Life Insurance: Vital to Your Estate Plan During Coronavirus Pandemic

The world’s latest pandemic, corona virus disease of 2019 (COVID-19), should prompt all Americans to consider our estate plans. Even if you aren’t concerned about passing away from the virus, it’s important to give your loved ones peace of mind during uncertain times. For those of us who are unsure where to get started, life insurance should be one of your first considerations.

Why Life Insurance?

Pay off Debts

Life insurance policies can pay a lump sum death benefit to make sure your loved ones aren’t burdened by any debts you may leave behind when you’re no longer here. It can even help your beneficiaries pay debts that they may currently have.

Provide for Your Children

If you are a new parent, one of the first things you should do when entering parenthood is to make sure your life insurance policy will provide financial security to your children in the event that you pass away. Cover their education and lifestyle until they are able to get established. They may find themselves in a situation such as the current pandemic, where many people are being furloughed and out of work due to quarantine and social distancing measures. Certain situations may arise that may make it hard for them to pay their rent or cover necessities.

Replace Income

Nowadays, maintaining a household requires the income of both spouses. One of the many uses of life insurance is to protect the flow of funds for a surviving spouse. Have you ever considered how your spouse would survive if the income you bring to your household suddenly stopped?

Cover Your End-of-Life Expenses

Funerals can easily cost thousands of dollars. At minimum, you should have a life insurance policy that can cover expenses such as a casket, your ceremony, and your burial plot.

Secure Your Business and Passion Projects

If you are an entrepreneur or have a particular project you’re passionate about, your businesses and projects will be apart of your legacy. As a business owner, you need to think about more than just your family, you need to consider your work and your employees (if you have any).  Life insurance can be used to protect your business and secure your assets.

The Sooner You Get Covered, The Better

Many Americans put off getting life insurance in the face of other debts such as mortgage payments, student loans, and car payments. However, while paying off current debt is critical, putting off buying life insurance has a significant economic impact, much like delaying saving for retirement. It is always cheaper, and sometimes substantially less expensive, for a younger person to buy insurance than an older person. This means the potential benefits of insurance can be just as large and cost much less or may be much larger and cost about the same. In other words, life insurance for a 22-year-old is a better proposition than life insurance for a 55-year-old.

Get Started Today

Getting life insurance coverage is a relatively easy process. Getting a free quote and choosing the right coverage for you can take as little as little as 10-12 minutes. Some companies are even able to get you covered without a medical exam. Don’t let another pandemic happen without having proper coverage in place for your family and business.

Requirements for a Valid Last Will & Testament in Alabama

While having a last will and testament is great and essential to every estate plan, it won’t be worth the paper its written on if it isn’t validly executed. Every state has different requirements that a last will and testament must meet in order to ensure that the will is validly executed, but for the most part, every state has many of the same requirements and formalities. If these requirements aren’t met, the will can’t be legally enforced. Below are the requirements for a valid last will and testament in Alabama.

Age & Capacity

In order to execute a last will and testament, a person must be at least 18 years of age. The person must also be of sound mind. To be of sound mind means to be aware of what property you have in your estate, what you want to do with your property, and you must be able to comprehend how your property will be distributed based on your will. A common mistake made by many is waiting until a sick family member is suffering from some form of dementia before urging them to execute a will. This is never a good idea as it will almost always call the person’s capacity into question, which may provide an opening for the will to be contested.

Writing and Signature Requirements

A last will and testament in Alabama must be in writing and signed by the testator (the person writing the will), or at the testator’s direction and in his or her presence. The will also has to be witnessed and signed by at least two people. These witnesses must either see the testator sign the will or witness the testator acknowledge his or her signature on the will. Historically, a person who had an interest in the assets in the will would be disqualified as a witness to the execution of the will. That is no longer the case.

A “Self-proving” Will?

If the above requirements are met, the will has been validly and legally executed in Alabama. However, when the will has to be enforced by a probate court one of the witnesses will have to appear at the probate court in order for the will to be enforced by the court. If a will is self-proving then this step can be skipped.

A “self-proving” will is one that comes with a sworn statement from the testator, who acknowledges that the document is his last will and testament and that he or she is 18 years of age or older, of sound mind, and that he or she is executing the will voluntarily. The witnesses of the will must affirm that the testator voluntarily signed the will, and to the best of their knowledge the testator was at least 18 years old, of sound mind, and was under no duress when signing the will. These sworn statements can be made in front of a notary public. For this reason, most wills are notarized in addition to the previously-mentioned requirements.

If you’d like to know more about the requirements of a valid last will and testament, or if you’d like to have a last will written, contact our office today at (205) 578-1597.

Four Steps to Take Right After an Alzheimer’s Diagnosis

If you or a loved one has been diagnosed with Alzheimer’s disease, it is important to start planning immediately. There are several essential documents to help you once you become incapacitated, but if you don’t already have them in place, you need to act quickly after a diagnosis.

Having dementia does not mean an individual is not mentally competent to make planning decisions. The person signing documents must have “testamentary capacity,” which means he or she must understand the implications of what is being signed. Simply having a form of mental illness or disease does not mean that you automatically lack the required mental capacity. As long as you have periods of lucidity, you may still be competent to sign planning documents.

The following are some essential documents for someone diagnosed with dementia:

  • Power of Attorney. A power of attorney is the most important estate planning document for someone who has been diagnosed with Alzheimer’s disease or some other form of dementia. A power of attorney allows you to appoint someone to make decisions on your behalf once you become incapacitated. Without a power of attorney, your family would be unable to pay your bills or manage your household without going to court and getting a guardianship, which can be a time-consuming and expensive process.
  • Health Care Proxy. A health care proxy, like a power of attorney, allows you to appoint someone else to act as your agent for medical decisions. It will ensure that your medical treatment instructions are carried out. In general, a health care proxy takes effect only when you require medical treatment and a physician determines that you are unable to communicate your wishes concerning treatment.
  • Advanced Directive for Health Care or Living Will. Advanced directives and living wills explain what type of care you would like if you are unable to direct your own care. An advance directive can include a health care proxy or it can be a separate document. It may contain directions to refuse or remove life support in the event you are in a coma or a vegetative state or it may provide instructions to use all efforts to keep you alive, no matter what the circumstances.
  • Will and Other Estate Planning Documents. In addition to making sure you have people to act for you and your wishes are clear, you should make sure your estate plan is up to date, or if you don’t have an estate plan, you should draw one up.  Your estate plan directs who will receive your property when you die. Once you are deemed incapacitated, you will no longer be able to create an estate plan. An estate plan usually consists of a will, and often a trust as well. Your will is your legally binding statement on who will receive your property when you die, while a trust is a mechanism for passing on your property outside of probate.

In addition to executing these documents, it is also important to create a plan for long-term care. Long-term care is expensive and draining for family members. Developing a plan now for what type of care you would like and how to pay for it will help your family later on. Your attorney can assist you in developing that plan and drafting any necessary documents.

If you would like more information feel free to contact our office today.

Estate Planning Tips for Natural Disasters

Natural disasters can be extremely scary for all involved. Many people lose their lives and leave their families behind because they’re unable to get help during an emergency. It can also be scary for outsiders to watch as so many helpless people are injured or killed during a natural disaster. It’s important to have a plan in place, so that you and your family are protected, no matter what happens. Below are 10 estate planning tips to keep in mind in order for you and your family to be better prepared for a natural disaster.

  1. Keep a copy of your critical documents in a fireproof safe, safety deposit box, or in the cloud in a password-protected folder that can be accessed outside of the disaster zone.
  2. Create a password file so your representatives can access your 401k, IRA and investment accounts. It is almost impossible to get information on your investments and life insurance policies without the requisite paperwork and account information.
  3. Make sure your personal representatives and trustees have copies of your current wills, trusts, advance directives and powers of attorneys. We provide copies to give to clients so that they can email them to the right person.
  4. Keep your CPA or financial adviser up to date on your estate plan and who prepared it. Your representatives will need to contact the attorney who hopefully has copies of your executed documents in a safe and accessible place.
  5. Know where you homeowners insurance policy is and communicate with your agent on where back-up copies might be placed.
  6. Find your life insurance policies, scan them and get rid of the expired ones. Know how much insurance you have through your employer and who the beneficiaries are.
  7. Create an inventory of your assets and liabilities and update it once a year. Lost accounts and utility deposits happen frequently and ended up being turned over to the state when the owner cannot be found.
  8. Create an emergency number for family members to call that is a landline. Cell phones may not be operative. Keep hard copy list of the phone numbers of extended family members–not just in your cell phone.
  9. Don’t assume the courthouses will be in operation anytime soon. Many of the buildings are seismic-deficient and paper records may be destroyed.
  10. If you have sufficient assets, consider preparing a trust to avoid probate and name an out-of -state back-up trustee to administer your estate.

For more information on how you can better prepare yourself for a natural disaster contact us today.