Federal Gift and Estate Tax Planning- Part 4 of 7: Advanced Planning with GRATs

Freezing and Reducing your Taxable Estate with Grantor Retained Annuity Trusts (GRATs) Likely the most effective and popular advanced planning techniques are the use of a Grantor Retained Annuity Trust (“GRAT”) or an Intentionally Defective Grantor Trust (“IDGT”).  The general idea of both techniques is to transfer assets expected to appreciate in an amount that exceeds the current month’s Applicable Federal Rate or Section 7520 (120% of the AFR) rate and pass the excess growth to non-charitable beneficiaries, all while using little or none of the individual’s basic exclusion. In this part, I will discuss GRATs, which are likely the … Continue reading

South Carolina Legislature Considering Two HOA Bills

Two bills, one dealing with the foreclosure process for homeowners associations and one dealing with HAM radios, have received attention from the South Carolina House of Representatives in the past weeks and are gaining momentum. On March 26, 2024, a subcommittee hearing took place at which both bills were considered. Here is some information about each: H.4549   (Amateur Radio Antenna Protection Act). This bill has had a number of Representatives add their names to the sponsorship of the bill, which is usually a sign that the bill has positive momentum. This bill may require all HOAs (which may include … Continue reading

Jim Slaughter Receives Lifetime Contribution Award for Association Work

Law Firm Carolinas’ partner Jim Slaughter received the Don Buck Lifetime Contribution Award at the recent 2024 Community Association Law Seminar in Las Vegas. The award recognizes attorneys who have demonstrated exceptional commitment to the community association industry. Jim is a past President of the national College of Community Association Lawyers as well as the North Carolina Chapter of the Community Associations Institute. He has written four books on association meeting procedure, including the recent Robert’s Rules of Order Fast Track. Here’s a recent announcement from the Community Associations Institute on the Award. Jim Slaughter presented with the Don Buck … Continue reading

Federal Gift and Estate Tax Planning- Part 3 of 7: Advanced Planning with ILITs

Creating and Irrevocable Life Insurance Trust aka ILIT The first advance planning technique I will discuss in this series of blogs and one of the simplest strategies is to have a life insurance policy held by an Irrevocable Life Insurance Trust aka an “ILIT.”  While this strategy does not reduce the size of an individual’s taxable estate or estate taxes per se, it creates untaxed liquidity outside of their taxable estate to pay the taxes which may be due on the individual’s taxable estate. One question clients may have is why holding life insurance individually does not serve this same … Continue reading

Federal Gift and Estate Tax Planning- Part 2 of 7: Leveraging the Basic and Annual Exclusions

Maximizing Your Basic Exclusion The primary reason the vast majority of North Carolinians avoid estate tax is by simply using their basic gift and estate tax exclusion which is historically high. The 2024 amount is $13,610,000 per individual and $27,220,000 for a married couple who elects portability.  Although some individuals may accomplish this without any planning, if an individual has a large estate, even if it is currently below the basic exclusion, there is simple planning which can leverage their basic exclusion. This leverage is due to the future growth of the gifted assets becoming removed from an individual’s taxable … Continue reading

Federal Gift and Estate Tax Planning- Part 1 of 7: The Unlimited Marital and Charitable Deductions

As discussed in prior blogs, North Carolina does not assess an estate or inheritance tax and the federal unified gift and estate tax exclusion as of 2024 is $13,610,000 per individual and $27,220,000 for a married couple who elects portability. Accordingly, the vast majority of North Carolinians do not have taxable estates. However, with the exclusion scheduled to sunset on January 1, 2026, and thereafter be greatly reduced to affect many more North Carolinians, I’d like to provide a summary of the most effective and popular strategies to reduce or eliminate gift and estate taxes.  In part 1, I will … Continue reading

NC Community Association Legislative Update – February 28, 2024

House Select Committee on Homeowners’ Associations Issues Final Report Today (Wednesday, February 28) was the fourth and final meeting of the NC House Select Committee on Homeowners’ Associations. As a reminder, this Committee was created by House Bill 311 (see NC Community Association Legislative Update – May 9, 2023) and tasked with examining planned communities and condominium associations, including: The Committee was instructed to provide a final report to the General Assembly on its study, including any proposed legislation, on or before March 1, 2024, which it did through a 27-page report with eight main legislative recommendations. Law Firm Carolinas … Continue reading

When Is an HOA/Condo Rental Amendment Unreasonable?

When it comes to declaration amendments, our firm is most often asked about restrictions on rentals, whether complete or percentage bans, restrictions on short-term rentals, or limiting corporate rentals. (See HOA/Condo Rental Restrictions, Corporate Owners & Institutional Investors and Short-Term Rentals in North Carolina and South Carolina HOAs and Condominiums) In a decision issued this week (February 21, 2024), the North Carolina Court of Appeals struck down a condominium rental amendment as unreasonable. While not really creating any new law, associations considering a declaration amendment, particularly as to rental restrictions, should be aware of the case. Mileview LLC et al … Continue reading

The Developer is Offering the Association (a lot of) Money to Sign a Release- Should the Board of Directors Consider Signing it?

Over the last year our firm has seen an uptick in offers to associations from the developer to pay money in exchange for signing a release. The language of releases can vary but the purpose is almost always the same – The money being offered to the association is in exchange for releasing the developer and any other named parties from any and all claims, known or unknown, that the association may have.  These claims being released will almost certainly include claims for construction defects for the association’s amenities but can also include a release for claims related to the … Continue reading

Why the Chair Never Asks “Is There Any Old Business?” (HINT: Because There’s No Such Thing)

At some point in some board meeting, you’re like to hear a presiding officer ask, “Is there any Old Business?” and wait for a reply. It’s intended as an opportunity for members to raise issue that were addressed at an earlier meeting. The problem with this question is twofold: THERE’S NO SUCH THING AS “OLD BUSINESS“ Whether your parliamentary authority is Robert’s Rules of Order Newly Revised (12th Edition) or some other parliamentary manual, there’s no category of business named “Old Business.” The proper term for business that carries over from the prior meeting is “Unfinished Business.” The difference is … Continue reading

Five Factors a Court Will Likely Consider to Determine Validity and Enforceability of Amendments Recorded by Developers

The 2006 Court of Appeals case of Queens Grant II Horizontal Property Regime vs. Greenwood Development Corporation (368 S.C. 342) provides guidance for validity of amendments to the Declaration/Master Deed (Declaration) recorded by Developers/Declarants (Developer). In this case the homeowner’s association sued the Developer over the validity of an amendment it recorded to the Declaration that increased assessments. The Court upheld the amendment (except for a few units that had a special arrangement that are not relevant to this blog).  The Court used the following general analysis to determine the validity of this amendment recorded by the Declarant:  Please contact … Continue reading

Divorce for Seniors

Recent studies have revealed that divorce is no longer for the young. Couples that are over the age of 50, even over 60 and beyond, are now divorcing at an ever-increasing rate. Issues that arise in a separation and divorce for those that have been married for over 30 sometimes 40 years are often times different than the issues for people that have been married for less than 20 years. Depending on the stage of the marriage, at Law Firm Carolinas our board-certified family law attorneys, Carole R. Albright and T. Keith Black, and our associate attorneys, John Boschini and … Continue reading

Why Do I Have to Pay Child Support if I Can’t See My Child?

One of the most common questions I receive as a family law attorney is: “The mother/father of my child isn’t letting me see them, so why do I have to pay child support?” In North Carolina, as in many other states, child support is a separate issue from custody arrangements. It’s not uncommon for one parent to withhold custody from the other, leaving many wondering why child support payments are still required in such circumstances. In this blog post, I will explore the legal perspective in North Carolina and shed light on why child support obligations persist even when custody … Continue reading

Effect of Separation and Divorce on Estate Planning in NC

If you and your spouse are separated or you have recently divorced, this blog will summarize the relevant North Carolina statutes.         Separation and Estate Planning A separation alone has no legal effect on your estate plan.  If you and your spouse have executed a separation agreement, it will likely have reciprocal renunciations of statutory spousal rights such as the Year’s Allowance, Intestate Succession, and the Elective Share.  These spousal rights exist regardless of whether your Will or Trust includes your spouse. As my Wills and Trusts professor always said, “you can’t disinherit your spouse in North Carolina.”  Without a … Continue reading

Association Not Liable for Volunteer’s Actions in Pool Incident

In a recent case heard by the Illinois Court of Appeals, Muhs v. Fox Point Homeowners Association (the “Association”), the Appellate Court of Illinois ruled in favor of a homeowners association, stating that the association was not liable for the actions of a volunteer committee member. Doreen Colletti Muhs (the “Homeowner”) sued Fox Point Homeowners Association (the “Association”) and Stacy Boyum for injuries she sustained during a party on Fox Point’s premises when Boyum knocked the Homeowner to the ground while trying to encourage her and other party guests to jump into the pool.  Boyum was one of three volunteers … Continue reading

Association Common Area Can Be Foreclosed and Sold to a Third Party for Unpaid Property Tax

Our office has had two situations in the last six months where an association failed to pay property taxes on association common area, the tax department foreclosed, and a third-party bought the common area at the tax foreclosure sale. Fortunately in these cases it was not the association pool or clubhouse, but it could have been. For North Carolina associations – There is a statue in North Carolina that allows associations to apply for a tax exempt status for common area. Once approved the association does not owe property taxes on that common area going forward. The key is to make … Continue reading

Taylor Swift and Robert’s Rules?

What do Taylor Swift and Robert’s Rules of Order have in common? Likely not much. However, both were highlighted in the “Top Ten 2023 Outlook Stories” from The Presbyterian Outlook, the magazine of the Presbyterian Church (USA). “What Taylor Swift’s Eras Tour Taught Me about Church” made the list. So did “Who Was Robert and Why Do His Rules Rule?” If you’re curious, the list and full articles can be found at Top 10 Outlook Stories of 2023. Want to learn more about Robert’s Rules of Order and proper meeting procedure? Then check out my two most recent books! Both … Continue reading

HOA/Condo Op-Ed Article Published Today

I was asked by The Charlotte Observer and Raleigh News & Observer to respond to recent reporting looking at changing North Carolina’s HOA/condo laws. My article, “Caution: When NC HOA Laws Change, Property Values and More Are at Stake,” appears in both newspapers today. If you are a subscriber, links to both are below and the full op-ed follows. Caution: When NC HOA Laws Change, Property Values and More Are at Stake Living in a community where owners agree to abide by rules that enhance benefits for everyone requires  balancing individual rights with neighbors. Legislators have historically balanced those effectively. Substantially increasing … Continue reading

What Is a Variance?

Last year I wrote a blog discussing the role of a Board of Adjustment and the types of cases they may hear, which can be found here. One of the land use cases that the Board of Adjustment in a municipality would see regularly would be a request for a variance. Variances are covered under NCGS § 160D of the North Carolina General Statues.  Specifically: NCGS 160D-705(d) states: When unnecessary hardships would result from carrying out the strict letter of a zoning regulation, the board of adjustment shall vary any of the provisions of the zoning regulation upon a showing … Continue reading

Harmony Taylor Recognition

Law Firm Carolinas’ partner Harmony Taylor is on a roll! Harmony has been named a Fellow in CAI’s College of Community Association Lawyers. The College, which was created in 1994, recognizes excellence in the practice of community association law. Of the thousands of attorneys who work with homeowner and condominium associations in the US, there are fewer than 200 current CCAL Fellows. As a past national CCAL President, I can say without reservation that Harmony reflects the high standards of professionalism, professional involvement, and passion for community association law the CCAL designation was created to spotlight.​ Harmony has also been elected Chair of … Continue reading