ALABAMA ESTATE PLANNING ATTORNEYS

 

Everything you own, from your house to your favorite watch, is considered part of your estate when you pass away. No matter the size of your estate, a well-crafted estate plan is crucial. This plan can be as simple as a will, powers of attorney, and a living will, or it can involve more complex trusts depending on your needs.

Having an all-embracing estate plan can prove to be very beneficial.  An estate plan drafted by a competent estate planning attorney can (i) coordinate what would happen with your home, investments, business, life insurance, and employee benefits, in the event you die or become disabled, (ii) ease the transfer of assets to your heirs, (iii) avoid unnecessary depletion of the estate by taxation, (iv) exempt the personal representative of the estate from requirements such as purchasing a bond and filing inventory, accounting or settlement during probate, (v) ensure that your assets are distributed in accordance with your personal wishes, (vi) provide instruction and guidance to your family and friends, (vii) prevent disputes between your loved ones and thereby avoid litigation costs, (viii) provide for succession considerations for businesses, (ix) make certain that minors and those with special needs are protected financially and otherwise, and (x) provide estate tax benefits.

A simple estate plan comprises of a will, durable power of attorney for health care, durable power of attorney for property and a living will.  A will is a legal document that allows a person to provide for the distribution of his or her assets after death.  A durable power of attorney for health care appoints a person designated by you to make decisions regarding your health care treatment in the event that you are unable to provide informed consent.  A durable power of attorney for property allows you to appoint a person to act for you and manage financial matters should you become unable or unavailable to do so.  A living will, also known as a directive to physicians, or an advance directive, provides doctors and hospitals with your instructions regarding the nature and extent of the care you want should you suffer permanent incapacity.

A complex estate plan involves living trusts and family limited partnerships.  A living trust is a relationship whereby one party (“settlor” or “grantor”) during his or her lifetime transfers real and/or personal property to a second party (“trustee”) for the benefit of a third party (“beneficiary”).  This trust relationship is governed by a document titled “trust agreement” or “trust declaration”.  A trust agreement outlines the identities of the settlor, trustee and beneficiary, and identifies how the trustee is to manage and distribute the property placed in the trust.  More than one individual or corporate entity can play the role of a trustee and a trust agreement can designate more than one beneficiary.  Further, the same person can be the settlor, trustee and beneficiary of a living trust. 

Generally, a living trust allows the settlor to also be the trustee and beneficiary of the trust.  This arrangement is advantageous as the settlor is not only able to control and manage the trust property but also benefit from any income of the trust property during his or her lifetime.  Further, a living trust permits the settlor to identify the people who can benefit from the trust property after the settlor’s death.  A commonly used example includes a living trust which (1) provides for the settlor during the settlor’s lifetime, (2) after the settlor’s death, provides for the benefit of the settlor’s surviving spouse, and (3) upon the death of the surviving spouse, distributes the trust property to their children and/or lineal descendants.  Settling a living trust during your lifetime can be extremely advantageous.  A living trust is considered the best tool to avoid probate.  The key to avoiding probate is that at the time of your death, you leave no assets in your name.  A living trust allows you to transfer all of your assets to the trust such that it is the trust that owns them and not you.  As a result, at the time of your death, you are left with no probate assets and hence there is no need to probate your estate.  The beauty of a living trust is that you are able to avoid probate and at the same time control and benefit from your assets.

Wills in Alabama

A will is a document that outlines the manner in which a person’s real and personal property is to be distributed upon his or her death. While a large number of people in Alabama put off the making of a will or consider themselves too young to have a will, it is imperative to create a will to avoid the uncertainty of property distribution, legal complications, and unnecessary expenses.

In the absence of a will, the property of a deceased person is distributed by a person, an administrator, appointed by the probate court, in accordance with a mathematical formula set by Alabama law. This formula does not consider your sentiments, wishes, or desires with respect to your assets. Such distribution of assets may also cause emotional distress among your family members and could lead to additional expenses when they turn to the court to fight over the distribution of your assets. This is also relevant if you have been previously divorced. Subject to some restrictions, a will provides you with the flexibility to dispose of your property after your death in a manner that is in accordance with your personal feelings. Additionally, in place of a court appointing an administrator, a will provides you with an option to choose the person whom you consider competent to manage your estate and trust to follow your wishes as opposed to the rules promulgated by the state of Alabama.

Why You Need a Will

If you have minor children, the absence of a will can be quite detrimental to your children, surviving spouse, and other family members. In the absence of a will appointing a guardian, it is the state of Alabama that decides which person will have custody of your minor children. This could result in your surviving spouse, his or her in-laws, and other family members fighting in court over the custody of your children, which not only drains the assets of your estate but destroys family relationships.

If you run a business in Alabama and you die without leaving a will, an administrator appointed by the probate court cannot carry on your business without express approval from such court. The probate court has limited authority to provide such approval and, in most cases, the business must be sold. A will drafted according to the laws of Alabama can provide for succession considerations for businesses.

Save Money

Having a well-drafted will can save you a lot of money. For instance, in the absence of a will, the probate court appoints an administrator to manage the distribution of the assets of your estate. This administrator charges a fee, which will be paid out of your assets. This fee can be avoided by the use of a will. According to Alabama laws, a will allows you to select a person to manage the distribution of assets and can contain a provision directing that such person shall not be paid any fee or only a small fee. Furthermore, if the probate court has to appoint an administrator, such administrator will be required by law to purchase a bond. The amount of the bond is determined based on the value of your estate and is paid from the assets of your estate. A carefully drafted will can, however, provide relief from having to purchase such a bond.

Furthermore, in Alabama, a will can also:

• Provide for certain assets to pass outside of the estate
• Reduce the amount of taxes to be paid
• Provide estate tax benefits

As you can see, there are numerous advantages to having a will. We recommend that anyone who owns property and/or has children must take advantage of this estate planning tool. If you are considering the benefits of having a will or if you have questions pertaining to a will, please call us for a free consultation.

To set up your free consultation, please contact us today at (205) 990-7000 or directly book your appointment here.

Powers of Attorney

A durable power of attorney is an authorization by which a person (principal) designates another person as his or her “agent” in writing or “attorney-in-fact” to act on the principal’s behalf in a financial, business, or legal matter. According to the laws of the state of Alabama, a durable power of attorney must contain words that demonstrate the intent of the principal that the authority conferred on the attorney-in-fact or agent is exercisable notwithstanding the principal’s subsequent disability, incompetency, or incapacity. In other words, depending on the writing, a durable power of attorney either continues to remain valid after the principal becomes incapacitated or becomes effective after the principal becomes incapacitated.

Our estate attorneys recommend that, where a principal has modest assets that do not justify a trust or property management by a court-appointed conservator, a durable power of attorney provides for an inexpensive, flexible, and private method to appoint another person to make legal and financial decisions on behalf of the principal. If you are interested in learning more about a durable power of attorney, please call us for a free consultation today.

Backed by more than 30 years of combined legal experience, our attorneys can help you draft your powers of attorney in a timely and professional manner. We have a firm grasp of this area of law and can protect your rights and best interests throughout the legal process. With Southern Estate Lawyers, you can count on us for reliable and effective representation.

To set up your free consultation, please contact us today at (205) 990-7000 or directly book your appointment here.

Living Will/Advanced Directive

Under Alabama law, a person (principal) may designate under a durable power of attorney another person (health care proxy) who shall have the authority to make health care decisions on behalf of the principal.

This durable power of attorney for healthcare is often referred to as a:

• Living will and healthcare proxy
• Advance directive for healthcare
• Declaration

The intent behind this law is that all adults have the right to control and/or direct the decisions relating to the rendering of their own medical care even when they subsequently become incompetent to actively participate in such decision making. Through a duly executed durable power of attorney for healthcare, the state of Alabama preserves the rights of a competent adult person to make written declarations about his or her health care decisions, including, designation of a health care proxy to make most medical decisions on behalf of the person, and whether medical procedures, life-sustaining treatments, and artificially-provided nutrition and hydration are to be provided, withheld, or withdrawn in instances of terminal conditions and permanent unconsciousness.

We believe a living will is the most important document in a healthcare plan. If you do not currently have a living will, you should contact one of our estate planning attorneys for a free consultation. Our lawyers are highly skilled and experienced in this area of law and we can help you create an effective and personalized living will today. Backed by over 30 years of combined legal experience, we have the knowledge to create a comprehensive estate plan quickly and efficiently.

To set up your free consultation, please contact us today at (205) 990-7000 or directly book your appointment here.

Trusts

There are many things that can help you decide whether to create a trust as part of your estate plan.  Talking to a trust attorney is the best way to find out if one or more trusts can provide you advantages that are worth pursuing.

Trusts are an estate planning tool that can be created for a variety of benefits.  They can shield your assets from taxes, provide for minor or disabled children, give you flexibility in naming beneficiaries and heirs, and create a method for giving to charities.  One of the greatest benefits of trusts is the ability to avoid probate.  Depending on which kind of trust you choose, you can still retain a great deal of control over your assets throughout your lifetime, even if they’re placed inside the trust.

Different Kinds of Trusts

A trust is a financial tool that you (the grantor) create allowing a third party (the trustee) to manage and spend assets to benefit a person, group of people, or charitable cause (the beneficiary or beneficiaries). Trusts can be set up in several different ways and can state specifically when and how you want the assets (or income from the assets) to pass to the heirs and/or beneficiaries.  A trusts attorney can help you create a trust that meets your specific goals.

While there are several different kinds of trusts, they typically fall into two categories – revocable and irrevocable.

A Living Trust

A revocable living trust is a relationship whereby one party (settlor or grantor) during his or her lifetime transfers real and/or personal property to a second party (trustee) for the benefit of a third party (beneficiary). This trust relationship is governed by a document titled “trust agreement” or “trust declaration”. A trust agreement outlines the identities of the settlor, trustee, and beneficiary, and identifies how the trustee is to manage and distribute the property placed in the trust. More than one individual or corporate entity can play the role of a trustee and a trust agreement can designate more than one beneficiary. Further, the same person can be the settlor, trustee, and beneficiary of a trust. An estate planning attorney can help you understand these trust agreements.

To set up your free consultation, please contact us today at (205) 990-7000 or directly book your appointment here.

About Revocable Living Trusts in Alabama

Generally, a revocable living trust allows the settlor to also be the trustee and beneficiary of the trust. This arrangement is advantageous as the settlor is not only able to control and manage the trust property but also benefit from any income of the trust property during his or her lifetime. Further, a revocable living trust permits the settlor to identify the people who can benefit from the trust property after the settlor’s death.

A common example used by an estate planning lawyer includes a living trust which:

• Provides for the settlor during the settlor’s lifetime
• After the settlor’s death, provides for the benefit of the settlor’s surviving spouse
• Upon the death of the surviving spouse, distributes the trust property to their children and/or lineal descendants

Settling a living trust during your lifetime can be extremely advantageous. A living trust is considered the best tool to avoid probate. The key to avoiding probate is that, at the time of your death, you leave no assets in your name. A living trust allows you to transfer all of your assets to the trust such that it is the trust that owns them and not you. As a result, at the time of your death, you are left with no probate assets and hence there is no need to probate your estate. The beauty of a living trust is that you are able to avoid probate and at the same time control and benefit from your assets.

Other advantages of a living trust include providing for:

• Minor children and loved ones who have special needs or are unable to manage their assets
• An immediate transfer of your assets to your loved ones upon your death
• Management of your assets in case of incapacity
• A reduction in estate taxes
• Privacy

As mentioned above, there are numerous benefits to settling a revocable living trust. If you are interested in learning more about living trusts and how to avoid probate then please call our estate planning attorneys for a free consultation. Our lawyers will be happy to address all your concerns and assist you in preparing a customized living trust to help achieve your goals. We proudly serve all of Alabama.

Irrevocable Trust

This type of trust can’t be changed by the grantor after it is created. While the absence of control is a drawback, the benefits may offset this. By transferring the grantor’s assets out of his estate, it may place the assets out of the reach of estate taxes and probate. To reduce estate tax liability, this may be an option to consider. It could also shelter assets from legal judgments against a person, and it can be a part of Medicaid planning.

Other kinds of trusts include:

Charitable Trusts

These trusts benefit a particular charity or the public at large.

Special Needs Trust

These trusts are created to provide in the future for children or other family members with special needs.  A special needs trust is typically set up for a disabled person who receives government benefits so that they are not disqualified from continuing to receive those benefits.

Tax By-Pass Trust

This trust allows one spouse to leave money to another spouse while minimizing the amount of federal estate tax.

Constructive Trust

Also called an “implied trust,” this trust is set up by a court, which decides that even though no formal trust was declared, facts show that the asset owner intended that property be used for a certain purpose or be given to a certain person.