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How To Protect Your Estate in Today’s Legal Climate

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The legal climate is often changing, and it is important to keep up with the latest updates. However, regardless of the changes that are made, one thing remains the same: estate planning is vital. No matter what state you live in, having a will and other estate planning documents in place can help ensure that your loved ones are taken care of after you’re gone.

In North Carolina, for example, there have been a few changes to the law in recent years. The state now has a spousal elective share, which allows spouses to inherit a portion of their deceased spouse’s estate even if they are not named in the will. Additionally, North Carolina has adopted the Uniform Probate Code, which streamlines the probate process and makes it easier for heirs to receive their inheritance.

The Need for Estate Planning

When it comes to estate planning, many people put it off until it’s too late. Oftentimes they think that they’re too young to need it or that they don’t have enough assets to warrant estate planning. The truth is, everyone needs an estate plan regardless of their age or net worth.

One of the biggest reasons for having an estate plan is to avoid probate. Probate is the legal process of distributing a person’s assets after they die. If you don’t have a will or other estate planning documents in place, your assets will go through probate, and even with the Uniform Probate Code mentioned earlier, it could still take months or even years for your loved ones to receive them.

Another of the biggest benefits of estate planning is that it can help reduce or even eliminate estate taxes. Even if you live in a state like North Carolina that has eliminated estate tax, having an estate plan in place can save your loved ones a significant amount of money on federal estate taxes that are still in place.

Types of Estate Planning Tools

There are a variety of estate planning tools that can be used to help ensure your assets are passed on to your loved ones in the way you want. Some of the most common estate planning tools include wills, trusts, and powers of attorney.

A will is a document that outlines how you want your assets distributed after you die. They also name an executor who will be responsible for carrying out your wishes. Wills can be simple or complex and should be tailored to fit your individual needs.

Trusts are another popular estate planning tool. A trust allows you to designate someone to manage your assets after you die. This can be a great option if you want to make sure your assets are distributed in a specific way or if you want to avoid probate.

Another important estate planning tool is the power of attorney. This can be used to appoint someone as your fiduciary and give them the power to act on your behalf if you are unable to do so yourself.

Remember, however, that whichever option you go for, every estate plan needs to be reviewed and updated periodically. A lawyer can help you get the most out of your estate planning documents, whether they’re simple or complex. 

How To Choose an Estate Planning Tool

There are many different types of estate plans. The most common options are wills, trusts, or powers of attorney. Each has its own strengths and weaknesses, so it’s important to choose the right tool for your particular situation.

Wills are the simplest type of estate plan. They are easy to create and relatively inexpensive. However, wills can be challenged in court and may not be effective if the person making the will does not have it properly prepared, planned, and recorded.

Trusts are more complex than wills, but they offer more protection from challenges and can be set up to avoid probate. 

Powers of attorney allow you to designate someone to make decisions for you if you become incapacitated. They are relatively inexpensive and can be tailored to your specific needs. However, they do not provide as much protection as trusts or wills.

So, what can you do? The best way to choose an estate planning type is to speak with an attorney who can help you decide which plan is best for your specific needs. The attorney may even suggest that you go with a combination of estate planning tools to get just what works best.

Contact Our Raleigh Estate Planning Law Firm

In conclusion, it is important to take steps to protect your estate in today’s legal climate. By using a trust or other estate planning tools, you can ensure that your assets are distributed according to your wishes. If you need help creating an estate plan, give our North Carolina estate planning attorneys at Wilson Ratledge a call today to schedule a consultation.

Ask a Lawyer: What You Need To Know About Starting a Business in North Carolina

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Starting a business in North Carolina can be a great way to make money and provide your own unique service or product. However, there are a few things you should know before starting your business. In this article, we will discuss some of the most important things you need to know before starting a business in North Carolina. 

1. Choose a Business Idea and a Business Name

When starting a business in North Carolina, it is important to choose a business name and a business idea. The name should be unique and easy to remember, and the idea should be something that you’re passionate about. It is also important to do your research and make sure that the idea you have is feasible and has the potential to be successful.

2. Decide on a Legal Structure

There are many factors to consider when deciding on a legal structure for a business. Some of the most important factors include the amount of liability the business owner wants to assume, the tax implications, and the ease of dissolution. There are several types of legal structures businesses can choose from in North Carolina, including sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.

3. Register the Business Name and Area of Specialization

When starting a business in North Carolina, the next step is to register the business name with the state. This can be done online or by mail. The next step is to choose an area of specialization for the business. This can be anything from retail to construction to professional services. Once these steps are completed, the business is almost ready to start operating in North Carolina.

4. Pick a Business Location and Check Zoning Regulations

When starting a business in North Carolina, it is also important to check the zoning regulations for the specific location you choose. This will ensure that the business is in compliance with all local ordinances and can operate without any issues. There may be specific requirements for the type of business that can be operated in a particular location, so it is important to do your research ahead of time. If you are unsure of what is required, it is best to contact your local zoning department for more information.

5. Obtain the Proper Permits and Licenses From The State

In order to start a business in North Carolina, one must first obtain the proper permits and licenses from the state. This process can be complex, as different licenses and permits may be required depending on the type of business being started. Some of the most common licenses and permits required include a business license, a sales tax license, and a zoning permit. It is important to confirm what licenses and permits are required for your specific business and to contact the appropriate state agencies for more information.

6. Obtain Insurance

Obtaining insurance when starting a business in North Carolina is important to protect the business from any potential liability. Businesses need a variety of insurance policies, such as general liability insurance, property insurance, and workers’ compensation insurance. By doing so, businesses are not only abiding by the law, but they are also protecting themselves from financial losses in the event of an accident or disaster.

7. Open a Business Bank Account

When starting a business in North Carolina, it is important to open a business bank account. This account will help you track your business finances and keep your personal finances separate. You will need to provide your business name, address, and federal tax ID number to the bank when opening the account.

8. Remember To File and Report Taxes

The North Carolina Department of Revenue and the Internal Revenue Service require all business owners to file and report taxes, regardless of the size or type of business. The departments provide a variety of resources on its website to help business owners understand and comply with the tax requirements. Failure to file and report taxes may result in penalties and interest charges.

Contact Our North Carolina Business Startup Law Firm

When starting and during operations of a business in North Carolina, it is important to work with a lawyer. A lawyer can help you understand the complex legal process involved in starting a business and can provide guidance on corporate law, contract law, and other legal issues that may arise. A lawyer can also help you negotiate and sign contracts, file trademarks, and patents, and protect your business’s intellectual property.

If you have any questions, it is best to consult with a North Carolina business startup lawyer at Wilson Ratledge, PLLC. Our attorneys can help you navigate the process and ensure that your business is set up for success.

Things To Keep In Mind With Business Succession Planning

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The succession planning process is an important step at some point in the development of any business. It can help ensure the continuity of a business and protect its assets. Succession planning should be a part of every business’s plan, regardless of size or industry. Here are some tips to help you develop a successful succession plan.

1. Have a Plan

One of the most important aspects of successful business succession planning is simply creating and having a plan. A plan provides a road map for the transition process, outlining who will take on which roles and responsibilities and when specific tasks need to be accomplished.

Having a plan also helps ensure that all stakeholders are aware of their roles and responsibilities during the transition and that everyone is working towards the same goal. Additionally, a plan can help manage expectations and avoid conflict among stakeholders.

2. Choose the Right Successor

The selection of a successor is important in business succession planning because the wrong decision can have disastrous consequences for the company. The successor needs to be someone who is capable of taking over the company and continuing its operations.

They also need to be someone who is compatible with the company’s culture and values. If the successor is not a good fit, it can lead to tension within the company and decreased productivity.

3. Train Your Successor

The purpose of training your successor is twofold. First, it ensures that the transition of power is as smooth as possible, minimizing any disruption to the business. Second, it allows the successor to learn and understand the business inside and out, so that they can continue to operate it effectively after you retire or die. This is especially important in family businesses, where the successor may not have previous experience working in a business setting.

4. Get Professional Help

There are a few reasons why getting professional help is important in business succession planning. One reason is that it can be difficult to know how to start the process or what to do next. A professional can help you navigate these waters and ensure that everything is done correctly. Additionally, a professional can help you develop a plan that takes into account all of the relevant factors, such as tax implications and stakeholder preferences.

5. Create a Possible Timeline

Creating a possible timeline for the succession planning process is important because it allows for a smooth and organized transfer of power from the current owner or CEO to the designated successor.

By mapping out the steps that will need to be taken and the timeframe in which they will need to be completed, both the current owner/CEO and the potential successor can have a clear picture of what needs to happen and when. This can help to minimize confusion and disruption during what can be a potentially tumultuous time.

6. Document Your Plan

Documenting your plan and reviewing with your leadership team is important in business succession planning because it provides a road map for transferring ownership and operations of the business to the next generation of leaders. Without a documented plan, it can be difficult to ensure a smooth transition of ownership and operations. A documented plan can also help to ensure that the business is able to continue operating in the event that something happens to the current owner or leaders.

7. Review and Update Your Plan Periodically

The process of reviewing and updating your plan on a consistent basis is important in order to ensure that your succession plan remains effective. By periodically revisiting your plan, you can identify any changes that may have occurred in your business or personal life that could impact your succession plan. You can also make any necessary adjustments to ensure that your plan still meets your needs.

8. Don’t Forget To Update Your Estate Plan As Well

One’s estate plan should include a succession plan, which details who will take over management of the individual’s assets and affairs, as well as business, in the event of incapacity or death. The two documents should be coordinated to ensure that the desired outcome is achieved. For example, if one wishes to leave specific assets, or business(es) to some individual(s), those individuals need to be named in both the estate plan and the succession plan.

Contact Our Raleigh Business Succession Law Firm

Most importantly, in business succession planning, it is important to work with a skilled attorney because they can help ensure that the process is smooth and that all of the necessary steps are taken in order to transfer ownership of the business to the desired party. An attorney can also help create a will or trust to help direct the succession process. Without an attorney, it can be difficult to ensure that everything is done correctly and that the transition goes as smoothly as possible.

If you are in need of assistance with succession planning, contact our North Carolina succession planning attorneys at Wilson Ratledge today to schedule a consultation and help reduce the stress and uncertainty of creating a business succession plan.

Frances M. Clement to Speak at 2022 NCPRIMA

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The 2022 North Carolina Public Risk Management Association’s Annual Educational Conference will be held in Wrightsville Beach, September 11, 2022 through September 14, 2022.  Attorney Frances M. Clement, along with Henry Smith of Fayetteville Public Works Commission, will speak before other professionals on “Drugs, Lies & Dollar Bills:  A Breakdown of the Intoxication Defense, Misrepresentation Defense, and Penalties for Safety Violations”.

Navigating the Challenges That Are Often Associated With Estate Taxes

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The estate tax in North Carolina is a levy on the assets of a deceased person. In most cases, the tax applies to the balance of an individual’s estate after outstanding debts and final expenses are paid. The estate tax can be a major financial burden for heirs, who may need to sell assets or take out loans to pay the tax bill. In many cases, family members must delay distributions from an estate in order to cover the cost of the tax. 

In many cases, the tax is unavoidable and can lead to difficult decisions about how to dispose of a loved one’s estate. Here are some tips on navigating the challenges that are often associated with estate taxes in North Carolina.

How Much Are Estate Taxes?

In North Carolina, the estate tax was eliminated in 2013. So, you do not owe any estate taxes to the state. You do, however, need to pay some taxes to the federal government if the estate is valued at over $12.06 million. While this value is often adjusted for inflation every year, the federal estate tax exemption is $12.06 million in 2022. The tax rate is about 40%. 

However, there are some exemptions from the federal estate tax, for example, if the estate was given as a gift during the estate owner’s lifetime or if the estate was placed under the care of a trust. These are aspects of estate planning that might need to be discussed with an estate planning attorney. The attorney can help you to develop a strategy that best suits your needs.

Reducing Liability for Estate Taxes

As we just mentioned above, individuals looking to reduce their liability for estate taxes may want to consider creating a trust. A trust can be used to hold property. This will not only reduce the taxable estate, but the trust will also help to manage the property and any income it generates in a tax-efficient manner. Trusts can also help protect assets from legal judgments and creditors. In addition, trusts can be used to provide for beneficiaries in the event of the settlor’s death.

Gifting property is also another way that can help reduce the amount of federal estate tax owed on a person’s estate after they die. The IRS allows individuals to give away some amount without having to pay any gift taxes. This amount is known as the “exclusion amount.” Gifts that exceed the exclusion amount are subject to a gift tax at a rate of up to 40%.

However, there are ways to give away more than the exclusion amount without having to pay the gift tax. One way is through a technique known as “gift splitting.” This allows spouses to split their combined gift exclusion amount between them. This means that each spouse can give away up to a bigger gift without having to pay any gift taxes.

Reviewing Beneficiary Designations

A beneficiary designation is a legal document that states who will receive your property after you die. It is important to review your beneficiary designations regularly to ensure that they reflect your current wishes. For example, if you have named someone as a beneficiary who is no longer alive, or if the property you want to leave to them has been sold, you will need to update your designation. Otherwise, your wishes may not be carried out after your death.

Planning Ahead To Minimize Estate Tax Liability

Estate taxes can be a significant burden on heirs, particularly if the estate is large. However, as you have seen, there are a number of action steps that can be taken to minimize or avoid estate tax liability. However, just knowing what to do is not enough, you need to take action.

One of the most important things you can do is to plan ahead. Start by reviewing your assets and liabilities and estimating the value of your estate. If you have a spouse or children, consider how they will be affected financially if something happens to you. 

Next, you take steps to make provisions for transferring ownership of assets to your loved ones during your lifetime or consider setting up a trust as a way to reduce your taxable estate. 

Minimizing estate tax liability is a complex subject, and it’s important to have an experienced team to help. Wilson Ratledge has helped numerous families create a plan that will minimize your estate tax liability and ensure that your loved ones are taken care of after you’re gone. Contact us today to schedule a consultation!

Common Structures For Business Exits In North Carolina

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When a business owner in North Carolina is ready to retire, sell, or wind down their business, they will need to choose the appropriate structure for the exit. There are a few common structures used for business exits in North Carolina. We will discuss them in this article. 

Each option has its own set of benefits and drawbacks, so it’s important to understand them all before making a decision. In any case, if you’re considering an exit strategy, it’s important to work with an experienced Raleigh business lawyer to set up the option you believe is best for you and your company and get you started.

Types of Business Exits in North Carolina

There are a number of different structures for business exits in North Carolina. They are listed and briefly discussed below.

1. Sale of the Company

The sale of a company as a business exit strategy is the process by which a company sells all or part of its operations and assets to another company. This means that they will find a buyer who is interested in purchasing the company’s assets and operations as a whole or in part. This can be a good option for the owners, as it can allow them to receive some money for their business and avoid having to close it down completely.

In most cases, the company will hire an attorney and a banker to help them find a buyer and negotiate the sale.

2. Management Buyout

A management buyout (MBO) is a type of business exit strategy in which the current managers of a company purchase the company from its previous owner(s). This can be done with or without the help of outside investors. 

MBOs are often used when the previous owner(s) wants to retire, when there needs to be a change in ownership, or when the company is facing financial difficulty.

3. Employee Stock Ownership Plans (ESOPs); Earnouts Based on Performance

ESOPs are employee-owned businesses in which employees are given company stock in order to give them a financial stake in the company. This can help to incentivize employees and make them feel more invested in the company’s success. An earnout is a payment made to an employee based on their individual performance. 

It can also be used as a business exit strategy, allowing the owner to compensate the most hardworking staff for handling company affairs when they are gone.

4. Going Public

When a company decides to go public, it is selling ownership stakes in the form of shares of stock to the investing public. This process allows a company to raise money by giving potential investors the chance to buy a piece of the company. The company will also be listed on a stock exchange, which will provide liquidity (the ability to sell shares when needed) and transparency (the ability to track the stock price and performance). 

In some cases, the company’s head will decide not to hold on to any shares of the company, and may thus make their exit in this way. In other cases, they may hold on to very few shares, which gives them very little control over any of the company’s activities.

5. Private Equity Buyouts

A private equity buyout is the acquisition of a company by a private equity firm. Private equity firms are firms that invest in companies that are not publicly traded on a stock exchange.

Private equity buyouts as a business exit strategy can involve a number of different steps in order to be successful. The first step is finding a private equity firm that is interested in buying the company. Once a private equity firm is found, the company will need to provide detailed financial information so that the private equity firm can perform due diligence on the company. If the private equity firm is interested in the company, they will make an offer to buy it.

7. Mergers & Acquisitions

A business founder can acquire an opportunity to exit from the business through mergers and acquisitions. The business can be acquired by another company that is interested in expanding its market share or that is looking for new products or services to offer its customers. 

The acquisition can also provide the previous business owner with the opportunity to receive financial compensation for its ownership stake in the company. This compensation can come in the form of cash, stock, or other assets.

8. Dissolution

The dissolution of a business can be used as an exit strategy for the owners or shareholders of the company. This process involves the legal termination of the business and the sale or distribution of its assets. 

The goal of this strategy is to provide a way for the owners to liquidate their interests in the company and receive cash or other assets in return. Dissolution is often used to terminate a business that is no longer viable or has run into financial troubles but may also be used simply as a business exit strategy.

Our Raleigh Business Law Firm Can Help

If you’re ready to take the next step in your life and are considering exiting your business, there’s a lot to consider. The experienced team at Wilson Ratledge has helped many business owners just like you find the best option to maximize the time and financial investments you’ve put in your company over the years. Contact us today to schedule a consultation and explore your options.