North Carolina Increases Spousal Allowance

​North Carolina law recognizes the unique bond of marriage in many ways. This public policy comes into play in several ways upon the death of one spouse.

First, the Elective Share ensures no one can leave their spouse out of their Last Will and Testament. Second, when one spouse dies, any real estate titled in both of their names will be inherited by the surviving spouse.  A third example is the topic of this post: The Spousal Allowance.

Previously, the Spousal Allowance was known as a Widow’s Allowance. The assumption was that women were economically dependent on their husbands. Because times have changed, North Carolina law now ensures that any surviving spouse will have the right to a certain share of his or her late spouse’s personal property to use for living expenses.

Effective January 1, 2019, a surviving spouse is now entitled to up to $60,000.000 of the personal property of the deceased spouse. This law doubled the amount of personal property allowed by the Spousal Allowance.

To clarify, here are a few definitions and tips:

• “Personal Property” means all property except real estate. This may include bank accounts, automobiles, mobile homes, jewelry, clothing, and tools.
• The Spousal Allowance takes precedence over any unsecured creditors’ claims, liens, and judgments, except loans secured by the personal property.
• There is a legal process for a widow or widower to claim a Spousal Allowance.
• A detailed Estate Plan can help make this process and probate easier.

​If you have questions about the Spousal Allowance or other issues related to North Carolina Estate Planning or Probate, please feel free to give us a call at 704-817-4710.

Effective January 1, 2018, North Carolina adopted a new statute pertaining to the creation of a Power of Attorney (POA).  A POA is a legal document in which one person (Principal) gives another person (Attorney-In-Fact) the authority to act on his/her behalf in specific ways. These powers may include buying and selling property, using and creating bank accounts, filing taxes, buying and selling real estate, and other important matters related to your property. The POA does not authorize anyone to make medical decisions on your behalf and should not be confused with a Medical Power of Attorney.

If you do not have a Power of Attorney it could cause significant financial problems in the event of a major illness or injury making you unable to handle your own financial affairs. If someone you trust does not have the legal authority to use your money and other assets to pay your bills, then your mortgage, your car payments, your insurance, and your utilities may not be able to be paid.  For this reason, you should consider consulting a good estate planning attorney about whether you need a POA.

The new statute for the creation of a POA added some very distinct provisions for the authority conveyed to the Attorney-In-Fact. Here are some of the key facts about this new North Carolina Power of Attorney Act:

• Old POAs remain effective
  • A POA based on the old law remains effective, so long as it was executed properly before January 1, 2018.

 

• New Rules for POA Execution
  • A POA signed in North Carolina on or after January 1, 2018 is valid if it is (1) signed by the principal or in the principal's conscious presence by another individual directed by the principal to sign the principal's name on the POA, and (2) acknowledged (i.e., notarized).

 

• Effective When Signed
  • A POA created under the new law is immediately effective, unless made effective only upon the happening of some future event.
  • In most cases, this rule is a good one. The most common need for a POA arises when the Principal becomes unexpectedly incompetent as the result of injury or illness.
  • In these situations, the Agent-In-Fact can begin to assist the Principal immediately.

 

• Power Until Death
  • A POA created under the new law remains effective even after the Principal becomes incompetent, unless otherwise stated.
  • The POA terminates when the Principal dies.
  • However, you can set other limits on the POA, and you can always revoke the POA.

 

• For Handling Real Estate
  • If you want to POA to include the right to buy and sell real estate, you should have two (2) witnesses to the execution of the new POA and have their witnesses notarized.
  • This allows for the POA to be recorded in your county’s Register of Deeds and can be accepted for real estate transactions.

 

• Increased Protection Against Abuse
  • You should select someone to be your Attorney-In-Fact only if you have a firm belief that they are entirely trustworthy.
  • However, the best policy may be to use new provisions of the 2018 NC POA Act to provide better protection
  • For example, there are certain types of authority which the Attorney-In-Fact only has under the 2018 Act if granted by the Principal specifically.  These authorities include making gifts, changing beneficiaries on life insurance, and modifying trusts.
  • Even if granted, the Attorney-In-Fact must show that these actions would be in the Principal’s best interest.

 
We are glad to review your current Power of Attorney and help you determine if, due to changes in the law or changes in circumstances, you would benefit from a new POA. We can also review your other Estate Planning documents, and help you update or create your estate plan. We believe in helping our clients make the best-informed decisions and would be glad to talk with you.

Every company with employees needs an employee handbook customized to its unique business needs. A customized employee handbook serves multiple positive functions. At the same time, not adopting an employee handbook, having a handbook that is inconsistent with legal requirements, or using a document not customized to the employer’s actual situation will have negative consequences. 

A well-written employee handbook is a crucial tool for communicating with your company’s employees.  From the first page, the company and its management can set a positive tone by explaining their vision for the company, and help employees visualize how they fit into those plans.

Your company’s employee handbook also sets clear expectations in a variety of key areas.  For example, the company can set out its standards for employment eligibility, job classifications, employee benefits, work hours, attendance expectations, and the company’s disciplinary processes. Additional issues often addressed might include probationary employment periods, dress code, general safety programs, leave policies, and its incident and accident reporting requirements.

A well-planned employee handbook also addresses important legal matters such as anti-harassment and anti-discrimination policies, workers’ compensation, how the company deducts for mandatory federal and state withholding, and applicable Federal and state employment laws such as FMLA, the ADA, and the alphabet soup of other applicable laws.  You should also address laws which may regulate employment in your company’s line of business, if applicable. 

You will not want to use a generic employee handbook that is not based on your company’s actual operations and specific needs. Neither should companies use handbooks that have not been vetted by an attorney for the states where they operate. For example, South Carolina has a specific statute which, upon compliance, allows employers to feel confident that their employee handbooks can be altered as needed for changing company needs.  Failing to comply with this statute can make the employee handbook into a contract, which the employer cannot alter without the employees' agreement.   

Once the handbook is in place, it should not sit on a shelf and collect dust. It is important for all company leaders, as well as employees, to become familiar with its terms through review and training. The handbook can be changed, and should be where necessary. But the employee handbook should be followed to ensure continuity and to protect the company. Having legal employment practices in place and following them on a regular basis is good for morale and helps demonstrate that your company treats employees fairly and consistently.  Having a predetermined standard for responding to various HR issues also protects a company from serious financial liability, including claims of discrimination and a failure to comply with applicable laws. 

Involving an attorney who is knowledgeable of applicable employment laws and familiar with your company's business operations in the drafting and updating of your company's employee handbook, as well as in providing guidance on HR issues,  protects businesses' bottom lines by demonstrating compliance with predetermined HR policies and applicable employment laws.

Many people start new businesses without seeking professional advice on the best type of business entity for their particular situation. An experienced business attorney and a good tax CPA can help business owners maximize their return on investment, minimize taxes, and limit their personal liability.

For example, entrepreneurs may create a corporation or limited liability company (LLC) and later find out that they’ve stumbled into costly tax consequences that could have been avoided.

Other business owners do not set up a corporation or LLC at all. In this case, any customer or third party can directly sue the business owners. The owners risk all their personal and business assets and possible bankruptcy. Solid legal planning and advice can help protect what they’re building.

There are also a long list of steps required to create an LLC or corporation beyond filing paperwork with the North Carolina Secretary of State. An experienced business attorney can guide business owners through these requirements and important decisions.

We do not propose a cookie-cutter approach. Each business is different and each situation is unique. Whether you are in the planning stages, or if you have been in operation for several years but have not had the benefit of working with an experienced business attorney, we would be glad to talk with you about these issues.

In today's edition of The Charlotte Observer, interested readers can learn some very basic points about the process through which one of Charlotte's long-time local favorite restaurants,  Bojangles’, will transition from a privately owned company to one where fans of the chain's chicken and biscuits can own a piece of their favorite restaurant. This process is called an Initial Public Offering or an IPO.

Most companies remain privately owned but that does not mean that individuals and companies can’t buy part (or all) of an existing business. The company’s owners may be willing to sell their business. Other individuals or companies may be intrigued by the possibility of getting into business for themselves or expanding their existing business by buying another company. The 2 biggest issues are (a) finding out what businesses might be for sale and (b) a fair price for the company.

In many cases, The Canipe Law Firm, PLLC works with prospective buyers or sellers to help answer these questions and to work out a deal. In other case, we are retained by a business broker to handle a  business sale which is ready to close.  Business brokers provide a tremendous service by creating a market for buying and selling privately owned companies.  

Not every attorney understands this type of matter. Many attorneys focused on representing business do not have experience with buying and selling business.  There are many moving pieces and questions to be asked and answered. In whatever role we are asked to handle, The Canipe Law Firm’s experience in this specific legal field allows us to provide solid legal service.

For information on the Bojangles' deal, you might want to go to this link: http://www.charlotteobserver.com/news/business/article20434572.html

In many cases individuals claim to have been hurt at work but they do not know whether what happened qualifies as workers’ compensation injury under North Carolina law.  In the recent decision by the North Carolina Court of Appeals, Allsbrook v.  Illinois Tool Works/Wilsonart, we find a very good discussion of the legal standard that applies in most North Carolina workers’ compensation claims: the “injury-by-accident” standard.

What Are The Primary Benefits Under NC Workers’ Compensation Law?

If an employee has a North Carolina workers’ compensation injury, their employer (almost always through an insurance company), will have to provide (1) medical treatment and (2) lost wage benefits to the injured employee, among other benefits. All North Carolina employers with at least three employees must provide workers’ compensation benefits. When an individual needs medical treatment and cannot work due to their injury, knowing if they are entitled to workers' compensation benefits is crucial.

What’s An Injury-By-Accident?

Under the “injury-by-accident” standard, an employee’s injury is compensable (entitling them to workers’ compensation benefits) if (1) the injury took place “in the course and scope” (2) of their assigned work duties and (3) was caused by something unexpected that happened during the work duties. In other words, there needs to be an injury caused by something unexpected that took place while the employee was working. This is how North Carolina defines an “injury-by-accident” for purposes of workers’ compensation.

The Key Facts of the Allsbrook Case

In the Allsbrook case, Mr. Allsbrook worked as a “saw helper” at an Asheville area company which manufactures kitchen and bath countertops. The primary dispute in this case was whether Mr. Allsbrook was doing his normal job in the normal manner when he felt a pop in his chest. Mr. Allsbrook suffered a pretty significant injury, requiring surgery to his right shoulder and sterno-clavicual joint, among other problems.  This injury has caused him to be out of work since 2009.

Mr. Allsbrook worked as part of a team which cut the countertop materials to specific lengths using large industrial saws. At the hearing, Mr. Allsbrook testified that he was using an older, manual saw that was rarely, if ever, used for his job. However, the injury report from the employer stated Mr. Allsbrook was using a newer, less physically demanding saw when he felt pain.

Probably the most crucial evidence came from Mr. Allsbrook’s own lips. Early on, he gave a recorded statement to the insurance company.  He agreed that he was doing his normal job in the normal way when he felt pain near the end of his February 26, 2009 shift. At the original hearing, Mr. Allsbrook’s former manager, who no longer worked for Wilsonart, testified that the saw which Mr. Allsbrook was using on the day of the injury was very much in regular use by Mr. Allsbrook in doing his job. There was similar testimony from the plant manager for the employer.

At The Commission Hearing

When this claim was heard by the North Carolina Industrial Commission, the original hearing officer (called a “Deputy Commissioner”) decided to believe the testimony and evidence that Mr. Allsbrook was doing his normal job in the normal way when he felt the pain in his chest.  Thus, she ruled that Mr. Allsbrook did not have a compensable claim. Because his injury was not caused by an “accident" that occurred while he was working he was not entitled to have his medical bills paid through workers' compensation. Nor was he entitled to recover any lost wages from the insurance company.

Thereafter, Mr. Allsbrook’s case was heard on appeal by three Commissioners at the North Carolina Industrial Commission, who are part of a group of individuals who make up The Full Commission.  The Full Commission had the option to re-consider all the evidence and was not required to rule the same way as did the Deputy Commissioner. They could have decided that the weight (or majority) of the evidence proved Mr. Allsbrook injured his shoulder due to an “injury-by-accident.” However, they agreed with the Deputy Commissioner, and ruled against Mr. Allsbrook. The Full Commission ruled that Mr. Allsbrook was not  entitled to any worker’s compensation benefits.

At The NC Court of Appeals

This week, the North Carolina Court of Appeals also ruled against Mr. Allsbrook. However, they were applying an entirely different legal standard. At this point, the judges simply asked whether there was any credible evidence on which the Full Commission had relied in ruling against Mr. Allsbrook. In this instance, there was clearly good and credible evidence on which both the Deputy Commissioner and the three member panel of the Full Commission relied.

In my judgment, Mr. Allsbrook’s early statement to the insurance adjuster, that he was doing his normal job in the normal way when he felt this pain, was probably the decisive factor.

What If Mr. Allsbrook Had Hurt His Back?

What you might find puzzling is that, if Mr. Allsbrook had injured his back, rather than his shoulder in this case, he would almost certainly have won.  There is a lower, and easier to meet, standard for a compensable back claim in North Carolina: the “specific traumatic incident.” No accident is required to meet this standard.

What Lesson Can You Learn?

Both employees and employers need to understand these legal issues. If you have questions, please consider consulting with an attorney who handles North Carolina worker’s compensation claims to understand this issue and the various rules that apply to specific types of injuries in the workplace.

 

Let’s suppose you’ve built a thriving and successful family-owned business. And perhaps you have passing thoughts about retiring someday. What happens when you leave? Who takes over management? Who will own the company?

This is a complex issue. The right people to run the company when the present ownership retires might be the adult children of the owners. Or, some of them may not have the right skills or the interest in the company. Maybe the right person to take over as president of the company is a key employee who isn’t a relative. Or, perhaps another company or set of investors might find value in purchasing your company.

We could list an endless list of scenarios. However, the big question remains, what comes next? The vast majority of family-owned businesses don’t last to the second generation, much less the third generation. Even in the best businesses, making the right transition requires serious conversations and hard questions. 

A strong team of advisors is crucial to making this transition. A business attorney can help make sure the company’s records are in good order so that even an unexpected purchase offer can be readily considered. Your company’s CPA can help ensure proper financial records are kept. If the company is large enough, having an experienced CFO will help put the financial house in order, or engaging a fractional CFO on an ongoing basis can provide the same value.  Investment bankers and business brokers can also be part of the answer.

Getting a company ready to sell an be a lengthy process.  There are sure to be both personal and financial considerations.   Today is a good time to start having these conversations.

Below is a link to a very useful article with some great questions built around a real-life situation. It’s worth your time to read:

http://finance-commerce.com/2014/02/how-to-the-delicate-business-of-succession-planning/?utm_content=buffercbbab&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer