Coming up on this edition of Judica County Radio, your host, Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm, the power behind this program. They're practicing attorneys here in North Carolina. We get into some legal questions. Here's one: I own a small business and signed a contract with a vendor. But it is in my personal name, not the LLC.
Now the deal went bad and they're threatening to sue. We'll talk about that. We have a contract that says any disputes go to mediation first. This is another question. But the other side just filed a lawsuit anyway.
Do we have to go through mediation? That's the start of the show. Again, a couple of questions, we'll get into more. That's coming up next on Judica County Radio. Whitaker and Hamer presents Judica County.
With Joshua Whitaker and Joseph Hamer. Welcome to Judica County Radio, hosted by Josh Whitaker and Joe Hamer. They're the managing partners at Whitaker and Hamer Law Firm, and they're practicing attorneys here in our great state of North Carolina. They've placed offices everywhere, right here in the Cap City Raleigh. We got Garner, Cleveland, Clayton, Goldsboro, PewQuave Arena, down near Charlotte in Gastonia, and down at the coast, Moorhead City.
I'm Morgan Patrick. Pleasure to jump on with the attorneys. There's going to be an opportunity for a complimentary consult with the firm in and around estate planning. And the other category is: if you've been in a recent car accident, you don't know how to proceed, grab a consult and you can do that at any time during the show. 919-7727000.
That's 919-7727000. Or visit the website, WHO. Before we dive in, we ask always: how was the week? Josh. Morgan, the week's been good.
The um I just a disclaimer. This is not a s this is not a sports talk. Radio show. Why, does it sound sporty when I come in like that? No, no, no, no.
I'm just prefacing. You ask how the the week went. Me and my boys, we were. We've had a very tense couple of weeks because NC State basketball went through a coaching search. an hour in the portal period.
And it's a very nerve-wracking time if you're a college basketball fan. Yeah, you went through the same thing, Morgan, right?
South Carolina. Oh, yeah. And apparently, we've got a European pipeline going on over there in Chattel. That's good. You didn't have to go through a coaching search.
You guys are college basketball fans? No. I gave that up. I gave that up a long time ago. But like a month ago.
You know, it's it's it's crazy to me 'cause my my boys have been watching the The sites that give you news, and this recruit met with this coach, and this. recruits a hard lien or here's a crystal ball. projection because they really want to know what the basketball team is going to look like next year. And it's just crazy to me that we got here, right? And You know, it all comes from this NIL money and and And it's it's not like a budgeted Item.
It's all donations. Mm-hmm. Right. And a lot of these kids are making more than they can make in the pros. And it's just crazy to me.
I was just sitting down yesterday and was thinking about how, you know, when I was their age. You didn't have any recruiting news. Think about how much money you could have had, though, NIL money. All the schools that were recruiting you. You're an incredible super athlete.
But I was telling I remember being at state like I was at state And then we went to the first game. I didn't know who any of the players were. Right? If they were there last year, I didn't know who they were, but new players. Right, I didn't like if there was a transfer, I was like, who is that guy?
Where did he come from? There's no information, you know. Um And now, like, they know, like, hey, the eighth highest-rated center in the portal is visiting this. college today and he's expecting this amount of NIL money. It's just amazing to me.
This is going nowhere. This was, it's just amazing to me that this is where we're at. Right. It's instantaneous information that you can get. And back in the day, Late 90s.
If you guys remember the poop sheet, David Glenn put that out for a number of years, but I mean, he did that anonymously. He had so many people around the ACC reporting. Without their name on it, and the ACC early on did not recognize the poop sheet as a legit. Uh journalistic. entity Uh that changed later on, but uh he would get information Um And be able to write about it in the poop sheet.
So it was more recruiting stuff, and you'd find out where the high school kids are going.
Now, Now it's just off the chain, and it's almost like you remember maybe 15, 20 years ago when Major League Baseball went crazy and the Yankees just started spending so much money to put their roster together?
Now we're going to start to judge college basketball teams by the amount of money they're spending on their starting whatever's, they're seven or eight deep. And if they don't get to the Sweet 16 or the Elite Eight or the Final Four, and they spend $14, $15, $20 million, whatever it is. You know, we'll be ranking them or judging them by that. But it's amazing to think that there's no unity, there's no I mean, you throw these guys together, you're hoping for one good year, and it really is going to take You know, a solid coach to bring that all together.
Well, there's got to be a cap, right? I mean, it's got to be. Eventually you gotta have a cap or like a penalty for going over a certain amount or uh I guess there's no one right now who can enforce that, right? The NCAA can't enforce squat diddly, so it's just the wild, wild.
Well, and the minute they start throwing rules around, there's going to be a lawsuit because they've been the wild, wild west. It's going to take a while to kind of get things.
Somewhat under control, but yeah, it's. There's a lot of money out there, and Joe's over there kind of, he's not smirking, he's not commenting, but you know, a team like the Blue Devils. I mean, we don't know how much they have. And they're also getting guys that just want to go to Duke.
So they're getting their choice of the kids coming out of high school. They're also getting. You know, the portal looks, I mean, they're they're they're in a sweet spot. I'm uh you know, I stopped watching college basketball, don't really Consider it a real sport, but uh, uh, because I'm all about the purity of collegiate athletics, so I watch a lot of women's volleyball, that's pretty untouched by the NIL. Um Still a lot of Scholar athletes.
competing hard. It's just weird, man. It's a weird it's a weird landscape. Who knows what it's gonna look like? It's a rapidly changing landscape.
Uh It's hard to get invested in your team the same way. We still do it, right? But it's more difficult. There was There was somebody, I can't remember the gentleman's name, but he wrote an article and he was talking about Campbell. I have a lot of love for the Campbell Camels.
having gone to law school there. But, you know, they had hired an up-and-coming assistant coach to be their head coach, and he left. Because he didn't think Campbell had the basically what it seems like is they didn't they weren't spending enough on basketball to be so where so he was anyway, I think a lot of teams are just gonna opt not that Campbell's opting out, but I think a lot of teams are just gonna be like Hey, if you want the NIL, we're not the school for you. Or, you know, we can give you a moderate amount, but uh... I think there's going to be less than 40 teams, less than 50 teams, who have any chance of competing.
on any of these NIL Yeah. I think maybe you're definitely going to see a consolidation and There will be some teams that are. You're gonna lose The underdog, I think, in a lot of ways. Yeah, yeah, yeah. Yep, it is what it is, man.
And then the ability, you know, the fact that you can transfer programs used to be able to develop players, they'd stick around. You know, you could have a senior-laden team in a mid-major conference that was dangerous, but those guys are going to get paid. to go to these bigger schools now, so they're going to get poached away. It's just it's just different, man. Yeah, I've heard a lot of different theories on how they're going to try to handle it and maybe.
If players transfer within the conference, I mean, it's just, you know, maybe some of their NIL money goes back or they're penalized in some way. There are a number of kids that are going to make more NIL than they ever will at the next level if they even make the next level.
So a lot of these kids are petitioning for a fifth year, sixth year. Sure, yeah. How do you keep track of it? I don't know, man.
Somebody needs to. Legislate something, right? There needs to be some overarching. Let the kids make their money for sure, let the kids have freedom to move. But yeah, a lot of these schools are just going to give up.
And like, hey, we're it's going to be like two different divisions, even though just in name alone, right? The division of teams that are like, hey, we'll give you. the education and a you know, and and I don't know. We'll see how it goes. It's it's sad.
Um But uh there were still some upsets in this year's tournament, right? Oh yeah. I saw I saw one or two. But um But anyway, that's all I was thinking about this week. Coaches.
you know, coaching searches. what that looks like in the future, because you know people are firing coaches that don't make the tournament.
Alright, don't make the tournament S enough to get fired. And then um But anyway, we do have legal questions, right? We talk a lot on this show, week in, week out. We do a lot of estate planning talk. And we do a lot of personal injury, car accident talk, and then we mix in other things.
The law firm of Whitaker and Hamer, Joe and I's law firm. We cover a lot of different practice areas. And so that's like that's what we like to do on the show.
So today I mixed in some contract business law. I know a lot of our listeners. Own their own business, right? I know a lot of our listeners are in business for themselves. And so we're going to hit, we're still going to have our normal good mix, but we're going to hit a lot of contract questions.
Okay, we're going to do that today on the program. We get through our opening segment. We're going to move to segment two, and we'll feature the first question right out of the box just so you can be ready for it. I own a small business and signed a contract with a vendor. But it's in my personal name, not the LLC.
Now the deal went bad and they're threatening to sue me personally. Can I argue it was really the business?
So we will get to that question coming up on the other side. We want to remind you too: complimentary consult with Whitaker and Hamer in and around estate planning. Or if you've been in a recent car accident and you don't know how to proceed, grab one of the consults, no costs, no obligation, 919-7727000, 919-7727000, or visit wh.lawyer. We're back right after this. We are back on Judica County Radio, hosted by Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm, and practicing attorneys here in North Carolina.
They've placed offices across our great state, Moorhead City down at the coast. You got Gastonia over near Charlotte. You got Puquoi Verena, Goldsboro, Clayton, Garner, Cleveland, and the Cab City, Raleigh, North Carolina. I'm Morgan Patrick. Pleasure to jump on with the attorneys.
We're going to get to some questions here. We do have complimentary consults in and around estate planning. And also, if you've been in a recent car accident and you don't know how to proceed, grab a consult. No cost, no obligation with Whitaker and Hamer, 919-7727000. That's 919-7727000.
Or visit the website, wh.lawyer. All right, the question: I own a small business. And signed a contract with a vendor, but it's in my personal name, not the LLC.
Now the deal went bad and they're threatened to sue me personally. Can I argue it was really The business.
So, um Contract law is really interesting because cont contract law Both parties have a chance to make the contract. Like you're drafting the contract, there's probably revisions of the contract. You can make the contract, say anything. Um anything you want to. And so when it goes bad, Um Like here, the deal the deal went bad.
You know, they're threatened to sue me personally. Can I argue it was really the business?
I mean, the answer is maybe. But but here you have a lot of intent. Right, so we got, I always like it when there's more facts than this, right?
So, this is a small business dealing with a vendor. In that situation, the vendor is usually the one who's producing the forms. Maybe it's some kind of invoice that you sign. Um You know, but there should be some intent there. The vendors should know if they're dealing with a person or if they're dealing with your business, right?
Your business would be an LLC. Um But a lot of it depends on what the intent of the parties, if it's not clear on the form. Um It depends on the intent of the parties. Here, when the law firm is dealing with the vendor, right, we need to get. Paper, or we need to get a copy or serviced, or we need a vendor.
Here for the law firm, it's usually pretty clear they're servicing the law firm, right? That's usually pretty clear.
So even if I sign an invoice, I just put my. signature on it. They're usually meeting me at the law firm or talking at the law firm. They're installing the computer at the law firm or the, you know, so intent's pretty clear. You know, if this is something where it was real fuzzy, like the vendor had been doing business with you personally.
And you had just recently formed your LLC and they didn't know you formed your LLC, you'd probably be held personally liable.
Some vendors make you sign. a personal guarantee anyway.
Some vendors won't do business with an LLC. They require your personal signature.
So there's a lot going on here. And a lot of times with these. with these listener questions, we don't have all the facts that we need to really Analyze it.
Well But our question is: you've got this situation, a deal went bad. Can I argue it was really the business?
Yeah, you can argue that. Yeah. I was going to just say yes, but he did a lot better than I did on that answer. Yeah, but can you win the argument? Maybe.
Yeah, that's the way that most legal arguments go. Maybe. It's possible. Uh it's it's that all the factors and the circumstances that Josh just talked about all matter. And You know, that's what attorneys are going to do.
They're going to make the best potential argument they can for you. But it's rarely the case that you're going to come sit down with an attorney. It happens. But it's rarely that you're going to come sit down and they're going to tell you. No question.
This is a slam donk. You're gonna win no matter what. You know, there's always variables. A lot of times, you know, the other side's advocating for the opposite position.
So. There's very few guarantees, but Yes, you can make the argument. Um But but without more information about the specific situation, it's hard. And most vendors interview, like most vendors, like we're talking about vendors, I'm thinking about a restaurant getting their food, getting their beer, you know, like a. Uh you know You know, Home Depot getting deliveries, you know, most vendors.
are going to have you in the system. Right, there's this question. I don't think this happens a lot where it's questionable whether you sign for something personally or you sign for a business. If it's a business, You're probably in there as a business. And a lot of it depends on how much money is at stake.
You know, if this is a relatively small amount of money at stake, Um You know, who Anyway, a lot of facts we don't know. But yeah, you can always argue, and facts are important. You can go outside the contract to clear up. you know uh Incontinuities, right? You can, there's there's things in the contract you can you can bring in outside evidence to try to bring it in.
So, can I argue it was really a business? Yes, are you gonna win? Maybe, I don't know, but is Josh Whitaker your attorney? That's right. A lot of this can be me.
Like, sometimes you just make an argument strong enough.
So, that you can use it as leverage to settle the matter.
So, let's say there's. a hundred thousand dollars at stake here. And you owe $100,000, they want to pursue you personally.
Well, You might be able to settle this for $50,000 if you can make a strong enough argument.
So, a lot of this is. Is just having a strong enough argument to have some leverage, but. I don't really like that question. It doesn't have enough facts. Yeah, whoever did that, shame on you.
Yeah. Yeah. Who produced that question? All right, so let's hit one more real quick and we'll try to get the full answer. We have a contract that says any disputes go to mediation first, but the other side just filed a lawsuit anyway.
Do we have to go through mediation? Well you You see a lot of contracts that the average person signs, right? The average normal person, most of the contracts you sign are going to have an arbitration clause or a mediation clause because the view is that's a cheaper way to that's a cheaper way to handle conflicts than the normal court system. But Joe, you know this too. good mediation clause, good arbitration clause.
The court's gonna make you do that. Yeah. Right? If you sign one of these contracts with one of these clauses and then you You think you get wronged. You know, you can file a lawsuit, but the other side's going to bring this up as a defense.
You you said in the contract if there was a breach you'd mediate. And mediation and arbitration is kind of a private court system. Right, you don't go downtown, there isn't a jury, you pick a mediator. He or she listens to both sides. You put on your evidence, and then a mediator makes a decision.
Most of the times, those decisions can then go to. to court, you know. I I would mention You know, if there's fraud, right? If there's something like that. You don't have to mediate.
Right. But, um,. But if there's a good mediation arbitration clause, more than likely you're going to have to follow. That process. And that process is foreign to a lot of people.
A lot of people don't understand how that. works, the cost associated with it, time lines. Um There's professional mediators, professional arbitrators, and that's all they do is hear these. Consumer contract. conflicts.
All right, well, let's real quickly before we take a break, Josh, let's talk about those complimentary consults. Got about a minute here, but just spend some time.
Somebody calls, they grab one of these, estate planning, or if you've been in a recent car accident. Yeah, give us a call. It's 919-772-7000. You know, if it's after hours, leave us a message. But one of our intake staff will reach out to you and get you set up to talk to an attorney for free whenever it's convenient for you.
We can talk to you in person at one of our offices. We can go by Zoom. We can talk to you on the phone. You know, any way that whatever is easiest for you is what we try to do. But we do offer these free consults.
And you can talk to me and Joe. Yeah, you got questions. No costs, no obligation. Again, estate planning questions, maybe get rolling on that. Or if you've been in a recent car accident, don't know how to proceed, 919-7727000, 919-7727000.
You can also visit the website, WH.lawyer. More Judica County coming up. Welcome back in. It's Judica County Radio. Your hosts are Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm right here in North Carolina, where they practice law.
They placed offices in Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fucuv Arena. Gastonia and in Moorhead City for your convenience. I'm Morgan Patrick. Pleasure to jump on with the attorneys. Hitting some legal questions.
We're not going to waste any time. The next one: I inherited a house with a mortgage and I want to keep it. The lender says I have to refinance in my own name. Is that true?
Well Maybe. Yeah. Yeah. Mo most of the time. You know, um.
If you inherit a home And you were not, you know, your father, your mother, your aunt, your uncle, whoever you're inheriting this real property from, if they had a mortgage. They were the borrower on that note. There's a lien on the house. And that lien on the house, let's say they borrowed $100,000, they borrowed it from the credit union. And they've been painted every month, it's a third a year.
They die in year one.
Alright, you inherit the property. That lien goes with the property. That lien is attached to the real property. It doesn't matter who owns that property, who gets deeded that property, who inherits that property. That credit union lien is still in that house.
Um Your whoever you inherited from, I'm going to say your father, right? Just so we can talk about it. Your father was the borrower. When he died, personal liability died with him. Um Most Mortgage lenders are going to give you some time.
Right, you're gonna give them notice that your your dad passed away Most mortgage lenders are going to give you some time to continue paying the mortgage. But what happens a lot is people need to refinance that debt. You either need to pay it off or you need to refinance that debt. And the mortgage company, a lot of I'd say the majority of the time, you know, they're going to get notice that the owner has passed and they're going to send you something asking you to do that affirmatively and requesting you to do that. That's impressive.
Is that Sandy leaving? I don't know. I don't know, man.
Somebody's. Is that your courier running off to the courthouse? What was that? I don't know. It's a motorcycle right outside my house.
Too fast, too furious out there. Oh, that was not a motorcycle. But that's a problem for a lot of people because a lot of people may inherit This debt, and they don't have, you know, you need income. If you're gonna get a mortgage, you're gonna have to prove. Income.
And some people don't have income necessary to refinance some of these. Mortgages, so a lot of people, you know, in that situation, will end up selling the property. Or doing something else because they can't take on the debt burden that comes with it. And so that's something to always be mindful of. if you're going to leave real property to a person, but you there's a mortgage or a home equity line or a reverse mortgage, that debt's going to that lien's going to go with the with the real property.
Can the person you're leaving this to Pay that off. If they can't, some people get life insurance policies, right? Just to fund Paying off that kind of debt so they don't leave a burden. Uh to the next generation, but um Yes, that that we get that question asked a lot of different ways. There's a lot of different variations of that question, but that's something to think about when you're doing your estate planning.
Are you leaving someone an asset with debt that they have no way of paying? Question and answer on Judica County. We've got more to come. We're going to take a short break. Want to remind you: we have complimentary consults in and around estate planning, or if you've been in a recent car accident and you've got questions about how to proceed, grab one of the consults right now.
No cost, no obligation. 919-77270000. That's 919-77270000. You can also visit the website wh.lawyer. Just leave some background information.
They'll call you up and they'll set you up with one of those appointments. 919-77270000 or wh.lawyer. More at Judica County coming up. Um Judica County Radio, hosted by Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm. They're practicing attorneys here in North Carolina and offices all over our state, Moorhead City down at the coast, Gastonia over near Charlotte.
And you also have Fuqua Verena, Goldsboro, Clayton, Garner, Cleveland, and the Cap City, Raleigh, North Carolina. I'm Morgan Patrick. Pleasure to jump on with the attorneys, talk legalese. We're taking questions. Again, these are all over the legal stratosphere, and these questions come in a lot.
So we're handling those today. We want to remind you: there are complimentary consults with Whitaker and Hamer in and around estate planning. And if you've been in a recent car accident and don't know how to proceed, again, these are free, no obligation consults. 919-77270000 to grab one. That's 919-77270000000000000 You can also visit the website WHAT.
Dot lawyer. All right, so next question. My parent had a will. But also had a trust. The executor and trustee are different people, and they don't get along.
Who actually controls things in this situation? This estate plan was terrible. What are you doing? When you're doing your estate plan and you're thinking about the people that will be your fiduciaries, don't put two people in charge who you know don't get along. And it also doesn't make a whole lot of sense in that scenario.
If you've got a trust-based estate plan, the effect of your trustee is going to largely be the same as the effect of the executor i i in the event that your will has to be used.
So Nine times out of ten, you're going to have the same person in both positions. Let's change this question, Joseph. Let's change this question. Yeah, we can do that. It's our show.
That's right. It is your show. My parent had, I don't like parent, but let's just say father. My father had a will. But he also had a revocable living trust, right?
So now we're being more. We're not just saying a trust, because a trust could be anything. We're saying my parent had a pour over my father had a pour over will, but also had a revocable living trust.
Okay. The executor and trustee are different people who don't get along. Who actually controls things?
So if you if you have a pour over will, you know. the the entire purpose of a pour over will is the fact that it pours over, right? it pours over into the trust.
So e everything in that will is is going to ultimately pass the trust.
Now The executor, in theory, depending on what kind of assets those are that have to make it there and any kind of a state administration that has to go on, could. you know potentially have some say, but ultimately Everything's going to end up in trust. The clerk's going to make sure that's the case. and the trustee is going to control at the end of the day. Yeah, I think in this situation, usually if you sit down with an estate planning attorney, you get your revocable living trust in place, you fund.
your revocable living trust. You get your real property moved over. Life insurance, bank accounts, you got the trust as the. As the contingent beneficiary, everything is gonna make its way to the trust, and the hope is. Your poor overwill doesn't even need to be probated.
You know, and if the father had done everything right in his question, the executor is going to have no power. Because an estate doesn't get open, right? The executor only controls what's in the estate, and control is a bad word because. Um The executor can only do what you instructed him to do in the will, what the clerk will allow down at the courthouse.
So, this in our question, I think the answer is the trustee. Yeah. Who actually controls things?
And the answer is going to be the trustee is actually the one who's going to control things.
Now, when you drafted your trust, you told your trustee what you want to happen. And so, when we say the trustee controls things, the trustee. isn't just making it up as they go. You've told the trustee, I want this to go to this kid. I want this to go to this kid.
You need to hold this in trust until this kid is 45. He should get a monthly stipend. Like, you've already told the trustee what to do. Um But yeah, if the trustee and the executor don't get along in this one, who cares? The executor's really not got much to do.
But that was poor estate planning. Maybe they liked each other when the father did the estate plan. Maybe that's usually how it goes. They usually do like each other for, you know, a little while at least. Yeah, when someone, when a parent dies, you know, sometimes it all works out well.
Um but sometimes you have you know, some kids that don't get along or, you know, um Anyway, a lot of that stuff can come up when that happens.
So let me ask you guys, do you get along uh first of all, do you have Sibs and do you get along with them? I have one sibling, and yes, we get along just fine. Yeah, I've got one sibling, and we get along great. I do not like Josh's siblings, though. If you're going to do cross-pollination here, no, I'm kidding.
Josh's siblings are great, too. Yeah, yeah, yeah. Very, very lucky. How about you, Morgan? You guys all get along.
Yeah, I've got a kid's sister. She's awesome. Yeah. Yeah, family's family, man. Yeah, that's how we were raised.
Family's family, and you don't get to pick and choose your family, but you have to like your family, right? You have to like your family. Yeah, you have to like your family. That's a legal rules. That's a legal rules, you have to tolerate.
You have to tolerate, right? The love rules. I mean, I guess if your family, you don't have to like her. No, there's all kinds of reasons, you know, why family doesn't get along, but. Yeah, I'm not going to let my boys not like each other.
It's going to be prohibited. Yeah. Well, make them hug.
Well, it's just important. I mean, we're having a little chuckle about it, but estate planning, you know, really sit down and map this out. The opportunity to have that conversation, you can do it with Whitaker and Hamer. It's a complimentary consult. Again, no obligation, there's no price on this.
You can call 919-772-7000, 919-772-7000. You can also visit the website wh.lawyer for that complimentary consult. All right, real quickly, guys, here's the next one. I formed an LLC with a partner, but we never created an operating agreement.
Now we disagree on how profits should be split. What governs us? Um Ah! Disregard that. The uh So, this is an interesting question.
We get this question too. We've got this question a lot of different ways. The operating agreement is what would have covered you. Right, that's why we want it. It goes back to how we were talking about contracts.
The operating agreement is just a contract between members. Of the LLC. And so you have the option to put everything down on paper. How are we going to split? Profits, how are we going to split losses?
What happens when the LLC needs money? Um Who has to give money, who doesn't? Everything can be handled in that operating agreement, but very rarely. Do do people Well, not very rarely. A lot of times people skip that step.
That's a costly step for a lot of people, or they don't have enough business experience ahead of time to kind of understand what it's trying to prevent.
So, here they formed an LLC, which means they filed the two-page document down at the Secretary of State's office. And that doesn't help us. You're stuck with general statutory provisions now. Um. And that's going to be default, right?
If there's two partners, you're going to split income 50-50, losses 50-50. You're not going to have a way to really break a tie, you know, like if you and your partner disagree. How do you break that tie? There's really no provisions for that.
So, what governs Not much. Would you say, Joseph? The law, statutes, like you said. Yeah, but here we got two partners and they disagree. Mm.
Right. it's ultimately gonna be you're gonna what what are you gonna play it out to its logical conclusion? They're going to sue each other, right? They're either going to figure out how to agree or they're going to sue each other. And then you're going to have.
A fact finder determining what's the right thing to do. Yeah, yeah, yeah. So the profits, let's say the profits for year one was $100,000, and one guy thinks he should get more because he did more of the work or what have you.
Well, they don't have an operating agreement. Um, it's going to be 50-50, right? That's what the law is going to require. Yep. And so, if they don't want to, if one guy doesn't want to split it 50-50, like you said, it's going to, they're going to sue each other.
Yeah. And um You know, if you think you're entitled to more than 50%, you're going to have to prove it in court, but there's no other agreement to the contrary.
So it's just a bad position to be in. And I see that several times a month. Several times a month, I see where people have entered into some sort of an arrangement, a business. Um or you're doing other business type things and they haven't thought about If this fails, how do we get out of it? And if it succeeds, how do we split the proceeds fairly, the profits fairly?
This happens all the time. And it's um You know, your operating agreement doesn't have to be overly com complicated. It's nice to have a meeting with an attorney who knows what he's doing or she's doing to bounce some stuff off. Um if it's complicated enough Attorney can draft it. We draft them for folks every day.
I'm gonna draft one today. That's what I'm going to do after the radio show. But anyway, you can plan ahead. It's contract law. You can agree to anything you want to agree to.
Judica County Radio, Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm. We're taking legal questions, answering those today on the program. You've got questions of your own. We have complimentary consults with Whitaker and Hamer in and around estate planning. But also, if you've been in a recent car accident, don't know how to proceed, you can grab one of the consults as well.
919-7727000, 919-7727000. You can also visit the website, WHO. Dot Lawyer. We've got more Juica County coming up. Judica County Radio, hosted by Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm.
They're practicing attorneys here in North Carolina. Offices all over the great state of North Carolina: Moorhead City, Gastonia, Fuquay Verina, Goldsboro, Clayton, Garner, Cleveland, and the Cab City, Raleigh, North Carolina. I'm Morgan Patrick. Pleasure to jump on with the attorneys. Hit these legal questions.
You're going to have questions of your own. And we have complimentary, no-obligation consults available in and around estate planning. But also, if you've been in a recent car accident, don't know how to proceed, grab one of the consults. Again, no cost, no obligations. See if you're on the right track.
919-77270000. It's 919-7727000, or you can visit the website, WHO. All right, so next up on our questions I'm a trustee, and the trust owns real estate. One beneficiary wants to keep it. Another wants it sold.
Do I have to pick a side here? I've been very critical of some of our questions today. And I want to say that I think this is a great question. You like this one, huh? I like this question.
Right. The.
So here's what we got. We got we got a trustee. This could be anybody. This could be Joe. This could be Morgan.
This could be a bank, an institutional trustee. This trustee could be anybody. But they they the trustee, we talked about the trustees the one that's in charge of the trust. Handles the trust, handles the assets, the investments, distributes to the beneficiaries. Here we have two beneficiaries.
I'm assuming they're 50-50. Lifetime beneficiaries, right?
So this is like uh if you left a trust for for two of your children. You pass away.
Wells Fargo steps in, your attorney steps in, your CPA, whoever's the trustee. And they're charged with providing for these two beneficiaries. And so one of the assets is real estate. Um is a house. Let's say it's a rental house.
Um So it's making money every month, right? There's a tenant in there. It's making money for the beneficiaries. And for some reason, One thinks they should, maybe the market's real hot, and one of the beneficiaries thinks, hey, you should sell this now, we'll get a lot of money in the trust. And one says no, it's an asset, it's appreciating.
Keep it. It's making rental income in the meantime. We'll be better off down the road, right?
So you got two beneficiaries. And they want the trustee to do this one thing. The question is, does the trustee have to pick a side? That's the question. That's a That's a pretty good question, man.
I think it is a good question. I think it is a good question. The answer is easy. The answer is no. Yeah, the answer is no.
And the answer is no because well, ultimately, the trust dictates what to do, right? And generally, in this situation. You know, well, not even just generally always. The trustee is going to have a fiduciary duty to the beneficiaries, and that's all beneficiaries. Unless you've got a really strangely structured trust.
you know, where where certain beneficiaries have other perks that that some don't. Generally it's going to be You got a fiduciary duty to everyone. You got to act in everyone's best interest.
So you can't just do something that benefits one.
So, and the trustee has to remain impartial in that. decision making process and evaluate everything from To trust per you know, there's a lot of things that that could play in it, factor into that equation. But it's not just going to be. this one beneficiary says keep it one says sell it and we pick which one we like better. Yeah, trustee does not have to listen to any the the trustee might want to listen to the beneficiary.
You know, if one beneficiary, they're probably charged with with helping them maintain a certain lifestyle or or whatever. And And so you want to listen to the beneficiaries because you want to know what's going on in their life. Does one have a son that's going to college? Is one having some medical issues and has a lot of medical bills? You do, as a trustee, you have a fiduciary duty to the beneficiaries, but You don't care.
The beneficiary's opinions on the assets you're managing. are not im I would argue are not important. Yeah. You know, you're going to look at, you're going to have to look at this, like Joe said, you're going to have to be impartial. You have a fiduciary duty to both beneficiaries and your professional experience.
And you're going to have to decide what to do with this asset. And a lot of times, if you don't have experience, There's plenty of trustees who aren't investment advisors, who don't work at banks. And so it's okay to get some professional guidance. That's one thing a trustee can do: say, hey, I don't know much about real property, but I went to this real estate agent. And I went to this, you can get a professional's opinion.
on on that matter. But yeah, this I think I like this question because the trustee is the trustee. They definitely have a duty to the beneficiary, but you don't have to listen. The beneficiaries, what they want to do with assets, is not important to you. In this situation.
So I kind of like that, you know. In this situation.
And you, you know, you. There are situations where uh a beneficiary has the right to make requests and then the trustee, depending on the terms of the trust, can choose to honor those requests or not. But yeah, and th as this situation is pres presented.
Now Yeah, and if both beneficiaries came to you, that's a different scenario. Like, here the beneficiaries disagree. Let's say both beneficiaries come to you and say, hey, The market will never be this hot again in our lifetimes. We both need some extra cash. Let's sell it.
And that's different. I think. You know, because the beneficiaries and a lot of times can remove a trustee.
So I think if the beneficiaries come to you together, And say, hey, we think this is what we should do. I mean, you're still bound to the original intent of the trust. But I think that's a different question. But um But yeah, here no the trustee's just gonna do what the trustee reasonably believes to be in the best interest of both beneficiaries. Legal questions with Judica County.
Again, Josh Whitaker and Joe Hamer are your hosts, managing partners, Whitaker and Hamer law firm, and again, practicing attorneys here in North Carolina. A complimentary consult in and around estate planning, or if you've been in a recent car accident, don't know how to proceed, you can get one of these consults. No cost, no obligation. Just call 919-77270000, get your questions answered. 919-77270000.
You can also visit the website, wh.lawyer.
Next question: We'll hit this one real quick. I bought property and later found out there's a restrictive covenant limiting the use, but no one in the neighborhood follows it anymore. Can it still be enforced? Yes, before we get there, WrestleMania is this weekend, isn't it? What?
In this WrestleMania weekend? When Josh hears about Covenants, he thinks about wrestling people because he hates them that bad.
So that's where that came from. Squirrel. I don't have the answer to that. I don't either. I feel like it's that.
I feel like I've seen some heavy ads working out at the gym on the TV with the volume down. I've seen heavy ads, so it might be this weekend. Morgan works out exclusively at gyms that support wrestling. It's just on ESPN. ESPN's all over that stuff.
ESPN Plus, whatever. I think WrestleMania is this weekend. Huh.
Well, that's a thing. You got that, right? NBA playoffs, WrestleMania. Yeah. It's going to be warm outside.
A lot happening, man.
Well, we had a question, Morgan.
Sorry, I got distracted. Yeah, yeah, yeah. Bought property, later found out there's a restrictive covenant limiting use. But no one in the neighborhood follows it anymore. Can it still be enforced?
Hit that real quick.
Well, Joe, I think to hit this question, we got to know what a restrictive covenant is. Yeah, so a restrictive covenant is is essentially it's A restriction on real property. They're they're recorded, so they're public record, meaning you know, anybody. Anybody can see them, can view them, and everybody in theory should have notice before they purchase property because it is public record. And they are very much enforceable.
They're very much a real thing. that has validity. And uh Yeah. That's in a nutshell. There you go.
That's it. I don't want to answer the question because you seem like you're really fired up to answer it yourself.
So, you got a restrictive covenant. No one in the neighborhood follows it anymore. Can it still be enforced? Answer's maybe, right? The answer is maybe.
It depends on what it is. There's plenty of restrictive. If you go doing title work and you get back into the. thirties, forties, fifties, you know, there's restrictive covenants that bar African Americans from owning property in certain neighborhoods, and law has made that unenforceable. Yeah, any restrictive covenant against public policy.
That being a perfect example, yeah. No, no, and then if it was a restrictive covenant from like the 40s that restricted it to residential, but now everything's commercial, there's an argument. that that that purpose has been abandoned. If it says you can't have chickens in the neighborhood, but every one of your neighbors has chickens, there's an argument that it's a violation, that everybody's violated it. It's not usable anymore.
but usually a restrictive covenant You have some defenses against it, but any property owner Can enforce a restrictive covenant against any other property owner, right?
So if you have covenants from the 40s that say you can't have chickens, you decide to get chickens. There's no HOA. But the neighbor can sue you and say, hey, I bought this property based on these covenants, saying I wouldn't be next door to a bunch of chickens. And they can sue you to enforce that covenant. And they'll probably, I mean, unless you have a defense against it.
I mean, they're going to, yeah. They may very well win that thing. They're probably going to win that thing. The courts love chickens. That's one thing you learn.
as an attorney. We have one more segment to go and an opportunity to get on the calendar with Whitaker and Hamer complimentary consults in and around estate planning. Or if you've been in a recent car accident, don't know how to proceed with that again, get one of the consults, ask questions, 919-77270000. There's no cost, no obligation, 919-77270000, or visit the website wh.lawyer. Closing segment coming up, you're listening to Judica County Radio.
Welcome back in Judica County Radio, hosted by Josh Whitaker and Joe Hamer, managing partners, Whitaker and Hamer Law Firm, located right here in North Carolina. That's exactly where they practice law. They've placed offices in Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fuque Verena, Gastonia, and down on the coast at Moorhead City. I'm Morgan Patrick hitting some legal questions, and we're going to get into this next one. Couple of questions left.
Here it is. I transferred assets into a revocable trust. but I'm still using them like normal. For tax and liability purposes, does anything actually change? No, damn it.
We'll talk about this question, but no, not really. If you come in, we get that question, what, once or twice a day, but if you come in, And you set up your estate plan, and part of your estate plan is a revocable living trust. A lot of times you're going to put your residence in there. You're going to maybe put some of your other investments in there. That's a discussion we have at the table.
But for sure, your home is probably going to go into your revocable living trust. Yes, sir. And the answer is: no, it really doesn't change much for you. The trust is. Your alter ego.
That's the term attorneys like to use. The Revocable Living Trust is an alter ego. of yourself. And it's going to use your social, right? It's just you.
So, if you put property in there and then you sell it later, you're still going to get the same tax advantages. For your principal residence, as if it was still owned in your name. Um So that's the good thing about a trust is you're you're you're You're making Life easier on your airs, and you're changing things, but they really don't change your day-to-day. Your day-to-day kind of stays the same. Um But that's a good question.
I like that question. Yeah. There's there and there's a lot of benefits to beyond Yeah. We we've If you've ever listened to the show, you've heard us. tout the beautiful, amazing benefits of having a trust.
That's something that You may have heard us say that more times than you'd like, honestly, at this point. But it's a good thing, a great thing. Highly recommend. Um Yeah, yeah, yeah, yeah, it it is, and it doesn't change much, and that was the purpose of that question. Question answered, Morgan.
Okay, here we go. All right, final question. We want to remind our listeners: if you've got questions about estate planning, maybe you've been in a recent auto accident, don't know how to proceed, we do have complimentary consults with Whitaker and Hamer, meaning you're not paying for it and also no obligation. You're not required to become a client. If you want to, you can.
But obviously, this is an opportunity for you to get some education on either estate planning or if you've been in a recent car accident. Grab one of the consults, 919-7727000, 919-77270000. Also, you can visit the website wh.lawyer. Get signed up there. All right, here's the next question, guys.
Could be our last. I'm buying property through a contract assignment. But I've never dealt with one before. What risk should I be thinking about in this situation. Ugh, it's a very technical question.
Yeah, it's a very technical question. I mean, you know, Josh, we do a lot of real estate. We see these from time to time. And There's some folks out there doing it the right way and doing a great job with it, but those folks, I'd say, are few and far between. Um It's it's very rare.
With these assignment contracts, that you're not, a lot of times it's folks who are very new to investing, they've taken a course, teaching them how to do it. And Yeah, there's a lot. There's just a lot of pitfalls, man. Honestly. There's probably more pitfalls than we can get into.
and the amount of time we have to answer this question. Like that's a pretty deep That's a deep well, you know? Yeah, yeah. The thing to keep in mind, I don't think we'll get too far down the road on this one, but the thing to keep in mind is there's two parties, right?
So there's a buyer and a seller that have already agreed to terms, a purchase price. Things like that, and the buyer is turning around and assigning you the contract, so you're taking the contract. As is Um Usually the person assigning you the contract wants some sort of assignment fee or some sort of compensation. Um You know, and so you got to factor all that in and and um You know, it happens all the time. It's something just to be wary of.
I'd let an attorney take a look at the contract and the assignment. Um But I think, yeah, there's all kinds of technical things that we could get into that we won't get into, Morgan, but. That's one of those things if you get into that kind of specific area you need to you need to give an attorney a call. and uh just talk through it. Um And and understand your risk.
Risks are fine. People make a lot of money on on things that are that are risky but but you need to at least understand the risk before you get too far down the road. Legal questions here on Judica County Radio. Josh Whitaker and Joe Hamer are your hosts. They're the managing partners at Whitaker and Hamer Law Firm right here in North Carolina with offices located in Raleigh, Garner, Cleveland, Clayton, Goldsboro, Fuquay Verena, Gastonia, and in Moorhead City.
You've got questions, maybe you're dealing with estate planning or you're thinking about estate planning and haven't started that. We have a complimentary consult waiting for you. Just call 919-7727000. There's no cost. Leave the checkbook at home.
No obligation to become a client, but you can get some information. And if you want to roll forward, you certainly can. Estate planning, very important: 919-77270000. And also, if you've been in a recent car accident and you just don't know what to do, right? You don't know the next steps to take, grab one of the consults with Whitaker and Hamer, 919-77270000.
That's 919-77270000. Another addition. Of Judica County Radio is in the books for Josh Whitaker and Joe Hamert. I'm Morgan Patrick. We'll see you on the radio next week.
Judica County is hosted by attorneys licensed to practice law in North Carolina.
Some of the guests appearing on this podcast may be licensed North Carolina attorneys. Discussion on this podcast is meant to be general in nature, and in no way should the discussion be interpreted as legal advice. Legal advice can only be rendered once an attorney, licensed in the state in which you live, has the opportunity to discuss the facts of your case with you. The attorneys appearing on this podcast are speaking in generalities about the law in North Carolina and how these laws affect the average North Carolinian. If you have any questions about the content of this show, you can direct such inquiry to Joshua Whitaker at jmw at mwhlaw.lawyer.
