Easy Steps for Estate Planning

Most people don’t have a will, never mind an estate plan. Planning your estate is an essential part of preparing for your later years in life. Before you start planning your estate make sure you have a will. If you don’t have a will at the time of your death your entire estate will end up in probate court. This means that the family you leave behind will have to fight to gain control of any of your assets. All of your important documents should be in one place. Consider a health care proxy, also known as a living will. Your living will should have a strong power of attorney that will ensure that your wishes will be carried out in the event that you’re unable to speak for yourself in a medical emergency or an accident.

Beware of online “do it yourself” programs. These software packages will get you started with your estate planning but you’ll want to hire an attorney to help you complete the form and legalize your signature. Your attorney will also be able to help you review your estate and guide you in making the right decisions. Your last will and testament will have to be notarized by yourself and by witnesses. Signatory laws will differ and depend on where you live. Make sure that one of your beneficiaries doesn’t sign as a witness.

If you have already set up an estate plan make sure that you review it on a regular basis. You’ll want to make changes to your estate and will when there are changes to your life such as divorce, marriage, the death of your spouse, the birth of a child, adoption, or when you move from one state to another. Have a clear list of all your assets and liabilities. Remember that your liabilities will have to be paid when you die. The remainder, less probate and administrative costs, will go to your beneficiaries. It will be up to you to decide what portion of your assets each of your beneficiaries receives.

Choose an executor who can manage your estate from the time of your death until the time that all of your assets have been dispersed. The executor needs to have the ability to manage your estate as well as the time to do so. Don’t forget to appoint a guardian for your children. Guardianship is a big issue and should be discussed with whomever you want to appoint for this important duty. Remember that planning your estate is probably a lot less complicated than you may think it is. Take the time to be prepared for your death by planning your estate today.

Estate Planning for Your Children

If you have minor children, estate planning is a very important step when it comes to planning for your death. Failing to name guardians for your children in your will can lead to custody issues that are easy to avoid by simply taking the time to decide who you want to take care of your minor children in the event of your death. Determining who will raise your children if you die can be a difficult decision. For this reason alone many parents avoid the issue of custody decisions since they’re unable to find someone who they think will be the perfect guardian.

Avoiding the issue of guardianship is the number one reason why people fail to plan their estate or have a will. By procrastinating the decision about custody parents put their children at risk in the event of their death. Unless you name a guardian the courts will name someone they feel is right for the role of guardian. And this could be someone who you least wanted to have custody of your children. Court battles for custody can be long and drawn out, especially if there is more than one applicant who is seeking custody. This can place a huge financial and emotional strain on your children as well as deplete the assets from your estate. The worst case scenario is that no one applies to take custody of your children. The courts may decide to give custody to someone in your family who really doesn’t want the responsibility or your children may end up in foster care.

When planning your estate try to choose guardians for your children who you know will want to take them. Don’t feel that you have to choose a family member; friends you trust can also be ideal candidates. Consider separating guardianship of your children from the assets of your estate. By naming someone other than the guardian to be the trustee of your children’s money you ensure that there are some checks and balances in place when it comes to deciding how that money is spent.

Always have a backup named for the guardian in the event that your first choice is unable to accept the role. Keep in mind that if you name a couple as the guardian the issue of their breakup may become an issue and this can lead to a legal battle for custody. For this reason alone it’s a good idea to name individuals as guardians. If you’re divorced, consider your ex-spouse as the guardian. Most of the time, your ex will want to have custody anyway. Why make it more difficult by naming someone else as guardian and risking a lengthy court battle?

Estate Planning for The Unpredictable

Once you reach retirement age it’s important that you have your estate planned so that you can enjoy those retirement years without having to worry about what will happen in the future. One of the biggest assets that you own will be your home. Your home is your biggest form of investment and gives you a great deal of security, especially if it’s been paid off completely. You can use your home as capital in your retirement years or you can leave it as an asset for your loved ones after your death.

If you’re a long time homeowner your home has no doubt increased in value since you purchased it. One option for increasing your assets is to sell your home and buy a home that is lower in value. The money that you make from the sale of your home can be invested elsewhere. For instance, you can sell your home and receive tax free gains if you invest in the right places. Talk to your financial planner about increasing your assets. This will benefit you during your retirement as well as leave more behind for your loved ones. Another option when you own a home is to sell your home to your children and then rent it back from them. This takes care of the transfer of ownership before your death and can provide you with tax savings. This option eliminates the need for property to be part of your will.

Planning your estate to deal with unpredictability is one way that you can protect your family if and when something happens to you. Estate planning is also important so that you protect your wealth. You’ve worked hard all your life to build up your assets. A correctly planned estate ensures that your later years in your life are comfortable and also ensures that you’re leaving your loved ones well taken care of after your death. Death without a will means leaving a mess behind you as your loved ones scramble to work out your finances. Without a will the state will determine what happens to your assets. Preparing a will won’t cost you a lot of money and is the only way that you can make sure that your wishes are carried out. Hire an attorney to help you work through the legal issues of preparing a will. Be sure to review your will once every couple of years so that you can make changes as circumstances in your life change. As well, find out if there are any new tax laws that will affect how your assets are distributed after your death.

Estate Planning For your Elderly Parents

Helping your elderly parents to plan their estate is one of the most important things that you can do. A well planned estate will ensure that your parent’s wishes are carried out as well as making sure that they receive the best care possible without putting a financial strain on you and the rest of your family. The first step to planning your parent’s estate is to talk to them about their wishes. Find out who they want taking care of them in a medical emergency. As well, talk about their financial affairs. Make sure that you stress the importance of making all these decisions before they have to be acted on in order to avoid confusion and pressure later on. Ask for the names of their attorney and financial planner so that you have them for your own records.

Designate one person who is in charge of your parent’s health care issues. This person should be chosen by your parents and be someone with whom they are comfortable and who they trust to take care of their best interests. Obvious choices are you, your siblings, or a close family friend. Always have a backup plan in place in case the first person chosen is unable to meet the responsibility. The second choice should be someone who is just as familiar with your parent’s medical and financial situation.

Discuss with your parents the benefits of having a living will. Emphasize that a living will is there as guidance for medical situations that may arise where your parents are unable to speak up for themselves. As well, you might want to talk about hospice care in the event that your parents require this type of medical attention. Make sure your parents understand that the bills will keep coming in even if one of them is ill. Talk with other family members to determine what will happen if your parents are unable to make their own decisions about finances and medical care. By researching information, such as the cost of home care, ahead of time both you and your parents will have a better understanding of what it will cost to take care of them.

When planning your parent’s estate make sure that the assets can be passed on the heirs of the will as fast and easily as possible. A good attorney can help you avoid tax penalties so more of your parent’s assets go the beneficiaries and less to the state. By ensuring that your parents have a legal will you’ll avoid all the legal hassles that come about when a will is lacking.

Estate Planning: When and Where to Start

Many people don’t know when and where to start when it comes to planning their estate. It seems there are so many things that you need to know about estate planning such as trusts to reduce taxes, issues about guardianship, and how to distribute your assets. And then you need to think about finding the time and money to hire a lawyer to help you draft a will. So where do you start? Perhaps the best place to start is simply by thinking about what you want to happen when you’re gone. Nobody likes to think about their own death. But death is an eventuality and needs to be planned for by everyone. The sooner you think about planning your estate the sooner you can act. Once you have your estate in order you’ll be able to enjoy your later years knowing that your family is taken care of in the way you want.

Organize and arrange all of your financial information. Take into account all of your assets as well as your debt. You need to have accurate information about how much your estate is worth. Remember to include your intangible assets such as any investments you’ve made, your insurance policies, any art collections you have, and your personal property such jewelry and furniture. When you have a full picture of what your estate is all about you can decide what’s at risk. A lawyer experienced in estates can help you draft your will. Some questions that you’ll want answered are whether or not your estate will be subject to taxes and whether it will have to go through a probate court. As well, find out what the risks are to your estate in the event that you’re incapacitated and unable to make decisions for yourself.

Talk to your family and discuss what effect your estate planning will have on them. Talk about their wishes and how they want to see your assets distributed. At the same time, make certain that you talk about your own wishes since what you want is just as important. The more you talk before your death the less likely there are to be problems after your death. If you think that there may be difficulties after your death regarding the decisions you’ve outlined in your will you can consider a Legacy Trust which will have a more advanced strategy for dealing with your assets. A Legacy Trust will be much harder for anyone to contest. Keep an eye on the future. Your estate will grow and change over time so it’s important that you review it on a regular basis.

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.