Using a Trust to Protect Your Children from Divorce & Creditors

Using a Trust to Protect Your Children from Divorce & Creditors

Legal Matters

presented by: Bradford & Holliman, Estate Planning

Parents frequently ask us how they can leave their assets to their children when they die without those assets being vulnerable to a child later divorcing or having problems with debt. The sentiments expressed by the parents are almost always the same: “We want our child to have our assets, we do not want an ex-spouse or creditor to have our assets.”

The typical Last Will and Testament that leaves everything to the child or percentages to children cannot provide this kind of protection because once the assets become the property of a child, they become subject to the laws governing divorce or other debt collection. However, parents can create trusts to hold the assets they leave for children that will protect the assets from divorce or other creditors. These trusts can be set up to provide assets to a child as needed. Since the assets are not placed into the child’s name, the assets do not become the property of the child which would be subject to division or seizure. Of course, not all trusts can accomplish this goal. The trust must contain the right provisions and restrictions to accomplish asset protection for a child.

Parents may choose to use a Last Will and Testament that has the proper trust provisions inside the Will; or, they may choose to use a Revocable Living Trust that completely avoids the probate court process at death while providing protection for the heirs. If you wish to provide protection for children or other heirs, talk with your estate planning attorney to determine the best way to achieve your specific goals.

Melanie Bradford Holliman 

Partner, Bradford & Holliman, LLC

Practice focuses on estate planning, elder law and special needs trust.

2491 Pelham Parkway, Pelham, Ala. 35124

205-663-0281, www.bradfordholliman.com

This article is for educational purposes and is not intended for specific legal advice.

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Driving Under the Influence: Alabama’s DUI Laws

Driving Under the Influence: Alabama’s DUI Laws

Legal Matters

presented by: Frank S. Buck P.C., Personal Injury

 We all know that driving while under the influence of alcohol and other illicit substances is unwise at best. Not only does it place the inebriated driver in danger, but it also imperils everyone else on the road. According to the Center for Disease Control, approximately one in three traffic deaths in the United States involves a drunk driver, and 28 people die each day as a result of drunk driving. Alabama has severe penalties for driving under the influence (DUI), which everyone planning to drive after a night of drinking must be aware of.

If a police officer pulls you over and suspects you of driving under the influence, a breathalyzer test will be administered. In every state, it is illegal for people over the age of 21 to drive with a blood alcohol level at or above 0.08%. Under “zero tolerance” laws, which aim to discourage underage drinking, it is illegal for anyone under the age of 21 to drive with a blood alcohol level at or above 0.02%. While factors such as gender, weight, and food intake all affect blood alcohol level, a general rule of thumb is that, if you have three servings of alcohol in rapid succession, you are above the legal limit. One serving of alcohol is equivalent to one 12-ounce beer, one 4-ounce glass of wine, or one 1.5 ounce shot of distilled liquor.

A first-time DUI charge carries the following administrative and criminal penalties: a monetary fine between $600 and $1,200 in addition to a 90-day driver’s license suspension. The first offense typically does not involve any jail time. If another DUI charge is incurred within five years of the first, the penalties for the second offense increase substantially; the fine rises to between $1,100 and $5,100, the license suspension goes up to a year, and there is a minimum of five days in jail. Likewise, the penalties for any further charges increase if incurred within five years of the previous one.

In addition to these administrative and criminal penalties, driving while under the influence of alcohol will dramatically increase civil liability for any accidents you may cause while in that condition. The bottom line is that it is never worth it to drive after drinking; always remember to call a cab or have a designated driver at the ready. Drunk driving is simply not worth the risk, legally or morally.

Frank S. Buck, P.C., Attorneys at Law have been offering professional legal services and serving Alabama citizens for over 40 years. We have experienced trial attorneys who have over 89 years of combined trial experience.  You can reach us 24 hours a day at (205) 933-7533.  Please call us for a free consultation.

Read more from Frank Buck at www.BirminghamChristian.com. Click on News/Family/Legal Matters.

 

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5 Steps to Handling Finances When Your Spouse Has Died

5 Steps to Handling Finances When Your Spouse Has Died

Money Matters

Losing a spouse is a stressful transition, and the added pressure of having to settle the estate and organize finances can be overwhelming. Fortunately, there are steps you can take to make dealing with these matters less difficult.

  1. Notify others. When your spouse dies, your first step should be to contact anyone who is close to you and your spouse, and anyone who may help you with funeral preparations. Next, contact your attorney and other financial professionals. These professionals can help you prepare to contact life insurance companies, government agencies, and your spouse’s employer for information on how you can file for benefits.
  2. Get advice. Getting expert advice is essential. An attorney can help you go over your spouse’s will and start estate settlement procedures. Your funeral director may help you obtain copies of the death certificate and applications for Social Security and veterans benefits. Your financial advisor or life insurance agent can assist you with the claims process.
  3. Locate important documents and financial records and keep them organized. Before you can begin to settle your spouse’s estate or apply for insurance proceeds or government benefits, locate important documents and financial records. You may need to obtain certified copies of certain documents. For example, you’ll need a certified copy of your spouse’s death certificate to apply for life insurance proceeds. To apply for Social Security benefits, you’ll need to provide birth, marriage, and death certificates. Having all of the information you need when you need it is important. Start by organizing all the documents by topic area, setting up a file for each. For example, you may want to set up separate files for estate records, insurance, government benefits, tax information, etc. Store your files in a safe but readily accessible place.
  4. Evaluate short-term income and expenses. When your spouse dies, you may have immediate expenses to handle, such as funeral costs or credit card debt. If you expect money from an insurance or estate settlement, it may take time for this money to arrive. Don’t panic- you have several options. If you are a beneficiary of a life insurance policy, you may be able to get the life insurance proceeds soon after you file or ask the insurance company if they’ll give you an advance. In the meantime, you can use credit cards for certain expenses, take out a cash advance against a credit card, or negotiate with creditors to allow you to postpone payment of certain debts for 30 days or more, if necessary.
  5. Avoid hasty decisions. Don’t think about moving from your current home until you can make a decision based on reason rather than emotion. Don’t spend money impulsively, or loan money to others without reviewing your finances first. When you’re grieving, you may be especially vulnerable to pressure from salespeople or others. Finally, don’t make quick decisions about your investment portfolio. Take time to create a financial plan to fit your new life and make sure you are comfortable with the amount of risk you are taking. This may change over time.

Mike Mungenast, Sr. Vice President, Senior Advisor 

Vision Financial Group 

4505 Pine Tree Circle, Birmingham, AL 35243

205-970-4909, www.vision-financialgroup.com

 

 

Prepared by Broadridge Communication Solutions, Inc.

Investment advisory services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor.  Securities offered through ProEquities Inc., a registered broker-dealer and member of FINRA and SIPC.  Vision Financial Group, Inc. and West Alabama Bank are independent of ProEquities, Inc. Securities and insurance products offered are not bank deposits, have no bank guarantee, are not FDIC insured, and may lose value.

 

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Avoiding Probate When You Die: The Benefits of a Revocable Living Trust

Avoiding Probate When You Die: The Benefits of a Revocable Living Trust

Legal Matters

presented by: Bradford & Holliman, Estate Planning 

Many people prefer to avoid the probate court process stating that they want to avoid the time constraints the court system imposes before distributing to beneficiaries, the cost, and the fact that the contents of a Will are available to the general public for review.  Some try to outsmart the system by making gifts to children and others before death. However, this can have adverse tax consequences. Additionally, gifting is a poor option if there is a need to control how the beneficiary uses the money and assets after your death. For example, do you want your assets to be controlled by a trusted person for a beneficiary if you die or do you want your assets controlled by your ex-spouse for the benefit of your minor child? Do you want to leave assets to your child; but, not to the child’s ex-spouse in the event of a divorce?  Do you have an adult child that has substance abuse issues or poor money management problems? Are you worried that your spouse might re-marry and not leave your assets to your children?

An appropriate option to avoid probate and to address all of these complicated issues is the use of a revocable living trust. The trust is a contract that you create that has the terms that would normally be contained in a Will. At death, the person you name as a successor trustee steps into the role of trustee and begins to carry out the document according to its instructions without court interference. Your wishes can be implemented quickly and privately. Further, the cost is generally much cheaper than the cost of probating. A trust, allowing you to avoid probate and create conditions for how and when money and assets are to be used or given to beneficiaries can be complicated; but, an experienced estate planning attorney can help you to create a plan that will carry out your wishes and make it easy on your family at your death.

Melanie Bradford Holliman 

Partner, Bradford & Holliman, LLC

Practice focuses on estate planning, elder law and special needs trust.

2491 Pelham Parkway, Pelham, Ala. 35124

205-663-0281, www.bradfordholliman.com

This article is for educational purposes and is not intended for specific legal advice.

 

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The Probate Process: What Happens When You Die

The Probate Process: What Happens When You Die

Legal Matters   

Most people know they should have a Last Will and Testament. What they do not know is what happens after the testator (the person) dies.

A Will does not avoid the probate process. Instead, it works to make the process easier for the Personal Representative (also called the “Executor”). Of course, it also allows the testator to state who receives property/assets and who does not.

When a person dies, property within the estate is controlled by the Will. The Personal Representative must petition the court to accept the Will. Once the court accepts the Will as a valid document, the Personal Representative must notify any creditors that the estate is open so claims can be filed with the court. A publication notice is used to notify unknown creditors that an estate has been opened. Creditors have six months to file claims with the court. After the time for claims has passed, the Personal Representative pays any valid claims and begins the process of distributing property according to the terms of the Will.

At best, an estate can be closed within seven months; and, at worst, the estate may be open for years. Fees and costs for an estate range between 4% and 9% of the value of the estate. In other words, while the preparation of a Will can be relatively economical, probating the estate may be very expensive. Further, the entire process is public record and may be reviewed by anyone that wishes to view the court file. Finally, a Will must be probated in every state where property is held. If the testator owns property in several states, the time to wrap up the estate, fees and costs significantly increase.

Next month we will look at how to avoid probate.

Melanie Bradford Holliman 

Partner, Bradford & Holliman, LLC

Practice focuses on estate planning, elder law and special needs trust.

2491 Pelham Parkway, Pelham, Ala. 35124

205-663-0281, www.bradfordholliman.com

This article is for educational purposes and is not intended for specific legal advice.

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No-Doubt Liability & Contributory Negligence in Auto Accidents

No-Doubt Liability & Contributory Negligence in Auto Accidents

Legal Matters 

presented by: Frank S. Buck P.C., Personal Injury

Automobile accidents are typically litigated under the theory of negligence. Negligence requires four basic elements: a duty, breach of that duty, causation, and damages. Under Alabama law, drivers owe a duty to others on the road to drive with reasonable care. Essentially, we all must act as a reasonable person would when driving. Breaching that duty by driving carelessly, such as by texting while driving or taking one’s eyes off the road for a protracted period, may cause an accident and result in damages. If someone drives in an unreasonable manner and hits another vehicle because of it, that person is legally liable for the resultant damages. The determination of liability depends on the facts of each case, and establishing liability can be difficult at times. However, certain types of automobile accidents leave little or no doubt as to who is at fault; this is sometimes known as “no-doubt” liability. If a driver hits you from behind, or rear-ends you, while you are stopped, it is almost never considered your fault. The Alabama Rules of the Road require a vehicle to be able to stop safely whenever traffic has come to a halt ahead of it. To this end, drivers must leave sufficient braking distance between their cars and those ahead of them. The damage to the vehicles is particularly telling in such cases; the front of the vehicle that rear-ended another will be damaged, while the back of the vehicle that was rear-ended will be.

While liability is usually not disputed in rear-end automobile accidents, there are exceptions. Alabama is a pure contributory negligence state, meaning that, if an accident is even 1% your own fault, you cannot recover money from the one who hit you. If a driver fails to act with reasonable care and is hit by another driver, their own negligence may prevent a successful lawsuit, even if the accident was technically or mostly the fault of another. Essentially, drivers must take reasonable steps to protect themselves from harm while driving. For example, in a rear-end case, if the vehicle that was rear-ended has malfunctioning taillights, that is considered negligence on the part of the driver, and it will bar recovery under the theory of contributory negligence. In sum, always make sure to drive carefully, pay attention to the road and other vehicles, and make sure to keep your taillights in working order.

Frank S. Buck, P.C., Attorneys at Law have been offering professional legal services and serving Alabama citizens for over 40 years. We have experienced trial attorneys who have over 89 years of combined trial experience. You can reach us 24 hours a day at (205) 933-7533. Please call us for a free consultation.

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Estate Planning for a Single Person

Estate Planning for a Single Person

Legal Matters

presented by: Bradford & Holliman, Estate Planning

If you are single, you may not think you need to plan your estate, but single people are in as much need of a plan as anyone else. Estate planning not only involves determining where your assets will go when you die — it also helps you plan for what will happen should you become incapacitated, perhaps as the result of a stroke, dementia, or injury. If you don’t make a plan, you will have no say in what happens to you or your assets.

Without a properly executed will in place when you die, your estate will be distributed according to state law. If you are single, most states provide that your estate will go to your children, parents, or other living relatives. If you have absolutely no living relatives, then your estate will go to the state. This may not be what you want to have happen to your assets. You may have charities, close friends, or particular relatives that you want to provide for after your death.

If you become incapacitated without any planning, a court will have to determine who will have the authority to handle your finances and make health care decisions for you. The court may not choose the person you would have chosen. In addition, going to court to set up a guardianship is time-consuming and expensive. With proper planning, you can execute a power of attorney and a health care proxy, which gives the people you choose the authority to act on your behalf, as well as an advance directive giving instructions on what type of care you would like. The power of attorney can also dictate exactly what powers the individual has and for how long these powers are valid.  Granting these powers to an individual should be carefully considered and discussed with an attorney to make certain you are granting necessary and useful powers to the individual of your choice.  We often see documents that do not grant the appropriate powers which may force the family to seek court authorization because of a poorly prepared power of attorney.

Single individuals who are divorced need to make especially certain that the beneficiary designations on their IRAs, life insurance policies, and relevant bank accounts are up to date. If you don’t, your ex-spouse could get the funds. And for single people of means, opportunities to avoid state or federal estate taxes can be more limited than for married couples, although advance planning can close the gap.

Melanie B. Bradford

Partner, Bradford & Holliman, LL

Practice focuses on estate planning, elder law and special needs trust.

2491 Pelham Parkway, Pelham, Ala. 35124

205-663-0281, www.bradfordholliman.com

This article is for educational purposes and is not intended for specific legal advice.

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Legal Matters: Bradford & Holliman, Estate Planning

Legal Matters: Bradford & Holliman, Estate Planning

Family Drama & Estate Planning

Families have drama. It is probably safe to say that all families have some sort of drama even if they appear perfect to everyone else. With drama comes chaos, misunderstandings, arguments and even permanent damage to the integrity of the family.

Drama may come in many forms. Blended families are ripe for serious conflict and devastating results upon the death of a parent/spouse. Further, in blended or traditional families, there may be a child with serious debt issues, a controlling and manipulative spouse, substance abuse issues, mental health problems, stealing, physical abuse, or even general disrespect toward the family. A child may be enabling a grandchild that has some of these issues; or, it may consist of countless other possibilities.  Regardless of the type of drama, the problem remains the same: how does the parent structure the estate plan to account for these problems?

Parents may choose to leave assets to their spouse and children and let them “fight it out” or “spend it all.” However, many parents desire to benefit their loved ones while attempting to control or lessen the drama that is expected. While totally eliminating drama is not likely, a well-developed estate plan can address many of these problems and impose conditions or restrictions on the control and use of assets. A good estate plan can protect spouses, children from creditors, divorcing spouses; or, perhaps more importantly, from the child’s own destructive habits. Parents should give serious thought to their family’s dynamics and work with an estate planning attorney to create an estate plan that suits the needs of the family by distributing assets to the spouse, children and other individuals the parents’ desire while also providing the necessary degree of protection and oversight.

Melanie B. Bradford 

Partner, Bradford & Holliman, LLC

Practice focuses on estate planning, elder law and special needs trust.

2491 Pelham Parkway, Pelham, Ala. 35124

205-663-0281, www.bradfordholliman.com

This article is for educational purposes and is not intended for specific legal advice.

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Legal Matters: Frank S. Buck P.C.

Legal Matters: Frank S. Buck P.C.

Have You Been Injured at a Business?  

Did you know that if you are injured at a business you may have a personal injury claim? Property owners have a duty to people entering their premises to keep them safe from harm. In Alabama personal injury cases where people are injured due to the negligence or fault of a business are called premise liability cases.

What are examples of premise liability cases? Premise liability cases include a wide array of cases where a person is injured at a business. Common examples of these cases include a slip and fall at a grocery store, in a parking lot or in a restaurant, being burned by hot coffee, being injured on defective stairs, falling in unseen ice, sitting in a chair that breaks or a table at a restaurant breaking and causing injuries.

However just because you are injured at a business, you do not automatically have a claim. There are laws in Alabama to protect businesses so that they are responsible only for injuries that they caused or could have prevented. In Alabama, in order to have a successful premise liability personal injury claim, you must prove that a business owner knew or should have known that a dangerous condition or defect existed on their premises that could cause harm to customers or people on the premises. There is also a law in Alabama, that the dangerous condition on the premises must not have been open and obvious to the injured person. This means if a condition such as a spill was clearly visible and obvious and the injured person fell merely because he or she was not paying attention or was clumsy, the business is not liable or responsible for that person’s injuries. Any person entering a premises or business is responsible to pay attention to their surroundings. Our office currently handles a large number of these cases each year.

Frank S. Buck, P.C., Attorneys at Law have been offering professional legal services and serving Alabama citizens for over 40 years. We have experienced trial attorneys who have over 89 years of combined trial experience.  You can reach us 24 hours a day at (205) 933-7533.  Please call us for a free consultation.

 

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