Raleigh Estate Planning and Corporate Law Attorneys

Estates and Trusts

Eminent Domain Laws in the State of North Carolina

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Eminent domain is the power of the government to take a person’s private property and convert it into public use under the Fifth Amendment.

North Carolina law permits the right of eminent domain, which is the government’s power to seize or “take” your private property for public use.

The North Carolina Supreme Court has defined “taking” under the power of eminent domain as “entering upon private property for more than a momentary period, and, under warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as substantially to oust the owner and deprive him of all beneficial enjoyment thereof.”

The Supreme Court also explained that the test of public use is not the advantage or great benefit to the public. Rather, an appropriate “public use must be for the general public, not a use by (or for) particular individuals.

Under eminent domain, the government may only exercise a taking power if it provides the property owner with “just compensation.” But exactly what constitutes “just compensation” may not be the ousted property owner’s idea of what would be a fair, reasonable, and accurate reflection of your property’s value.

Here, we will explain how the eminent domain process works, what courts have deemed “just” compensation, and the importance of understanding your rights as a North Carolina property owner.

How Does Eminent Domain Work?

First and foremost, the government cannot simply pull the rug out from underneath unsuspecting property owners: it must give the property owner appropriate notice of its intent to take the property under eminent domain. Further, the government must provide an offer of just compensation based on the fair market value of the property. The offer will include a summary of value, but the property owner can request a full appraisal instead.

Typically, in North Carolina, the state Department of Transportation (NCDOT) will attempt to negotiate the value of your land. A right of way agent, or “ROW agent” is the DOT’s representative who handles the case. The agent gets the DOT’s property appraisal and is in charge of negotiating with the landowner and his or her attorney. The ROW agent will make an offer to the property owner for the property based on the DOT’s own appraisal.

Like any other person who wants to buy a property, the ROW agent’s objective is to take the property for the least amount of money—regardless of whether that’s truly “just compensation.”

Because it’s their full-time job, the ROW agent has done this many more times than the average property owner has. He or she will know things about the process that the average citizen may never learn. As the “little guy” going up against the government, you need your own advocate with years of eminent domain experience and vast knowledge of this process.

Part of this analysis is to hire an independent appraiser to value your property. With this information, you and your attorney can determine if the State’s offer is fair. If not, you can reject the offer and try to negotiate a better one. Finally, if you reach an impasse, you can fight the DOT’s offer in court.

If there’s no settlement, the government will typically take your property by instituting legal action. The government will file a lawsuit and deposit the amount it believes to be just compensation with the court. The laws of eminent domain permit the landowner to withdraw the deposit without giving up any rights to seek additional compensation (provided your attorney files the appropriate motion with the court).

Of course, it’s best to rely on an experienced North Carolina eminent domain attorney to address the issues surrounding the filing a motion to withdraw the deposit, the deadlines for filing a response, preserving your property rights, engaging possible property valuation experts, and developing a legal strategy to bring about the best possible outcome in your case.

Can I Stop the Government from Taking My Property?

You can fight to stop the eminent domain process if the proposed taking fails to satisfy the requirements of a public purpose. If the test is met, the government can’t be stopped from taking your property, but again, you can try to get the best possible price for your property.

North Carolina courts usually order the property owner and the government seeking to take the property to participate in a mediated settlement conference. In this meeting, a neutral third-party will try to bring about a reasonable and agreeable price of settlement. However, the mediator doesn’t have the power to force either party to settle the dispute.

If there is no agreement, a 12-person jury will decide the amount of money to which you’re entitled from the government for the taking of your property.

Contact Our Experienced Real Property Attorneys     

There are many complex issues that you must address in the eminent domain process to make certain that you get the highest possible price for your property. This isn’t a do-it-yourself matter like filling in the blanks on a standard form, so don’t try to negotiate with the government on your own.

When it comes to protecting your property, understanding the laws surrounding eminent domain procedure is vital. Even more important is having an advocate on your side who can inform you of your rights as a property owner and help you staunchly protect them.

At Wilson Ratledge, our attorneys regularly advise our clients on the condemnation process in our State and work to ensure that they are positioned to gain the compensation to which the law entitles them. For questions or assistance, one of our experienced North Carolina real property attorneys at 919-787-7711 or via our contact form below. We look forward to serving you.

What is the Probate Process, and Can I Avoid It?

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In the conventional wisdom, the probate process does not tend to carry a positive association: it is known for being costly, time-consuming, and stressful. As a result, many people who have experienced the probate process following the death of a loved one want to avoid it in the future and might feel motivated to help other family members avoid it through intentional estate planning.

However, there is quite a bit of confusion that still surrounds the probate process. What exactly does probate mean? How does the process work? Is it generally good for families who want to see their deceased family members’ wishes honored? If not, is it possible to avoid the process? If so, how?

Here, we discuss the probate process, explaining what it is, how it works, and what you can do now to protect your estate – or your loved ones’ estates – in the long term.

What is Probate?

When a person dies, everything he owns, from the cash in his wallet to the money he invested, is considered a part of his estate. Probate is the legal process of settling this estate by paying off the decedent’s debts and distributing his assets.

The probate process is designed to effectively manage estates in cases in which the decedents failed to provide specific directives. It can be lengthy, often taking more than twelve months to complete. From court costs to attorneys’ fees, it can be expensive. And for those who wish to keep their family affairs private, it’s important to know that matters of probate are public record: once an estate is probated, anyone can access information about it, including who inherited the decedent’s property. As such, for many family members mourning a loss, the probate process can make an already emotional and trying event more challenging.

How Does Probate Work?

Upon a person’s death, a personal representative will be designated to manage the estate. This person may have been named in the decedent’s will. If the decedent did not designate anyone, another qualified individual – dictated by State law – will be appointed. The personal representative will submit an application to the court along with a preliminary inventory of the estate, a certified copy of the deceased’s death certificate, and a copy of the will (if applicable). The personal representative will pay a fee to open the estate and must take an oath to carry out certain responsibilities to settle the estate.

During the probate process, the personal representative will fulfill several duties, including the following (among others):

  • Filing an inventory all of the decedent’s assets;
  • Paying any of the estate’s outstanding debts;
  • Providing notice to known creditors;
  • Filing taxes for the decedent;
  • Setting up a bank account to pay for any expenses incurred by the estate, such as debts and funeral costs;
  • Selling assets to cover debts if needed;
  • Distributing assets to known heirs; and
  • Preparing a final accounting to close the estate.

Not all assets are subject to probate. If the decedent named a beneficiary for an asset in a will or by some other instrument, generally, that asset will not pass through probate.

Additionally, North Carolina law specifically designates certain items that do not pass through probate, for instance, life insurance proceeds with a named beneficiary, securities held in transfer-on-death accounts, and jointly-owned property (when the joint owner still lives), among others.

If I Want to Avoid the Probate Process, Can I Set up My Estate Plan to Do So?

Proactively setting up an estate plan to avoid probate can lighten the burden that the process often imposes. Here are a few ways to do so.

Name a beneficiary for your accounts. The most straightforward way to avoid probate is to ensure there is a named beneficiary on all of your – or your loved ones’ – accounts. This should include all retirement accounts, brokerage accounts, bank accounts, and insurance policies, as well as Payable on Death (POD) or Transferable on Death (TOD) accounts. Failure to name a specific beneficiary will result in accounts being probated upon the account holder’s death.

Protect your assets. Naming a beneficiary through a POD or TOD clause will only protect accounts, not personal effects. Living trusts are a tool that can be used to keep any asset out of probate. Bank accounts, real estate, or other personal property like a vehicle can be placed in a living trust. Ownership of the property will be transferred to you as trustee and upon your death, your successor will take control of the trust and distribute the property as dictated by the terms of the trust without going through probate.

Consider a joint tenancy. This option frequently applies to married couples, business partners, or other individuals who share ownership rights in property. Property held in joint tenancy does not pass through probate. Instead, the surviving owner automatically takes full ownership of the shared property.

Designate an heir and keep your assets simple. Estates limited to $20,000 in personal property can be settled through a simplified process that does not require formal probate. Additionally, a surviving spouse stands to inherit all the decedent’s assets and the estate’s value is $30,000 or less, the estate can be settled without probate. If the surviving spouse is the only heir, a simplified probate process known as “summary administration” will apply in place of traditional probate.

Contact Our Experienced Estate Planning Attorneys     

When it comes to securing your assets – or protecting your loved ones’ assets – an estate plan can eliminate much of the burden, cost, and uncertainty that can come from relying on the administrative process. At Wilson Ratledge, our attorneys regularly assist our clients in preparing estate plans that ensure their desires and wishes will be met. For assistance setting up your estate plan, contact one of our experienced North Carolina estate planning attorneys at 919-787-7711 or via our contact form below. We look forward to serving you.

What Is A Special Needs Trust, and How Do I Know if I Need One?

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If a loved one is disabled, elderly, or otherwise unable to manage his finances, what can you do to help? These individuals often turn to state or federal assistance programs to cover their basic living expenses. However, there are often expenses that public benefit programs do not cover. Further, these programs have strict qualification limits. As such, if your loved one comes into money due to a family death or other life event, it could cost him his much-needed public assistance benefits.

Fortunately, the law supplies a remedy in the form of special needs trusts. Here, we will explain what this type of trust is, how it works, and why it is necessary.

What Is A Special Needs Trust?

At its most basic level, a trust is a legal instrument designed for the safekeeping of assets. Assets like cash, investments, or property can be held in a trust until a specific time or condition warrants distribution. A trustee – the person or entity who is designated to manage the trust – must distribute the assets within the trust in a way that is consistent with the beneficiary’s best interests. This includes authorizing any change to or withdrawal from the trust.

A “special needs trust” or SNT is a specific type of trust that provides a supplemental benefit to a disabled or elderly beneficiary without disqualifying the individual from any public assistance benefits.

How Does A SNT Work?

SNTs are used to fund expenses outside the scope of what is covered by government assistance. The goal is to give the beneficiary access to those things that will enhance the beneficiary’s quality of life. An SNT allows the beneficiary to continue to receive public assistance, while also having a source to fund other goods and services that public assistance does not cover.

By holding the assets of a disabled or elderly individual in an SNT, any increase in assets or income will supplement the beneficiary’s circumstances, rather than potentially disqualifying them from the public assistance programs on which they rely. Many of these individuals depend on programs like Medicaid, Social Security Income, and similar resources to cover basic living expenses. SNTs are intended to fund those expenses outside of the basics that are covered through other means. Furniture, vacations, specialized medical procedures, and sporting equipment are just a few things an SNT can fund.

What Warrants the Use of A SNT?

SNTs were created by federal law to protect Medicaid and SSI recipients. Because public assistance programs impose strict limits regarding assets and income, the SNT keeps the assets of public assistance recipients from barring additional benefits.

For example, if a benefits recipient receives a lawsuit settlement, inheritance, or other monetary gift or award, this change in assets could disqualify him from receiving further benefits. The SNT covers the percentage of the person’s financial needs that public assistance payments do not cover. The assets held within the trust do not count, essentially, to qualify (or bar) the person for public assistance.

In other words, you may gather your loved one’s assets into an SNT to “shield” them from governmental scrutiny, thus effectively allowing your loved one to still qualify for public assistance.

Even if the beneficiary does not currently receive government assistance, an SNT can serve as a supplement to benefit an individual who is unable to manage his finances. Should the beneficiary need to pursue public assistance in the future, the SNT can serve as an immediate resource to fund your loved one’s lifestyle and cover his expenses during the often-lengthy application process for most benefit programs.         

Further, parents of children with special needs can benefit from setting up an SNT, which will ensure that their children have the resources to meet their future needs without risking the ability to receive public assistance benefits. In these cases, the SNT provides a means to pay for goods and services not covered by these benefits. If a parent simply left assets to a disabled child through a standard will, such inheritance could disqualify the child from receiving any government benefits.

How Is A SNT Created?

There are three types of SNTs in North Carolina:

A Self-Settled SNT

The self-settled SNT and the pooled SNT are both funded by the beneficiary’s assets. The name is misleading, however, as a self-settled SNT must be established for the beneficiary’s benefit by a parent, grandparent, legal guardian, or a court and not the beneficiary himself.  

A “Pooled” SNT

Unlike the self-settled trust which is only an option for beneficiaries under the age of sixty-five, the pooled SNT does not have any age restriction and it can pool the resources of many parties, including the beneficiary, to fund it. Pooled SNTs must be managed by a nonprofit association. Medicaid must be reimbursed with any remaining funds in the trust for all self-settled trusts, regardless of the source of the funding.

A Third Party SNT

Finally, third-party SNTs are funded by someone other than the beneficiary. A testamentary trust created by a parent for the benefit of a special needs child to take effect upon the parent’s death is one example of a third-party SNT. These trusts do not have an age restriction and there is no requirement to repay any Medicaid expenses upon the death of the beneficiary.

It’s vital that the person or entity who creates the trust – or its legal representative – crafts the language of the trust carefully to ensure it is valid and will withstand scrutiny. Ideally, the SNT will be created before the beneficiary reaches the age of 65.

Contact Our Experienced Estate Planning Attorneys     

At Wilson Ratledge, our attorneys assist clients in preparing and executing documents that help them remain financially secure and sound. We regularly help clients set up special needs trusts to ensure their family members are sufficiently protected. For assistance, contact one of our experienced North Carolina estate planning attorneys today at 919-787-7711 or via our contact form below. We look forward to serving you.

How A Special Needs Trust Can Help Your Family

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special needs trust

Families with special needs members have more options today than ever before. As caretakers age and special needs family members reach adulthood, it’s critical to plan for the well being of all family members. Fortunately, you have many options at your disposal.

Your loved one with special needs may qualify for important government benefits. While it’s important to set funds aside for your loved one’s care, it’s also important to structure the funds in a way that your loved one doesn’t lose eligibility for government benefits.

U.S. and North Carolina law allow you to do just that. If you have a special needs family member, you can create a special needs trust that can help your loved one get the help that they need while they remain eligible for government assistance programs. Here’s how a special needs trust can help your family:

What is a special needs trust?

A special needs trust is when you set property aside in a separate legal entity. One person manages the assets in the trust for someone else’s benefit. The funds are the property of the trust, and the trustee uses them for the good of the beneficiary. The person who manages the assets in the trust is called the trustee. The person who receives distributions of property from the trust is called the beneficiary.

In the case of a special needs trust, the trust exists to help someone who lacks the ability to manage their own finances. Because of a physical or mental disability, the beneficiary needs help providing for their basic needs and managing their finances. A special needs trust is the primary way that families arrange finances to care for someone who is unable to care for themselves.

What can a special needs trust cover?

You can tailor a special needs trust to meet the needs of the beneficiary. The trust can provide for the needs of daily living, or it can provide for supplemental care like vacations, education, vocational training, recreation and more. You may create the trust to be very generic or specific depending on the needs of your loved one.

How do you structure a special needs trust to keep the beneficiary eligible for government benefits?

One of the primary purposes of a special needs trust is to ensure that your loved one remains eligible for government assistance. When you have a loved one who has special needs, there’s a good chance that they qualify for government assistance programs like Medicaid, housing or cash benefits. Medicaid can be a welcome relief for a person who may have unique and extensive medical care needs. When you set up your trust, you want to make sure that the trust doesn’t impact their eligibility for benefits.

If a person receives assets directly in their name, these assets count against them when the government determines eligibility for assistance programs. The government requires them to spend their own funds first before they’re eligible for public help. By placing the funds in a separate trust with a separate legal entity, the funds are not the property of the beneficiary. They don’t count against the beneficiary when the government looks at their assets in order to determine eligibility for assistance programs. A special needs trust is an important way that families can make sure that what they set aside for their loved ones truly goes to help their loved one and enhance their quality of life.

As you prepare the special needs trust, it’s important to pay attention to the language that you use. The trust should state that it provides supplemental care beyond what government resources already provide. You should state that the trust is not intended to provide basic support. Your trust should reference relevant portions of U.S. law that are required to protect government benefits and make your intentions clear.

What if I don’t think my loved one needs government benefits?

Even if you don’t think that your loved one needs government benefits, you never know what might happen in the future. It’s likely a good idea to structure the trust in a way that leaves the door open if they need government help in the future. Special needs trusts are an important and common wealth-management tool for people of all economic groups. An experienced special needs trust attorney can help you examine your situation to determine the best path for your family.

Who can serve as trustee of a special needs trust?

Family members can serve as trustees, or you can work with a professional third party to manage the trust. There are pros and cons to each choice. A special needs trust is often a labor-intensive asset to manage. Family members may quickly tire of all of the work involved in managing the trust. On the other hand, a professional third party may charge fees for their services that can quickly add up.

There may be restrictions on who can serve as a trustee depending on who stands to receive the trust’s funds when the beneficiary dies. If the trustees are the beneficiaries, it might create a conflict of interest. In addition to these options, you might join a pooled trust where you join with other families to pool your resources under one management company. If you use a pooled trust, you still have your separate account, but you share management expenses and fees.

Can the beneficiary fund the trust with their own property?

If the beneficiary plans to fund the trust with their own property, there are a few special things to be aware of. Yes, it’s possible for the beneficiary to fund the trust with their own resources. In most cases, a self-funded trust must provide for reimbursing the government for Medicaid expenditures when the beneficiary dies.

When the beneficiary dies, the remaining trust property goes to the government to reimburse them for their medical expenditures through Medicaid coverage. In addition to the Medicaid reimbursement requirement, a self-settled trust is only an option when the beneficiary is disabled under the government definition of disabled.

How long does a special needs trust last?

A special needs trust typically lasts until the beneficiary dies or the funds run out. You can arrange for additional transfers of property to the trust in a way that doesn’t hurt your loved one’s eligibility for government benefits.

You can structure the trust to provide whatever your loved one might need including vocational training, recreation and vacations, communication equipment, accountants, attorneys and animal service. An experienced estate planning attorney can help you create a trust that meets your loved one’s needs and gives you the peace of mind to know that your loved one is cared for in the years to come.

How Do I Contest A Will In North Carolina?

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challenge a will in nc

In North Carolina, there’s a process to challenge the validity of a will. North Carolina laws are in place to give interested parties the opportunity to question a will. A will challenge, or will caveat, has specific procedures that need to be followed. Here’s what you need to know about how to contest a will in North Carolina:

You must have the standing to challenge the will

Only an interested party may challenge a will. A person with standing is any person who stands to gain or lose from the probate of the will. If you’re a family member who would inherit if the will isn’t valid, you have standing. In addition, any person or entity named in the current will or named in any prior wills also has standing. If you have an interest in the outcome, you can file a caveat to challenge the will.

To challenge a will, you must file your caveat with the clerk of court

Challenging a will in North Carolina begins with filing the will caveat with the clerk of superior court. It’s important to file the caveat with the appropriate clerk and in the right court. The court can dismiss a caveat that isn’t appropriately filed. Once you file the caveat, the other interested parties have a chance to respond and participate in the proceedings.

You must notify all interested parties

It’s up to you to notify all of the other interested parties that you’re contesting the will. You must serve them with a copy of the caveat paperwork. Providing service of the paperwork ensures that all of the parties have the opportunity to access the courts and participate in the proceedings.

There are a few legal grounds to challenge a will

There are only a few grounds to challenge the sufficiency of a will. They include:

Lack of capacity

Lack of capacity means that the person who makes the will doesn’t understand what they’re doing when they make the will. It means that they don’t understand their decisions and the impacts of their decisions on the disposition of their estate. There’s a presumption that a person who makes a will has the capacity to understand the choices they’re making. Even a person with some mental difficulties may understand the situation long enough to make an effective will.

Undue influence

The other common ground for a will challenge is undue influence. To demonstrate undue influence, the person who files the will must show that the will creator was open to influence. They must show that a person with access to the will creator tried to exert influence over them. Finally, the person who challenges the will must show the result of the influence is that the will is different than it may have been without the person’s influence.

To decide if undue influence impacts the result of the will, the jury may consider a number of factors. These factors include:

  • The age of the person who makes the will
  • Physical and mental vulnerabilities of the will creator
  • Whether the beneficiary lives with the will creator
  • If the beneficiary supervises the will creator
  • Attempts by the beneficiary to isolate the will creator
  • Revocations of prior wills
  • Changes from prior wills
  • Bequests to someone without blood ties
  • Disinheriting blood relatives
  • Whether the beneficiary helps create the will

A jury decides the case

It’s up to a jury to decide whether the will represents the wishes of the creator. The parties can’t agree to waive the jury. They also can’t stipulate to any facts. A judge can award summary disposition and dismiss the will challenge if the case is clear, but summary disposition in a will case is very rare.

The burden of proof

The jury decides the case by the greater weight of the evidence. That means they decide if the will more likely than not represents the wishes of the will’s creator. Essentially, the jury sides with the person that they think is more likely to be correct.

You may mediate the case with other interested parties

If you’re a party to a will caveat, you may mediate the case with other interested parties. You can agree on a resolution to the case that follows the terms of the will, or you can settle on different terms that you create with the other parties. Not all will caveats use mediation as a case resolution tool. You have the right to reject mediation and try your case before a jury.

You have three years to bring a will challenge

If you think a will may be invalid, you have only a limited amount of time to challenge it. You have three years from the time that probate begins in the case. If you’re under a disability, a minor or in prison, you have three years from the time your disability ends.

Practically, it’s important to bring your will contest as soon as possible. When you file your will contest, distribution of the estate stops until the contest resolves. If you don’t file your caveat until distribution is underway, you risk the added difficulty of needing to find and retrieve assets that have already been distributed to third parties.

The court may order the estate to pay attorneys fees

A will party may be costly for the estate. In most cases, the court charges the cost of the will caveat to the estate. That means the prevailing party’s award is reduced by the costs of attorney fees to all of the parties involved. If the caveat has no merits, the court can refuse to order payment of attorney fees. In addition, the court may order the person who files the caveat to pay a bond that can cover the costs of the caveat in the event that the caveat has no merits.

Each case is different, and will caveat cases are often complex. An experienced will caveat attorney will be able to help you navigate through all the requirements to get the best outcome for you and your family. For a consultation to learn more about will caveats in North Carolina, call our office today at 919-787-7711 or fill out our contact form.

Planning For An Aging Parent In North Carolina

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Planning for one’s own potential long-term care needs is something few of us do, and typically only when it comes time that either mom or dad can’t live by themselves do we then try and figure out how to handle that dilemma. While there may be no easy choices, it is far better to be proactive and ahead of the curve than try and play catch up after the fact.

Communication is the Key

Since this issue impacts all members of the family across generations, everyone has a strong interest in addressing the specifics. Who initiates the discussion is far less important than the fact it becomes a topic of discussion. A couple of good questions to address are:

  • Have your parents made any long range plans?
  • Are there financial resources available from your parents? How about from you or your siblings?
  • Is staying in their home an option with either daily or live-in care?
  • Can your home accommodate one or both of your parents if necessary?

These are just some of the questions that must be answered, and as indicated, the sooner the better. A threshold issue is understanding the finances involved in elder care.

The Numbers

Since 2004, the Genworth Cost of Care Survey has studied long term planning costs. The most current data for monthly costs of various care options:

  • Home health care – around $4000
  • Adult day care – around $1500
  • Assisted living facility – between $3000 – $4000
  • Nursing home care – between $7000 – $8000

The Options

  • Insurance – It can truly be said of insurance that it is something you need to have but hope to never have to use. For long term care insurance, the earlier a policy is taken out and the healthier the applicant is, the lower the costs. One option to consider is if mom and dad cannot afford the premiums, perhaps the kids can. This is certainly a less expensive option than the monthly out-of-pocket costs as indicated above.
  • Public programs – Unfortunately, Medicare does not offer long term care as part of its program. For those with very limited income and few assets, Medicaid may be an option. For those who have honorably served our country, the Veteran’s Administration has certain benefits available.
  • The Family – Unfortunately, for too many people, the burden of long term care falls on the family. It’s not so much the individuals offering the care don’t want to help, more often it’s the high cost borne by the caregiver. Caregivers often need to reduce their own hours of work or stop altogether, which can have a long range negative impact on their own retirement security.

An estate planning attorney can assist you not only in financial matters involving the disposition of your estate after you pass, but also in establishing and maintaining a high quality of life in your sunset years.