The North Carolina Association of Defense Attorneys 46th Annual Meeting will be held in Hilton Head Island, South Carolina, June 8, 2023 through June 10, 2023. Attorney Kristine L. Prati, 2022-2023 Vice-chair of the Workers’ Compensation practice group of the NCADA, will speak before other professionals on the ‘Impact of Recent Opinions in Workers’ Compensation’. This year, her session will provide a summary of the recent decisions in the first extended benefits case, Sturdivant v. N.C. Dept. of Public Safety, and will include in depth discussion on the removal of second opinions from the fee schedule, lack of definition of “usual and customary” fees, and ongoing pre-payment issues.
How Do You Set Up A Living Trust In North Carolina?
Setting up a living trust in the state of North Carolina can be tricky. But, with the right team on your side to help, the estate planning process in North Carolina becomes much more manageable. Our North Carolina estate planning and trusts attorneys at Wilson Ratledge can help you craft that plan.
What Is A Living Trust?
A living trust is defined as the following: a trust in which the person who creates the trust can alter it at any time or, if they are so inclined, to end the trust altogether.
The opposite of a living trust is an “irrevocable trust.” By setting up an irrevocable trust, you do not have the ability to alter or end the trust at any time.
Many people refer to a living trust as a “revocable trust.” So, if you hear that particular phrase mentioned, know that it refers to a living trust.
What Are The Advantages Of Setting Up A Living Trust?
Setting up a living trust offers a wide assortment of advantages. Some of the most notable benefits that can come from setting up a living trust are as follows:
- Probate avoidance: Assets placed in a revocable trust typically do not need to go through probate, which can save your beneficiaries time, legal fees, and court costs.
- Privacy: Unlike a will, a revocable trust does not become part of the public record upon your death. This means that the details of your trust and the assets it holds remain private.
- Control and flexibility: With a revocable trust, you can maintain control over your assets during your lifetime and make changes to the trust, including amending or revoking it, as your circumstances or wishes change.
- Incapacity planning: A revocable trust can include provisions that allow a designated trustee to manage your assets in the event of your incapacity. This can help avoid the need for a court-appointed guardian or conservator.
- Asset management: A revocable trust allows you to appoint a professional trustee to manage your assets, which can be beneficial if you lack the time, interest, or expertise to manage them yourself.
- Potential tax benefits: While a revocable trust generally does not provide significant tax benefits during your lifetime, it can be structured to minimize estate taxes for your beneficiaries, depending on your specific situation.
- Protection for beneficiaries: A revocable trust can provide protection for your beneficiaries, such as by including spendthrift provisions that prevent creditors from reaching a beneficiary’s interest in the trust.
Given the benefits outlined above, a living trust is easily the best option for you if you are seeking flexibility.
How Do You Set Up A Living Trust In North Carolina?
The process of setting up a living trust can be complicated. Understanding what goes into creating a living trust, along with working with an experienced legal partner who can make sure the trust aligns with your needs, can make the process much smoother.
Some things you can do in advance to make the process smoother can include the following:
- Inventory your assets: Make a comprehensive list of all your assets, including real estate, bank accounts, investments, retirement accounts, life insurance policies, vehicles, and valuable personal property. Note the estimated value of each asset and gather documentation, such as account statements, deeds, and titles.
- Identify your beneficiaries: Decide who you would like to receive your assets after your death. This may include family members, friends, or charitable organizations. Consider alternate beneficiaries in case your primary beneficiaries predecease you or are unable to inherit.
- Choose a trustee: The trustee is responsible for managing the trust according to your instructions. This person or entity should be trustworthy, responsible, and capable of managing financial matters. Consider who you want to serve as the initial trustee, as well as any successor trustees.
- Define your objectives: Consider your goals and objectives for creating the trust, such as avoiding probate, protecting assets, providing for minor children, or addressing concerns about your own incapacity. Be prepared to discuss these goals with your lawyer.
- Outline specific instructions: Think about any specific instructions you may want to include in your trust, such as when and how assets should be distributed to beneficiaries, or how assets should be used for their benefit (e.g., education, healthcare, or living expenses).
- Review existing estate planning documents: If you already have estate planning documents, such as a will or power of attorney, gather them for review. Your lawyer will need to consider these documents to ensure that your new living trust coordinates properly with your existing plan.
Taking the time to do this due diligence in advance can ensure that the resulting plan takes into account your preferences and protects your family and legacy.
Speak With Our North Carolina Trust Administration Lawyers
Setting up a living trust isn’t always easy. Still, by speaking with a North Carolina trust administration lawyer at Wilson Ratledge today, the process can and will become much easier and much more pleasant.
Get The Legal Help You Deserve When Facing Commercial Bankruptcy In North Carolina
Going through commercial bankruptcy in North Carolina is a trying time for any business. When starting a company, the end goal is not to have financial struggles but quite the opposite, to flourish and be successful. However, if bankruptcy is on the table, working with a commercial bankruptcy litigation lawyer at Wilson Ratledge can make the overall process much easier.
What Is Commercial Bankruptcy?
Commercial bankruptcy refers to a legal process that allows businesses in financial distress to reorganize, discharge, or repay their debts under the protection of the bankruptcy court. In the United States, the federal Bankruptcy Code governs bankruptcy proceedings, but state laws can also impact the process.
In North Carolina, as in other states, businesses can file for bankruptcy under several different chapters of the Bankruptcy Code, depending on their circumstances:
- Chapter 7: This is often referred to as “liquidation” bankruptcy. In this process, a trustee is appointed to sell the business’s non-exempt assets, and the proceeds are used to pay off creditors. Any remaining debts are usually discharged. Chapter 7 is typically used by businesses that cannot continue operating and have no feasible way to restructure their debts.
- Chapter 11: This is commonly known as “reorganization” bankruptcy. It allows businesses to restructure their debts while continuing to operate. The debtor proposes a plan to repay all or part of its debts over time, usually by modifying payment terms, interest rates, and other obligations. Creditors and the bankruptcy court must approve the reorganization plan. Chapter 11 is often used by larger businesses or those with complex debt structures.
- Chapter 13: This type of bankruptcy is typically used by individuals and sole proprietorships with regular income. It allows debtors to reorganize their debts and create a repayment plan that lasts three to five years. Like Chapter 11, the debtor’s proposed plan must be approved by creditors and the bankruptcy court.
What Are The Effects Of Commercial Bankruptcy?
Commercial bankruptcy can provide businesses with protection against certain actions by creditors. Once a business files for bankruptcy under any chapter, an “automatic stay” is typically put into effect. The automatic stay is a court order that temporarily halts most collection efforts and other legal actions against the debtor, including lawsuits, foreclosures, and repossessions.
The purpose of the automatic stay is to give the debtor breathing room to develop a plan to address their financial situation without the constant pressure from creditors.
It’s important to note, however, that the automatic stay does not stop all legal actions. Some exceptions to the automatic stay can include:
- Criminal proceedings: The automatic stay does not halt criminal prosecutions against the debtor or their business.
- Certain tax proceedings: The stay may not prevent some tax-related actions by government authorities, such as tax audits, deficiency notices, or tax liens.
- Domestic support obligations: The automatic stay does not apply to the collection of child support or alimony payments.
- Evictions: In some cases, the automatic stay may not prevent an eviction if the landlord has already obtained a judgment for possession before the bankruptcy filing or if the eviction is based on endangerment of property or the illegal use of controlled substances.
- Multiple bankruptcy filings: If the debtor has filed for bankruptcy multiple times within a certain time frame, the automatic stay may be limited in duration or may not apply at all.
Creditors can also request the bankruptcy court to lift the automatic stay under very specific circumstances, which your commercial bankruptcy attorney will discuss with you.
What Are The Long-Term Consequences Of Commercial Bankruptcy?
Commercial bankruptcy comes with several long-term consequences. Some of the most notable long-term consequences that commercial bankruptcy can engender are as follows:
- A bankruptcy will show up on your credit report.
- Obtaining a new business loan may be challenging due to the bankruptcy.
- Many of the business’ assets could be sold off, which would change the valuation and potential future prospects of your business.
- You may be forced to go through layoffs if the business’ finances are unable to support your current employees.
- Depending on the equity structure of your company, there is the potential for adverse effects from a funding standpoint with investors.
None of these consequences are desirable, as they affect you, the people who work for or with your business, as well as your ability to develop another business.
What Should You Do When Facing Commercial Bankruptcy In North Carolina?
No matter the circumstances that are underlying your commercial bankruptcy, in the state of North Carolina, there is one thing that you must do: have an experienced commercial bankruptcy litigation lawyer on your side.
Every commercial bankruptcy situation is unique and different. Working with the team at Wilson Ratledge can help you understand your options, and come up with a plan to give you the best short-term and long-term outcomes.
Our North Carolina Commercial Bankruptcy Lawyers Can Help
A commercial bankruptcy litigation lawyer can help you with every facet of commercial bankruptcy. Some of the most notable things a commercial bankruptcy litigation lawyer can assist you with are as follows:
- Determining whether or not commercial bankruptcy is the most appropriate option for your business.
- Going over the other options available to you outside of filing for commercial bankruptcy.
- Assessing which form of commercial bankruptcy you should consider and which one is right for you.
- Dealing with litigation that arises as a result of debt or filing for commercial bankruptcy.
- Reorganizing your business, and its assets, in accordance with current bankruptcy laws.
- Conducting the commercial bankruptcy process in a way that is efficient and effective.
Commercial bankruptcy is complex and difficult. The team at Wilson Ratledge can help you navigate the process. Contact us today to schedule a consultation!
What Can You Do If The IRS Has Revoked Your Passport Because Of A Tax Debt?
As a taxpayer, it is essential to remain compliant with the Internal Revenue Service (IRS) to avoid potential penalties or legal consequences. While many individuals might be aware of some tax-related consequences, not everyone knows that a significant tax debt or issue can lead to the revocation of their passport. This article will delve into the circumstances under which the IRS can revoke a passport and offer guidance for resolving tax issues.
The IRS and Passport Revocation
The IRS has the authority to revoke a passport under a provision of the Fixing America’s Surface Transportation (FAST) Act, which was enacted in December 2015. This law mandates the IRS to work in coordination with the State Department to deny, revoke, or limit the passport of any individual with a ‘seriously delinquent tax debt.’
What Constitutes a Seriously Delinquent Tax Debt?
A seriously delinquent tax debt is an individual’s unpaid, legally enforceable federal tax debt, including penalties and interest, totaling more than $59,000 (as of 2023, adjusted for inflation). The following conditions must also apply:
- A notice of federal tax lien has been filed, and all administrative remedies have been exhausted or lapsed.
- A levy has been issued by the IRS.
Exceptions and Exclusions
There are specific situations in which a taxpayer with a seriously delinquent tax debt might not face passport revocation:
- The taxpayer is in the process of disputing the tax liability in question through an IRS administrative appeal or in court.
- The taxpayer has requested innocent spouse relief under the IRS provisions.
- The tax debt is under consideration for an installment agreement, offer in compromise, or suspension of collection due to a collection due process hearing.
Moreover, passport revocation may not apply to taxpayers in a federally declared disaster area, victims of tax-related identity theft, those currently in bankruptcy, or those living in a combat zone.
How Does the Process Work?
If an individual meets the criteria for passport revocation, the IRS will send a certification of the seriously delinquent tax debt to the State Department. Before the certification, the IRS will mail a Notice CP508C to the taxpayer’s last known address, informing them of their tax debt and the possible passport consequences. The State Department may then revoke the passport or limit it to return travel to the United States.
Reversing the Revocation
To reverse the passport revocation, the taxpayer must resolve their tax debt through one of the following methods:
- Pay the tax debt in full.
- Enter into an installment agreement with the IRS.
- Settle the tax debt through an offer in compromise or another IRS-approved method.
- Request innocent spouse relief.
- Have the tax debt suspended due to a collection due process hearing or another valid reason.
Once the tax debt is resolved, the IRS will send a reversal certification to the State Department, typically within 30 days. The State Department will then reinstate the individual’s passport privileges.
Preventive Measures
To avoid the risk of passport revocation, it is crucial to stay proactive with your tax obligations. Here are some tips to help you stay compliant:
- File your taxes on time and accurately to avoid penalties and interest.
- If you cannot pay your tax debt in full, consider setting up an installment agreement or apply for an offer in compromise.
- Consult a tax professional or tax attorney if you have any concerns or require assistance in resolving tax issues.
Our Raleigh Tax Controversy Attorneys Can Help
While the IRS can revoke a passport due to a seriously delinquent tax debt, there are steps that taxpayers can take to prevent this from happening or to resolve their tax issues. By staying proactive and addressing any tax concerns with the assistance of a knowledgeable tax attorney, taxpayers can minimize the risk of passport revocation and navigate the complexities of tax compliance.
In cases where the revocation has already occurred, it is essential to act quickly and work closely with the IRS to settle the tax debt and reinstate passport privileges. By staying informed and taking appropriate measures, taxpayers can avoid the serious consequences of passport revocation and maintain their ability to travel internationally without restrictions.
Don’t let tax issues jeopardize your freedom to travel; contact the experienced tax attorneys at Wilson Ratledge today for expert guidance and personalized solutions to resolve your tax concerns. Let us help you protect your passport and your financial future.
What’s New for Extended Compensation
Less than two weeks after the North Carolina Court of Appeals made a decision in Sturdivant v. N.C. Dept. of Public Safety, which would have ultimately determined how claims for extended compensation were handled, the court’s opinion was withdrawn, without explanation.
However, on April 18, 2023, the North Carolina Court of Appeals filed a new decision in the case of first impression on extended compensation in North Carolina. Unfortunately, the Court of Appeals maintained that the term “total loss of wage-earning capacity” in the extended compensation (post-500 weeks) section of the statute is no different that the term “total disability” in the temporary total disability section of the statute. In doing so, the Court of Appeals added to its decision that the 2011 amendment to the Workers’ Compensation Act did not create a higher burden of proof in order for an employee to qualify for extended compensation. Instead, the Court of Appeals wrote, the standard of proof for an award of extended compensation is the very same standard of proof for an award of TTD benefits during the initial 500 week period. We believe (as did the Industrial Commission) that the Legislature intended the burden of proving extended disability to be significantly higher than the burden for ordinary TTD, and anticipate that the parties will seek review by the Supreme Court.
Our workers’ compensation defense attorneys will monitor Sturdivant for an appeal to the North Carolina Supreme Court, and a decision in the companion case, Betts v. N.C. Dep’t of Health & Hum. Ser., for any changes to the interpretation of “total loss of wage-earning capacity” in extended compensation cases.
We welcome any inquiries you may have about the Sturdivant decision or extended compensation in North Carolina.
Preparing for Your Pet’s Future With a North Carolina Pet Trust
North Carolina Law Has Provisions For You To Arrange Care For Your Pets As Part Of Your Estate Planning
People love their pets. To outsiders – particularly those who do not own pets – love may sometimes seem excessive. The fact remains, though, that there is a bond between pets and their owners. One of the essential parts of that bond is the obligation of the owner to provide care for the pets, which can’t provide for themselves. The owner provides love, food, and shelter in exchange for loyalty and companionship from the pets. So what happens to your pets when you die?
Fortunately, North Carolina law has provisions that make it easy to ensure that you can continue to provide proper care for your pets even after you are gone without relying upon someone’s promise that they will take care of things. Our estate planning attorneys at Wilson Ratledge explain more below.
North Carolina Lets You Take Legal Action In Your Will To Care For Your Pets When You No Longer Are There To Do So
In 1995, the North Carolina legislature passed a statute enabling pet owners to establish a testamentary trust to care for their pets after the owner has passed away. A testamentary trust is one established in your will that provides a governing structure intended for a particular purpose and funds it with a part of your estate to pay for whatever purpose the trust is designed to serve, which in this case would be the care of your pets. Under the statute, the trust is to benefit those pets of yours that are alive at the time of the establishment of the trust. However, you can work with your estate planner to update the trust to include any pets you obtained after the initial creation of the trust. The trust terminates once the last surviving animal covered under the trust passes away.
A trust for your pet is every bit as legally enforceable as any other trust, meaning the trustee you designate has a fiduciary obligation to adequately provide for the care of the pets identified in the trust. The trustee uses the money placed into the trust to pay for that care. That care can be as described explicitly in the trust as you like. You can identify particular veterinarians to provide medical care for the pets, how often the pets should be taken to the vet, a specific brand of pet food, or even the frequency of visits to the dog park. Your pet, your trust.
You can identify someone to serve as a trustee who is required to either provide care for the pets identified in the trust or arrange for that care. In either case, the trust pays for the maintenance of the covered pets for as long as they live, after which any funds remaining in the trust are distributed as directed in the trust document. During the course of the trust, no principal placed in the trust, nor investment income earned by the trust, can be used by the trustee or for any other purpose other than the care of the designated pets that are the beneficiaries of the trust.
If you don’t designate a person to manage the trust, the clerk of the superior court with jurisdiction over the trust can do so upon the application of “a person.” Given that vagary, it is probably best to designate someone you know who will properly care for your pets. You need to ensure that the person you designate is willing to serve and will be able to do so when the time comes, or else the clerk of the superior court will appoint a different trustee.
Work Closely With Your Estate Planner On Your Pet Trust
Your pet trust can include as much specificity as you like. You need to make clear to your estate planner exactly what you want to accomplish with the trust. If you wish for a particular pet food to be given to your pets, or daily dog park visits, you better tell your estate planner. Telling the person you designate as trustee is not legally enforceable. On the other hand, it might not be wise to make serving as a trustee too burdensome. You need to talk to the person you plan to designate as a trustee to ensure that person is willing to do what the trust requires.
You also need to communicate clearly to your estate planner what pets are to be covered by the trust. In case you might outlive the pets originally covered by the trust and get more pets, be sure to have your estate planner draft the trust to include any pets you acquire later. Otherwise, those pets will not be covered.
If You Want To Establish A Pet Care Trust, Talk To The Estate Planning Attorneys of Wilson Ratledge
While many people might think it a little silly to provide for the care of your pets via a trust in your will, in reality, it is both quite responsible and can be a source of peace of mind knowing that your pets will be cared for according to your wishes when you pass away. The estate planning attorneys of Wilson Ratledge can help you with that endeavor and any other estate-planning matters. Contact us today. Our knowledge and experience regarding estate planning will help you easily navigate the process.