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Daniel C. Pope’s Collaboration to Aid Ukrainian Refugees

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We are proud to announce that Dan was featured in the recent North Carolina State Bar Spring 2023 Journal!  Dan Pope’s connection to Ukraine and Ukrainian culture is deeply important to him and to his family. Uniting for Ukraine (“U for U”) provides a pathway for Ukrainian citizens and their immediate family members who are outside the United States to come to the US and stay temporarily in a two-year period of parole.  Find out how Dan and attorney Benjamin A. Snyder, chair of the Immigration Subcommittee of the North Carolina State Bar’s Board of Legal Specialization, joined forces to help a family arrive in the United States by reading the full publication here.

We give sincere thanks to all, including Dan and Ben, who have supported the humanitarian aid for Ukraine.  To find out more about the United for Ukraine project, visit DHS, USCIS or United for Ukraine.

How Do You Set Up a Spendthrift Trust in North Carolina?

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A spendthrift trust is created by an individual (the settlor) for the benefit of another individual (the beneficiary). It is commonly used to protect the assets for the benefit of an individual who may not be financially savvy or who may be at risk of incurring significant debts. 

The North Carolina estate planning attorneys at Wilson Ratledge explain the main reasons why people consider setting up a spendthrift trust which are as follows:

  1. Protection of Assets from Creditors

One of the primary advantages of a spendthrift trust is that it provides protection for the trust’s assets from the beneficiary’s creditors. This means that the assets of the trust are not subject to seizure by the beneficiary’s creditors to satisfy outstanding debts. This can be an important consideration for individuals at risk of incurring significant debts, such as those with a history of financial irresponsibility or those at risk of legal liability.

  1. Professional Asset Management

Another advantage of a spendthrift trust is that it allows for professional asset management. The trustee, who is typically a financial institution or an individual with expertise in financial management, is responsible for managing the assets of the trust in a way that is consistent with the terms of the trust agreement. Even with smaller trusts for which an institutional trustee may not be cost effective, the trustee can engage the services of a financial advisor for this purpose.  This can provide peace of mind for the settlor, knowing that the trust assets are being managed by a professional acting in the beneficiary’s best interests.

  1. Flexibility

Spendthrift trusts can also be tailored to meet the specific needs and goals of the settlor and beneficiary. The terms of the trust agreement can specify how the assets of the trust are to be used, such as to provide for the basic needs of the beneficiary or to support a particular hobby or interest. This flexibility allows the settlor to customize the trust to meet their specific goals and objectives.

  1. Avoidance of Probate

In North Carolina, assets held in a trust are not subject to the probate process. This means that upon the settlor’s death, the assets of the trust will continue to held for the benefit of the beneficiary, and if appropriate at some later time, transferred to the beneficiary without the need for court involvement. This can be a significant advantage for individuals who wish to avoid the time and expense of probate.

Setting Up a Spendthrift Trust in North Carolina

Step 1: Choose a Trustee

The first step in setting up a spendthrift trust in North Carolina is to choose a trustee. The trustee can be an individual or a financial institution. The settlor should choose a trustee that they trust to manage the assets of the trust and make decisions in the best interests of the beneficiary.

Step 2: Determine the Purpose of the Trust

The settlor should also determine the purpose of the trust. This can include providing for the beneficiary’s basic needs, such as food, shelter, and medical care, or it can be more specific, such as providing for education or supporting a particular hobby or interest.

Step 3: Gather the Necessary Documentation

To set up a spendthrift trust in North Carolina, the settlor will need to work with an attorney to create the following documentation:

a. A written trust agreement: This document outlines the terms of the trust, including the purpose of the trust, the powers and duties of the trustee, and the rights of the beneficiary.

b. A list of the assets to be placed in the trust: This can include cash, stocks, real estate, or other assets.

c. A certificate of trust: This is a summary of the trust agreement that can be used to provide evidence of the existence of the trust to third parties.

Step 4: Fund the Trust

Once the trust agreement and other necessary documentation have been gathered, the settlor will need to transfer the assets to be placed in the trust to the trustee. This is known as “funding” the trust. The assets should be transferred to the trustee in a manner that is consistent with the terms of the trust agreement.

Step 5: Review and Update the Trust

After the trust has been set up and funded, it is essential to periodically review and update the trust to ensure that it continues to meet the needs of the settlor and the beneficiary. This may involve making changes to the trust agreement, adding or removing assets from the trust, or appointing a new trustee. 

Wilson Ratledge, PLLC

Working with an estate planning lawyer in North Carolina is advisable if you need to set up a spendthrift trust in the Tarheel State. We can also help you review and update the trust as per your wishes to ensure that it remains effective and in compliance with all your future aspirations.

Business Succession Planning in North Carolina

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Business succession planning is essential to any business for a number of reasons. These include:

  1. Ensuring a smooth transition of ownership and management.
  2. Maintaining continuity of operations in the event of the death or incapacity of a current owner or key executive leader.
  3. Identifying and preparing potential candidates for key leadership roles.
  4. Providing legal and financial protections for the business and its stakeholders.
  5. Contributing to the overall success and growth of the business.
  6. Ensuring compliance with relevant laws and regulations.
  7. Maintaining peace in the family.

In North Carolina, businesses must adhere to various legal considerations and requirements when engaging in succession planning. 

In this article, the North Carolina business succession planning attorneys at Wilson Ratledge will outline basic succession planning options and some of the key legal considerations.

Legal Considerations for Succession Planning in North Carolina

There are several legal considerations that businesses in North Carolina must take into account when engaging in succession planning. These include:

a. Business Structure: The type of business structure, such as a sole proprietorship, partnership, or corporation, will determine the legal requirements and procedures for succession planning. For example, partnerships may require the execution of a partnership agreement outlining the terms of succession. At the same time, corporations may need to follow specific procedures outlined in the articles of incorporation and bylaws. S corporations in particular must adhere to IRS rules regarding eligible S corporation shareholders.

b. Transfer of Ownership: The transfer of ownership in a business is subject to various legal considerations, such as the execution of a buy-sell agreement and estate planning documents (wills and trusts) to implement the terms of a buy-sell agreement, orderly transfer of business interests, and planning for minimizing, while having liquidity for, the payment of any applicable taxes. It is important for businesses to seek the guidance of an attorney when engaging in the transfer of ownership to ensure compliance with relevant laws and regulations.

c. Management Succession: The process of transferring management responsibilities in a business can also be subject to legal considerations, such as the use of key-man (or key-person) life insurance, executive compensation, the joinder in a limited liability company operating agreement or partnership or limited partnership agreement. It is crucial for businesses to consult with an attorney to ensure that the management succession process is carried out as smoothly as possible and in accordance with the law.

North Carolina and Federal Laws Governing Succession Planning

There are several North Carolina and Federal statutes, many with related regulations, that businesses and business owners must consider when engaging in succession planning and implementing a succession plan; however, none of these spell out any automatic process in the absence of planning. These include (among others):

a. North Carolina Business Corporation Act

b. North Carolina Limited Liability Company Act

c. North Carolina Revised Uniform Partnership Act

d. North Carolina General, Limited, and Limited Liability Partnerships 

e. North Carolina (wills and estates 28A-31?)

f.  North Carolina Uniform Trust Code

g. Subchapter C of the Internal Revenue Code (Federal Taxation of C Corporations)

h. Subchapter S of the IRC (Federal Taxation of S Corporations)

i.  Subchapter K of the IRC (Federal Taxation of Partnerships)

j. Federal Taxation of Trusts

k. Federal Estate and Gift and Generation Skipping Tax

Tips for Successful Succession Planning in North Carolina

Here are some tips for successful succession planning in North Carolina:

a. Start Early: It is never too early to start planning for succession. By starting the process early, business owners can ensure that there is sufficient time to determine long term goals, identify and prepare potential candidates to own and lead the business in the future, and to implement the necessary legal arrangements.

b. Involve Key Stakeholders: Succession planning should involve the input and participation of key stakeholders, such as the current owner and potential future owners, key management personnel. This will help to ensure that the succession plan reflects the needs and goals of the business and all parties involved.

c. Communicate Openly and Transparently: Communication between potential successors and beneficiaries is often key to successful succession planning. This will also help avoid potential legal disputes, such as those involving a contest of the owner’s will in the case of a family business, or those involving disgruntled key management or other personnel. 

d. Seek Professional Advice and Assistance: Engaging the services of a professional advisor, such as that of a North Carolina business attorney at Wilson Ratledge, will guide you and help you navigate the many succession plan options and their legal and tax considerations. 

e. Put the Plan in Writing: This applies to everything.  We have mentioned a few crucial documents already, and successful implementation of your succession plan requires a package of clear and consistent documents that will work together to ensure the smooth transition of your small business as part of your overall estate plan.  The documents typically required include some combination of the following:

i. Buy-Sell Agreements (also known as Shareholder Agreements or Member Agreements)

ii. Wills

iii. Trusts (there are multiple options for trusts in succession planning)

iv. Operating Agreements

v. Partnership or Limited Partnership Agreements

f. Review and Update the Plan Regularly: Succession plans should be regularly reviewed and updated to ensure that they remain relevant and reflect the current needs and goals of the business and key stakeholders. 

WR Attorneys Selected for 2023 Super Lawyers

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We are pleased to announce that 3 attorneys have been named 2023 North Carolina Super Lawyers by Super Lawyers magazine!

James E. R. Ratledge for Workers’ Compensation

Reginald B. Gillespie, Jr. for Business Litigation

Daniel C. Pope, Jr. for Workers’ Compensation

Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The annual selections are made using a rigorous multi‐phased process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.  Congratulations Jamie, Reggie, and Dan!

What Is Workers’ Compensation and How Does It Work?

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Workers’ compensation is a system in North Carolina that provides benefits to employees who are injured or become ill at work. The system is designed to help employees recover from injuries and return to their everyday lives as quickly as possible. 

Workers’ compensation insurance covers medical expenses, wage replacement, and other benefits. Workers’ compensation is mandatory in North Carolina, and almost all categories of employers must have this insurance for their staff.

What Types of Injuries Are Compensated for Under the Workers Compensation Plan in NC

Under the workers’ compensation plan in North Carolina, there are several types of injuries that are compensated for. These injuries can include physical injuries, mental health issues, and even death. Essentially, anything that seriously affects a member of staff’s health at their job is compensable under the state’s workers’ compensation program.

It is important to note the following eligibility requirements when considering filing for workers’ compensation in North Carolina:

i. The affected employee must be employed at the firm the injury happened.

ii. The affected employee must still have a valid employment contract at the time of the injury.

iii. The affected employee must have been injured while performing an authorized job duty.

What Types of Injuries Are Not Compensated for Under the Workers Compensation Plan in NC

In North Carolina, a few injuries are not typically covered by workers’ compensation. These include: 

i. Intentional acts

ii. Injuries that are not work-related (e.g., an auto accident outside of the workplace)

iii. An injury caused by the use of an intoxicating or impairing substance (e.g., alcohol) on the job

Also, under North Carolina’s Workers’ Compensation system, some injuries that are not covered by the plan include pain and suffering, as well as normal wear and tear that is peculiar to your line of work. 

The Process of Claiming Workers’ Compensation in North Carolina

In the event of an injury or illness, workers’ compensation is valuable protection. But even after your work-related illness or injury, there are still steps you need to take to get compensation. These steps include:

i. Report the injury to your employer: In North Carolina, as in most states, if you are injured at work and might need to seek medical attention from a doctor, you are required by law to report the injury to your employer. You can do this orally or in writing. If you wish to claim workers’ compensation in North Carolina, you must have informed your employer no later than 30 days from the date of the injury.

ii. Visit a hospital: The next step is to visit a hospital. This is important because, to claim workers’ compensation benefits, you will be required to provide hospital records as proof of your work-related injury or illness. It is also important to note that you can be compensated for your trips to the hospital. In North Carolina, if your hospital is 20 miles or more roundtrip from your home or office, you will be reimbursed at a rate of 54 cents per mile for every medically necessary trip you make to and from a doctor’s office.

iii. File a claim with N.C. Industrial Commission: After following through with steps (i.) and (ii.) above, you will then need to file form 18 with the North Carolina Industrial Commission. This form will ask for basic information about your injury and employer and will also document when and how you were injured. You are expected to make at least two copies of this form. The original copy is to be submitted to N.C. Industrial Commission, one copy is yours, and the last copy must be given to your employer. Afterward, the Industrial Commission will then process your claim and determine whether you’re eligible for benefits. 

What Are Some Reasons a Workers Compensation Claim Might Not Be Successful in North Carolina

Workers’ compensation claims can be complex, requiring injured workers to follow all the steps in the process to ensure that they get compensated. Some common reasons why an injured or ill worker may be denied include the following:

i. A filing for an ineligible injury

ii. An instance where an employer disputes the injury or the cause of the injury

iii. A lack of provision of all required documents (e.g., medical statements)

iv. Not filing the documents within the stipulated timeframes

v. Incorrect filling and filing of workers’ compensation documents

How Can You Ensure That You’ll Receive Your Workers’ Compensation After an Illness or Injury? 

North Carolina workers’ compensation covers medical expenses, wage replacement, and disability benefits. Workers’ compensation is important because it helps to ensure that workers can recover from injuries and return to their jobs. But how can you be sure you won’t get denied at any stage of the process?

To ensure you get what you deserve, you need to work with a North Carolina workers’ compensation attorney at Wilson Ratledge from the get-go. We know what to do and how to do it and would be happy to help. If you have filed a previous application that has been denied, you may also contact us to help you file an appeal.

North Carolina Real Estate Law: An Overview for Property Buyers

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To buy a home in North Carolina, you’ll need to be aware of the state’s real estate laws. This overview by the North Carolina real estate attorneys at Wilson Ratledge will help you understand the basics of buying property in North Carolina, including how to inspect properties, contract and negotiate deals, and more. 

What Rights Do Buyers Have Under North Carolina Real Estate Law?

If you buy a home in North Carolina, you have specific rights. These include:

  • The Right To Inspect the Property Before Making an Offer

Homebuyers in North Carolina have the right to inspect the property and then make an offer based on the results of that inspection. While an inspection is not compulsory, it is advised to do it as it might help you with verifying the accuracy of all the information provided about the property. An inspection does not only include checking the building and looking for any damage. It also includes checking for zoning permits and other permits that may have been issued and verifying any information listed on the listing with government records. 

  • The Right To Receive a Written Disclosure of Any Known Defects in the Property

Homebuyers in North Carolina have the right to receive a written disclosure of any known defects in the property they are purchasing. This disclosure can help buyers make informed decisions about whether or not to buy a property and protect them from potential financial losses if there are any defects in the property. The disclosure must be provided before the buyer signs any paperwork related to the purchase, such as a contract or any related documents.

  • The Right To Reject an Offer if It Is Not What You Wanted

If there are any problems with the property, the buyer can either back out of the deal or try to work out a solution with the seller. As we already said, the seller is required to tell the buyer about any problems with the property before a contract is signed. If after the disclosure (or after your inspection) you have a problem with the property, you can reject the seller’s sale offer. Homebuyers can also sue if they believe their rights to reject an offer have been violated.

What Are Some Common North Carolina Real Estate Disputes That Buyers May Face?

When buying a home in North Carolina, buyers often disagree about things like closing costs, repairs, and title issues. It is essential to have an experienced real estate lawyer on your side if you are facing any of these disputes to protect your interests.

In addition, it is important to understand North Carolina’s property tax laws, as they can impact a buyer’s bottom line. Finally, be aware of any zoning restrictions that may apply to the property you’re interested in, as well as any building or land restrictions specified by the municipality in which the property is located.

Are There Any Special Steps That Buyers Should Take When Purchasing a Home in North Carolina?

In North Carolina, buyers are urged to work with professionals when purchasing a property. Below are three categories of people that you need to work with to ensure you get the best deal and that your rights are protected:

  • A Certified Real Estate Agent

When purchasing a home in North Carolina, it is important to have the right knowledge. This includes having a certified real estate agent on your team. Certified agents have completed an accredited program in real estate and are qualified to provide you with the best advice for purchasing a home.

Certified agents can help you identify which area of the state is best suited for you, as well as recommend specific neighborhoods or communities. They can also help connect you with local vendors and resources that will make your home-buying experience easier.

  • A Home Inspector

A home inspector is invaluable when purchasing a home in North Carolina. A home inspector can help you determine the condition of the property and whether or not it is worth purchasing. A home inspector will also be able to identify any potential defects that may need addressing before closing on the property. 

When choosing a home inspector, make sure to ask for references and review their credentials before making your appointment. It would help if you also asked questions about their experience inspecting properties in North Carolina.

  • A North Carolina Real Estate Attorney

When purchasing a home in North Carolina, it is important to work with an experienced real estate attorney. A real estate attorney can help you understand the property market, the different types of homes available, and the legal process involved in buying or selling a home. 

If you are purchasing property in North Carolina, it is important to consult with a Raleigh real estate attorney at Wilson Ratledge before making any decisions. Our attorneys have years of experience in the North Carolina real estate market and will help you navigate all the complex legal issues that may arise during your purchase. Contact us today to get started on buying your dream property in North Carolina!