The purpose of this blog post is to inform you of two realities: first, if you own any property – a car, a house, or a bank account – or if you have a retirement plan or life insurance policy, then you have an “Estate.” Second, if you are a resident of North Carolina (or practically any other state for that matter), then you have a default “Plan” established by the State.

Your choice is whether you want to direct where and how your property is used after your death, or whether you prefer to leave the process to the one-size-fits-all default rules. This is what we refer to as Estate Planning – and it has a very real application in all of our lives.

For example, like myself, many clients of mine are parents of young families.  Most younger families are in the relatively early stages of saving for retirement, funding college funds, and generally accumulating wealth. Notwithstanding their financial status, Estate Planning can have a substantial long and short-term impact on their children’s wellbeing in the event of tragedy. With proper Estate Planning, parents can achieve the following critical objectives in addition to a multitude of other goals:

• Guardian Appointments: Parents can recommend a guardian of their children in a Will, and North Carolina law accords “substantial weight” to the guardianship recommendation. Without this critical recommendation, the Clerk of Court is left to make a guardianship determination that is in the best interest of the children without the benefit of what would otherwise be the single biggest determining factor.

• Protecting Assets for Children: Parents can pay their estate, including life insurance proceeds, retirement benefits and other assets into a Trust created under their Wills. In addition to other advantages, with a Trust these assets can be: (1) managed by a trustee of the parents choosing without unnecessary court oversight and expense, (2) used for purposes designated by the parents, and (3) paid to each child once reaching a suitable age (25 or 30, for example). Without the use of Trusts under the parents Wills, these assets can be subject to onerous court oversight and associated costs, and in any event will be paid to each child upon turning 18 years of age – an age at which few are prepared to responsibly handle money needed to fund education and support for several additional years.

If you would like to discuss other advantages or the specifics of your situation, please give me a call at (980) 228-9750. I look forward to hearing from you!

Every business entity in North Carolina is required to file an Annual Report with the Department of the Secretary of State.  Annual Reports, along with a fee, are due on April 15^th of each year.  The failure of a business to timely file its Annual Report will lead to Administrative Dissolution of the entity.  Following an Administrative Dissolution, a business is no longer empowered or authorized to conduct business except to the limited extent necessary to wind up its affairs and distribute the assets to creditors and owners.  A business owner that continues the regular affairs of the business following an Administrative Dissolution likely does so without the limited liability protection afforded an entity in good standing.  This places the owner’s personal assets within the reach of the business’s creditors.  Additionally, an Administrative Dissolution is almost certainly a default under any debt covenants or valuable contracts a business may have which jeopardizes the operations of the business.

Many Certified Public Accountants file a business’s Annual Reports along with the business’s income tax compliance, however, this is not a universal practice, and every business should assure this has been filed for the current year, or is filed within sixty (60) days of the deadline to avoid the commencement of the Administrative Dissolution Process by the North Carolina Secretary of State.

One final note on Annual Reports – for my dental and other professional clients, a professional entity (PLLC, PA, PC) is not required to file Annual Reports.  As such, you can disregard the foregoing discussion; however, be sure that the Registered Agent and Registered Address you named in your original Articles of Organization or Articles of Incorporation remain up to date.  This is easy to forget since you do not annually revisit this information as part of the Annual Report process.

If would like to discuss your Annual Report, or if your business has been Administratively Dissolved and you would like to further discuss your options, please call me at (980) 228-9750 to schedule an appointment.