By Attorney Edward Jesson
Recently, the North Carolina legislature passed House Bill 488, key sections of which will go into effect on October 1, 2023. While most of the changes made to this law relate to the energy efficiency rules found in the North Carolina Building Code, there is one big change for people in the construction industry. North Carolina General Statute 87-1(a) governs who is required to obtain a North Carolina general contractor’s license prior to performing or bidding on work. The general rule was that any person or business that bid on or performed work which was valued at more than $30,000.00 was required to have a general contractor’s license prior to bidding on or performing that work (with a few exceptions). However, House Bill 488 amends the language of N.C.G.S. § 87-1 to state the following: [A]ny person or firm or corporation who for a fixed price, commission, fee, or wage, undertakes to bid upon or to construct or who undertakes to superintend or manage, on his own behalf or for any person, firm, or corporation that is not licensed as a general contractor pursuant to this Article, the construction of any building, highway, public utilities, grading or any improvement or structure where the cost of the undertaking is forty thousand dollars ($40,000) or more, or undertakes to erect a North Carolina labeled manufactured modular building meeting the North Carolina State Building Code, shall be deemed to be a "general contractor" engaged in the business of general contracting in the State of North Carolina. The extra $10,000.00 will allow many people who are not licensed with the state to bid on projects that they would have not been legally permitted to bid on before this amendment. It is important to note that the new law only applies to projects or contracts that are entered into after October 1, 2023—the new law does not apply retroactively. It is also important to note that whether you need a license to perform a certain item of work has no bearing on whether that work needs to be permitted or inspected by the relevant County. This change in the law does not mean that work which would require a building permit no longer requires that permit. This is a big change in the law that will likely have an effect on the building industry in North Carolina as a whole—especially on those projects ranging from $30,000 to $40,000 where there will probably be much more competition. If you need assistance with licensure, or other legal issues in the construction industry, don’t hesitate to reach out to the attorneys at Jesson & Rains.
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By Associate Attorney Katy Currie
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 Zach Markle, Law Student Intern
A contractor in North Carolina is smart to triple check their state government contract bids because inaccurate bids sometimes cannot be undone. North Carolina divides mistakes in bids into two classes: “judgment error” mistakes and “clerical error” mistakes. A “judgment error” mistake may not be undone once the bid is submitted. If a contract submits a bid and makes a mistake in judgment, like misjudging the amount of materials or the length of time needed for a project, he may be stuck with the bid as presented if the contract for the work is accepted. And if that is the case, any shortage in revenue to cover excess costs may have to be paid out of pocket. Further, if the contractor refuses to accept the project, he may forfeit their bid deposit or bid bond and potentially be subject to other penalties. If a mistake in the bid is a “clerical error,” the consequences are not as severe. North Carolina describes “clerical errors” as “unintentional arithmetic error or unintentional omission” that is related to, among other things, the work, labor, and materials included in the bid. This usually arises when a button is accidentally pressed on a calculator during the input of costs into a spreadsheet or bid software, but it can arise in other ways as well. If the mistake is found to be a “clerical error” and the bid was submitted in good faith, and the contractor can prove it during a hearing with the right evidence, the agency in charge of the project may allow the contractor to withdraw their bid from consideration without having to forfeit their deposit or bond. In order for a contractor to withdraw their bid, they must submit a request to withdraw in writing within 72 hours after the opening of bids, unless a longer period is specified in the instructions to bidders. They must then attend a hearing by the agency responsible for the project where they will be heard on whether or not they can prove that their bid is eligible for withdrawal. To make sure you do not spend needed resources or have to deal with added stress to an already stressful process, triple check those bids before submitting them! Should you have any questions about the process or need additional help, please don’t hesitate to call Jesson & Rains today. By Associate Attorney Danielle Nodar
If you live in North Carolina and are married, one of the benefits available to you is a type of property ownership known as Tenancy by the Entirety (TBE). TBE is a type of real estate ownership where the marital unit, not the individual spouses, own the property. This means that one party to the marriage cannot sell or borrow against the property without the consent of the other party. The main benefit of TBE ownership is asset protection, as the creditors of one spouse cannot attach a lien or judgment against the TBE property. For example, if a spouse has a $10,000 judgment against him or her, the creditor will be unable to attach a judgment lien against the TBE property. This is a great way for protecting real estate from a creditor, particularly if one spouse is involved in a business or occupation where there may be a higher risk of being sued. The only exception is that federal tax liens against one spouse will attach to that spouse’s interest in the TBE property. TBE ownership can also be an important estate planning tool as it includes survivorship rights. If one spouse passes away, the title of the TBE property automatically passes to the surviving spouse without going through probate. Also, as ownership of the property is automatic for the surviving spouse, one spouse cannot convey TBE property in their individual will or trust to a non-spouse. It is important to remember that a couple must be married at the time they acquire the real estate to get TBE protection. For example, if a couple owns a house together before marriage and then gets married, the property will not automatically become TBE property. As strange as this sounds, to gain the benefits of TBE ownership, the couple would need to sign a new deed transferring the property from themselves individually to themselves as a now-married couple. As TBE provides that the marital unit owns the property, it can be terminated under certain circumstances that impact the marriage, such as divorce or death of a spouse. If a divorced spouse or the surviving spouse has a judgment against them, it will then attach to their interest in the property. If you have any questions about how TBE can be used in estate planning or asset protection, please call Jesson & Rains! By Associate Attorney Katy Currie
An assumed business name, also referred to as a fictitious name or “doing business as” (“DBA”), is when a business operates under a different name than the name registered with the North Carolina Secretary of State’s Office (for example, Jesson & Rains, PLLC, doing business as Jesson Law Group). Think of an assumed business name as a “nickname” for your business. Keep in mind, an assumed business name is just a “nickname” for your business and not a separate business itself. North Carolina law allows businesses to operate under assumed business names if it appropriately files an assumed business name certificate with the local register of deeds office. The certification puts the world on notice that the business is being operated under a different name. The assumed business name certificate only needs to be filed in one of the counties in which the business will engage in business, as long as you indicate that you plan to do business in all 100 counties on the certificate. Why operate under an assumed business name? Some businesses may want to create a catchier, shortened version of its business name for marketing or branding purposes, or maybe it simply wants a new business name. Sometimes businesses decide to start a separate “branch” of the business without forming a completely new business. For example, if you are a photographer, and you decide to do videography, you may file for an assumed name for the videography business instead of forming a second business that then has to file a separate tax return, get a second EIN number, and separate bank accounts. However, you should not go this route if separation of the two businesses is good from a liability protection standpoint. A creditor of the videography business is a creditor of the photography business, and vice versa. The only way to avoid that is to form two separate businesses. Businesses need to be careful when using assumed business names to not infringe on any trademarks. A business should conduct a name and trademark search before filing the assumed name certification. For assistance or for more information regarding assumed business names, or about your business in general, please don’t hesitate to reach out to Jesson & Rains! 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. |
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