A Legal Blog Sponsored By The Maitland Law Firm - www.Maitlandlaw.com

Monday, October 20, 2014

Gay Marriage- Make sure to update your deeds and wills!

Congratulations to gay couples who now can enjoy full legal recognition of their married status!

One of the most powerful tools under North Carolina real estate law is to hold property by Tenancy by the Entirety. This is only available to married couples and thus was unavailable to gay couples until just recently! We recommend strongly that all existing deeds be updated to reflect the language "Married, Tenancy by the Entirety" for all married couples. See a more detailed explanation below.

Similarly, we recommend that all gay married couples update their wills and estate planning documents immediately to reflect their proper married status. Certain advantages and privileges are reserved only to spouses under North Carolina law. UPDATING YOUR DOCUMENTS IS ESSENTIAL!

Here is a quick primer on TBTE:
Tenancy by the Entirety is a type of concurrent estate in real property held by a married couple whereby each owns the undivided whole of the property, coupled with the Right of Survivorship, so that upon the death of one, the survivor is entitled to the decedent's share.
A Tenancy by the Entirety allows spouses to own property together as a single legal entity. Under a tenancy by the entirety, creditors of an individual spouse may not attach and sell the interest of a debtor spouse: only creditors of the couple may attach and sell the interest in the property owned by tenancy by the entirety.
There are three types of concurrent ownership, or ownership of property by two or more persons: tenancy by the entirety, Joint Tenancy, and Tenancy in Common. A tenancy by the entirety can be created only by married persons. A married couple may choose to create a joint tenancy or a tenancy in common. In most states a married couple is presumed to take title to property as tenants by the entirety, unless the deed or conveyancing document states otherwise.
The most important difference between a tenancy by the entirety and a joint tenancy or tenancy in common is that a tenant by the entirety may not sell or give away his interest in the property without the consent of the other tenant. Upon the death of one of the spouses, the deceased spouse's interest in the property devolves to the surviving spouse, and not to other heirs of the deceased spouse. This is called the right of survivorship.
Tenants in common do not have a right of survivorship. In a tenancy in common, persons may sell or give away their ownership interest. Joint tenants do have a right of survivorship, but a joint tenant may sell or give away her interest in the property. If a joint tenant sells her interest in a joint tenancy, the tenancy becomes a tenancy in common, and no tenant has a right of survivorship. A tenancy by the entirety cannot be reduced to a joint tenancy or tenancy in common by a conveyance of property. Generally, the couple must Divorce, obtain an Annulment, or agree to amend the title to the property to extinguish a tenancy by the entirety.

Thursday, August 28, 2014

Did the Court Get this Decision Right? Copying to Attorney Does NOT Make an Email Privileged

A recent federal court decision appears to attempt to limit the application of the attorney-client privilege to email communications. Should sensitive emails between management personnel in anticipation of potential litigation against a "problem" employee, appropriately copied to the company's in-house attorney, be protected by attorney-client privilege? HELD- NO! Although the court held that emails directly addressed to the attorney seeking legal advice were protected, emails between the co-workers regarding the employee's misconduct were not protected by privilege or work product, even though the purpose of the emails was to build a file for potential litigation. You can read a full discussion of the case here: Hamdan- Copying Attorney not Sufficient to Protect 

Do you think the court got this decision right? Or does it ignore the modern reality of workplace communication being dominated by emails? Going forward, how can supervisors document their concerns and discuss alternatives without subjecting themselves to discovery requests from plaintiffs?

These concerns and questions highlight the value of involving the Maitland Law Firm early in your business or personal legal needs. Many times a few minutes speaking with us can save you many hours of headaches. Let us help you avoid potential pitfalls! Thanks, Rob Maitland

Wednesday, April 30, 2014

Donald Sterling Controversy: Proving Once Again Life is Stranger than Fiction, but are the NBA's actions legal?

Here's an interesting article on the Donald Sterling controversy from the General Counsel magazine.

An intriguing sub plot is the theory that Magic Johnson engineered the controversy to force Sterling (a well known racist and idiot) to sell the Clippers to Magic's same billionaire group that owns the Dodgers.

Rob Maitland 

Are Actions Against Clippers Owner Legal?

April 30, 2014
Responding to the public release of a recording of Los Angeles Clippers owner Donald Sterling making racist comments, NBA Commissioner Adam Silver yesterday announced a number of actions the league will take against Sterling, including a lifetime ban. Now experts are examining the legality of the full spectrum of sanctions: A lifetime ban, both from the Clippers and the NBA generally, and a $2.5 million fine. Silver is also urging the owners vote to force Sterling to sell  the team.
The NBA’s constitution appears to make the ban, and the fine, legal, as Silver’s decision in the matter has the effect of a binding arbitration decision. But voting to force Sterling to sell the Clippers – which would require a vote of three-fourths of the league’s owners – is murkier legal territory. The league constitution opens the door for owners who “willfully” violate its provisions to have their interest in a franchise terminated, though it’s most often understood within the context of financial breaches, like failing to pay bills or gambling on NBA games. However, a general requirement of ethical conduct in business dealings and contracts may be cited as legal grounds for the move. And with many sponsors ending their deals with the Clippers, and players threatening to strike, an argument could be made Sterling’s continued association with the team would be damaging financially and to labor relations.
While Silver said April 29 that he is confident enough owners will vote to oust Sterling, sports attorney Michael McCann writes for Sports Illustrated that there is likely to be discussion among those voting, based on four major concerns: The Clippers are financially viable; though Sterling has been outed as a bigot, the organization does not have a history of discrimination; the lack of a “morals” clause in the NBA constitution; and the fear of setting a worrisome precedent. There is no timeline to take a vote.
Many expect a legal battle that raises breach of contract and antitrust claims, as Sterling, an attorney, has proven to be one of the most litigious major sports teams owners. But it’s not clear that would make business sense. If Sterling maintained ownership, it might tank under the weight of his own bad PR. Gary R. Roberts, professor of sports law at Indiana University, told theWashington Post, “I don’t think that the other league owners are going to be able legally to kick him out. But they’re not going to have to. This guy doesn’t want to own a business that will be bankrupt in short order.”

Wednesday, April 23, 2014

Sole Proprietorships and General Partnerships: The "Original" Business Entities

Starting a business can be a very exciting time and it can also prove to be stressful as the task of procuring new clients and transitioning your idea into profits can take some time to come to fruition. However, there are initial steps that should be considered by every entrepreneur when embarking on the exciting endeavor of beginning a new business.  Considering traditional businesses, I wanted to explore two business types:  Sole Proprietorship and General Partnership.

The default classification of one individual that starts a business would be Sole Proprietorship.  Sole Proprietorship does not involve any document filings with the Secretary of State.  If two or more individuals start a business it is considered a General Partnership.  The assets and liabilities absent any agreement are assumed to be split equally amongst each partner.  However, the down fall to each of these entities would be that should there be any liability each individual would be liable for the entire amount of the debt.  In the eyes of the law, for both of these businesses, the individual and the business is considered one in the same.

A primary disadvantage of Sole Proprietorships and General Partnerships is joint and severable liability.  This means that should there be any debt or law suit judgment that is against the business, each individual will be liable personally for the debt or judgment.  Should the assets of the business not be sufficient to satisfy the judgment, the party that is owed the debt or judgment has rights to seek satisfaction against the personal assets of any party associated with the business.  Therefore, it is advised to speak with our firm when considering starting a business to decide which entity is right for you.  Not every business will need to file to be an Limited Liability Company, Corporation, Professional Limited Liability Company, but knowing when to file to have that additional level of protection and security is essential knowledge.

For more information contact The Maitland Law Firm at 919-265-0800. 

Thursday, April 10, 2014

Education Trusts: A Unique Way to Plan for Higher Education

An Education Trust is a trust established for the exclusive purpose of financing the ever increasing costs of higher education.

Education Trusts can be great planning tools for anyone looking to provide funding for the education of loved ones and are typically used by grandparents, parents or others who are looking to assist with these costs.  They are a great way to build a meaningful asset over time using monies which might have gone for far less important gifts for holidays, birthdays and special occasions. 

  • Education trusts allow great flexibility in regards to how the trust funds are used.  For example, you can make the trust as restrictive or as broad as you would like.  You can even specify the types of educational institutions that trust funds can be used for.
  • You can name as many or as few beneficiaries in one education trust as you would like.  You can also differentiate between the amounts received by named beneficiaries.
  • Education trusts are a great way to take advantage of $14,000 annual gift tax exclusions. 
  • You can contribute a variety of assets to an education trust including, but not limited to, cash, real property, stocks and other investments.
  • You can ensure a legacy for your family by ensuring that the people you love most have the means to pay for a higher education.

For more information on how you and your family can benefit from this approach to education financing, call Michele English at 919-265-0800.

Wednesday, April 9, 2014

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

We had a client inquire today regarding the tax implications of their bank forgiving the deficiency amount owed after a foreclosure sale.  The bank issued a 1099 of over $100,000.00 in "income" the client must report. 

Does the client need to pay income tax on that "income"?  Depends on whether the property was her primary residence and other factors.  Be sure to engage a CPA, attorney or other tax professional for problems like these.  Attached is an interesting primer.

Tuesday, April 8, 2014

Registered Agents, Your Personal Representative for your Business

When registering your business with the Secretary of State, you are required to identify a Registered Agent.  The requirement for the registered agent is set out via NC General Statute and is as follows:

  • Must be an individual who resides in this state and whose business office is identical with the registered office;
  • A domestic corporation, non-profit corporation or LLC whose business office is identical with the registered office; or
  • A foreign corporation, foreign non-profit or foreign LLC authorized to transact business or conduct affairs within the state whose business office is identical with the registered office.

Start-ups and smaller businesses that maybe have home offices value the service of the Registered Agent because it allows them to use a different address than their home address.  The address on file must be of actual office or residence, as Post Office Box addresses are not allowed to be used for the address of the Registered Agent.

The sole responsibility of the registered agent is to forward to the business that it represents any and all notice, process or demand that is served on the business via the Registered Agent.  Many entities find comfort in this being at another address because they may overlook certain documentation if sent to their office address due to them being in the business of making their business profitable. 

For more information on this topic and to discuss other business law questions, contact The Maitland Law Firm to schedule a consultation at 919-265-0800.

Tuesday, April 1, 2014

Operating Agreements, the Guiding Handbook for LLCs

Many business owners often times feel that the filing of the Articles of Organization is the final step to formalizing their business entity.  There is the additional step that is suggested to formalize the rules that will govern the relationships between individuals within the entity and also how to manage the affairs of the business.  This can be accomplished through the organization’s Operating Agreement.

Operating Agreements are used by Limited Liability Companies (LLC) that serve as an agreement between the members of the LLC and when combined with the Articles of Organization provide for the governing of the entity.  The Operating Agreement should be drafted to contain such provisions that include, but not limited to:
  • Relations among members and other members and their defined rights within the LLC;
  • Rights and duties of a person acting in the capacity of a manager;
  • Activities of the company and the conduct of those activities; and
  • Means and conditions for amending the Operating Agreement.

It should be noted that any person who becomes a member of any LLC is deemed to assent to the Operating Agreement.  The Operating Agreement does not have to be filed with the Secretary of State in conjunction with your Articles of Organization.  However, when there are multiple individuals involved within the business venture, it is wise to have a general understanding of the governing provisions of the entity when filing the Articles of Organization.  

If you would like to have your Operating Agreement drafted, amended or reviewed do not hesitate to give the legal team a call at The Maitland Law Firm.

For more information call Brad Hicks at 919-265-0800. 

Thursday, March 20, 2014

Meet Michele English of Maitland Law

Michele English’s practice is focused in the areas of wills, trusts, and estates; taxation; elder law; family law; and real estate law. She is licensed and admitted to the North Carolina State Bar.  She is also admitted to practice in the United States Tax Court.  Michele is a member of the Orange County Bar Association and the Judicial District 15B Bar Association.

Michele received a Master of Laws In Taxation (LLM) degree from The University of Florida Fredric G. Levin College of Law in Gainesville, FL, her J.D., cum laude, from Florida A&M University College of Law in Orlando, FL, and a B.A. in English, cum laude, from Coastal Carolina University in Conway, SC.

Outside of work, Michele enjoys spending time with her husband and three sons and volunteering for community projects. She has served as an assistant coach and team mom for both little league baseball and youth soccer.  Michele also took on the role of Playground Planning Committee Member and Playground Builder for one of Disney’s Kaboom projects in Orlando, FL.  Michele currently serves as social coordinator for her neighborhood community association.

Annual Reports: An Essential but Often Overlooked Business Filing

This time of year many individuals are focused on the April 15th deadline for the purpose of filing their individual and business income taxes.  However, for registered corporations and limited liability companies, this date is representative of the Annual Report filing deadline required by the North Carolina Secretary of State.

The Maitland Law Firm provides efficient and timely filing assistance for businesses that need help in filing annual documents with the NC Secretary of State's office.  We understand the numerous responsibilities of owning your own business present to you and we want to assist in taking some of that burden away by offering our service to with the goal for you to remain focused on the operations of your business.

There are six essential items that are required to be included within your Annual Report.  The most important step is to realize there is a statutory requirement to submit the Annual Report each year. Regarding the information contained in the document, you are required to document any changes that your business has experienced including, but not limited to: updated address, registered agent, notification of new entity members (LLC) or board members (corporation).

There are four entities not required to file annual reports which include: Professional Corporations, Professional Limited Liability Companies, Limited Partnerships and Non-Profit Entities.

So remember, in addition to the changing of seasons and the filing of tax documents before the April 15th deadline; the spring also represents a time when individuals must remember to file annual reports with the Secretary of State to ensure their limited liability company and/or corporations do not become subject to administrative dissolution.

For more information, call Brad Hicks at 919-265-0800. 

Tuesday, March 18, 2014

Congratulations to Coach Larry and Christin Fedora on the purchase of their new home in Southern Village! Four true Tar Heels in this picture! Thanks to The Robby Oakes Group - Corporate Investors Mortgage Group. for this special day. GO HEELS!