someone can apply for a trademark before the mark is used in commerce if the owner intends to use it in commerce, but the United States Patent and Trademark Office (“USPTO”) will not register the trademark until the applicant shows that it is actually being used. Trademarks don’t expire, as long as the mark continues to be used in commerce and the owner files periodic documentation with the USPTO.
The trademark application process is fairly simple, but actually obtaining the trademark can be quite tricky. Not only does the applicant have to worry about the application being denied because the mark is too similar to another in a similar industry (“likelihood of confusion” according to the USPTO), but the applicant has to worry that the USPTO will deny the application for other grounds such as the trademark being “merely descriptive.” For example, the name “Northeast Interiors” merely describes the business (interior design in the Northeast). The strongest trademarks are “fanciful and arbitrary,” meaning they are words that have no relation to the good or service sold (like Apple computers), and the second strongest trademarks are “suggestive” meaning they suggest the good or service without literally describing it (think, Facebook). Unfortunately, most people name their businesses something that describes them for marketing purposes! Is marketing more important or trademarking? This depends on the nature of your business. A business can also have a common law trademark, but there are benefits to federally registering: first, inclusion in the national database deters others from using similar marks in similar industries; second, there is a legal presumption that the registrant owns the mark and was the first to use it, meaning that in a dispute with another, they would be presumed to be the winner. A common law trademark is established simply by a business starting to use the mark in commerce. The mark should be identified with the ™ symbol. Only a federally registered trademark can use the ®. A common law trademark is limited in geographic area, so you could have a competitor business open up with the same name in an entirely different state, as long as you didn’t share customers. If a competitor opens in your geographic area, you could sue them for trademark infringement if they did damage to your mark. You would have to prove you were the first to use the mark (unlike having a presumption in federal court). If you’re thinking of trademarking something in your business, give Jesson & Rains a call!  October is National Women’s Small Business Month. In addition, this year marks the 30th anniversary of H.R. 5050! H.R. 5050 was the first piece of legislation that was put into place to recognize and assist women business owners. It had four main components:
Our very own Jesson & Rains partner, Kelly Rains Jesson, is a member of the National Association of Women Business Owners (NAWBO). Founded in 1975, NAWBO is “the unified voice of over 10 million women-owned businesses in the United States representing the fastest growing segment of the economy.” NAWBO propels women entrepreneurs into economic, social and political spheres of power worldwide.  Kelly will be co-hosting a complimentary estate and retirement planning seminar with Joe Roseman, who will be talking about retirement, at the University City Library.
Sign up today! *Determine if a TRUST is right for YOU *Avoid the most common mistakes retirees make with their estate plan *Reduce future costs and taxes for your FAMILY *Understand how to avoid letting the NURSING HOME take your house *Discover powerful retirement and estate strategies you never knew existed RSVP using this link: workshops.retireversity.org/jr-ep-2018-10-9  I am not an insurance salesperson. However, I often give my estate planning clients one common piece of advice – get life insurance if you can. This is typically easier for my younger clients, but for my older clients, the importance of having life insurance is greater.
Here’s the reason for my advice: First, life insurance passes outside of the probate estate (for a refresher on what is included in your “probate estate,” see this blog post). This means that your loved one will receive a check without an estate being opened or finalized. Often, my probate clients who have lost loved ones have already received their life insurance check before they ever even come into my office to see me to probate a will or settle an estate. This can result in a tremendous burden being lifted. While your loved one is still obviously grieving the loss, your loved one does not have to be concerned with paying funeral expenses, medical bills, or even a mortgage payment, for example. This is especially true if you do not have joint bank accounts. If an estate has to be opened and settled for your loved one to receive their inheritance, they will not get that money for at least six months (and sometimes even one year). Also, spouses are required by law to pay the funeral expenses and medical expenses of the deceased spouse. These bills can sometimes wipe out savings. Additionally, if you pass away with debt, some savings accounts and other assets are included in your probate estate. Your loved one may not inherit anything if your estate assets are needed to pay your final debts. Many people opt to forego life insurance in exchange for passing on retirement accounts like 401Ks and IRAs. While this is certainly an option, your loved one may not have near instant access to pay your final expenses. Depending on whether your surviving spouse is your heir or your children (or someone else), there may be restrictions on the use of the funds. Importantly, and the second reason why I recommend life insurance, is that life insurance is passed on tax free while your beneficiary will be responsible for paying taxes on withdrawals taken from retirement accounts. Furthermore, if you are a business owner, and especially if you are in business with a spouse, life insurance can ensure the survival of your business. Finally, I have started recommending life insurance policies that contain long-term care riders. If there is ever a need for you to enter a long-term care facility, you can use those funds for that. I have a couple of clients who are in moderate-to-nice assisted living facilities who have told me that they would not be able to live there had they not purchased long-term care insurance years ago. People are living longer, and medical care is getting more expensive. The purpose for purchasing these products is not necessarily to pass on a large inheritance to your loved one. In my opinion, these products alleviate stress and potential burden on your family members (whether that means at death or in the event you can no longer care for yourself). Do not hesitate to contact me if you would like to be referred to an insurance professional to find out more information. I am not being paid to promote life insurance, but I feel strongly about these products, and I believe that it is an important part of the estate planning process. |
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