Five Reasons Will Challenges are on the Rise.

  1. Elderly population growth. Our elderly population has and will continue to grow significantly. By 2030, more than 20 percent of U.S. residents are projected to be age 65 and over, compared with 13 percent in 2010 and 9.8 percent in 1970.[1]
  2. More people are preparing their own wills. In this “Do-it-Yourself” legal era, more and more people are deciding to prepare their own wills. Naturally, this trend invites challenges to a will.
  3. Complex family structures. Complex family structures are the new norm and can sometimes lead to inter-family rivalry over a loved one’s estate.
  4. Poor economic climate. The poor economic climate for younger generations allows beneficiaries to rely on anticipated inheritances.
  5. Alzheimer’s and Dementia on the rise. The Alzheimer’s Association reports that by 2025, the number of people age 65 and older with Alzheimer’s disease is estimated to increase by 40 percent from 2015. By 2050, the number of people with Alzheimer’s disease may triple.[2] Unfortunately, estate planning documents of Alzheimer’s and Dementia patients are more likely to be challenged.

[1] Jennifer M. Ortman, Victoria A. Velkoff, and Howard Hogan, An Aging Nation: The Older Population in the United States. May 2014. United States Census Bureau. https://www.census.gov/prod/2014pubs/p25-1140.pdf(Accessed October 26, 2015).

[2] Disease Facts and Figures. Alzheimer’s Association.http://www.alz.org/facts/#prevalence (Accessed October 26, 2015).

 

 

 

Disclaimer. This post is not intended to give, and should not be relied upon for legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.

What’s lurking behind your LLC?

Business owners are often wooed by the misconception that an LLC shields them from any personal liability to the LLC’s members.  Although an LLC can protect a member from actionable claims, that protection is not absolute.  In certain situations, a member of an LLC may be held personally liable to the other individual members of the LLC.

In North Carolina, an LLC member is typically barred from bringing an individual claim against another member for injuries to the LLC.  However, like most rules, there are exceptions.  In Barger v. McCoy Hillard & Parks, the Supreme Court of North Carolina articulated two exceptions to the general rule, applicable in LLC member disputes.

  1. First, an individual may be bring an action where a special duty exists between the LLC members. A special duty will exist when (a) a party’s wrongful actions induced an individual to become an LLC member, (b) a party performed individualized services directly to the LLC member, or (c) a party advised the member independently of the LLC.
  1. Second, where the LLC member suffered an injury that is separate and distinct from the injury sustained by the LLC itself, the member may bring an individual action. While the harm can arise from the same wrong to the LLC, the injury must be peculiar to the member.  An injury is peculiar or personal if a legal basis exists to support allegations of an individual loss.  The diminution or destruction of an investment is (generally) the injury suffered by the LLC itself and therefore, not actionable.

Once the member plaintiff has met the threshold set forth in Barger, a the member plaintiff will have standing to bring individual claims in lieu of, or in addition to, derivate claims on behalf of the LLC.

See my next posts for an overview of standing in derivative claims and a discussion of case law following Barger.

DISCLAIMER. This post is not intended to give, and should not be relied upon for legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.