Showing Love with Your Estate Plan

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Legal Matters

Brought to you by: Community Partner Holliman & Holliman, www.hollimanlegal.com

Community Partner Logo 22 FINAL 1Thinking of your loved ones? Do more than send them valentines and flowers. Use your estate plan to put your love into action.

If your spouse’s eyes glaze over when you want to talk about finances or estate plans, you can still make life easier for your spouse by organizing this info all in one place. Include an updated list of all your key contacts such as your accountant, financial planner or advisor, and estate planning attorney, and keep it in a place that your spouse would know to find it. Update your net worth statement with all accounts and assets the two of you own and make sure you include whose name(s) is on each account or asset. Be sure to include life insurance policy details, pre-paid burial plans, funeral preferences, and digital identity info such as online bill payments and passwords. Do not keep these files in a bank box.

Next, think about your adult children and their strengths and weaknesses. Talk to your estate planning attorney if one of them can’t manage money or has a stormy marriage that could end in divorce. If your adult children are your beneficiaries in your estate plan, you can build in protections from your child’s creditors or divorcing spouse by using the correctly structured trust. Consider if your children’s strengths make them good candidates to serve as your durable power of attorney, executor, healthcare power of attorney, or other roles that will become more important as you and your spouse age. Remember that your estate plan should address your late life as well as after you’re gone.

Next, think about your grandchildren and their future needs such as college, support if they are permanently disabled, and their interests in your hobbies or collections. Keep in mind that divorce decrees will impact their lives if they are part of blended families. Also, make sure that your estate plan addresses future grandchildren.  

You can’t control the future, but you can make sure that your estate plan expresses your deep love for your loved ones much better than a valentine covered with hearts. Changes in your financial affairs, your family members through deaths and divorces, and your designated agents occur more often than you think. Consult with your attorney especially if your estate plan needs to be updated, and then let your loved ones know just how much you love them.

Melanie B. Holliman-Melanie B. Holliman, JD

Partner at Holliman & Holliman, PLLC

www.hollimanlegal.com    

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

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When several members of a family work in the same business, just being family does not provide enough structure to handle succession planning or asset protection from creditors and taxes. A family limited partnership can also help avoid family contention. After all, disagreements over who is the favorite son, daughter, nephew, or niece are very common and can impact long-term relationships.

Families who share family businesses, real estate, publicly traded and privately held securities or other assets can use a limited partnership (LP) or limited liability company (LLC) to manage the business relationships among family members. When these assets are rapidly growing in value, families also use family limited partnerships for tax planning, creditor protection planning, and succession planning. 

A family limited partnership (FLP) is a holding company owned by two or more family members and has two classes of owners – general partners (GPs) and limited partners (LPs). The assets held in an FLP may be owned by different members of the family currently, and the FLP can be structured with pro rata shares of the FLP which can help with succession planning. The GPs, often parents, manage and control the FLP and its assets and may be the primary or only current owners of the business.  However, an FLP can also be structured to redistribute the ownership over time and define future GPs. The LPs are often the adult children or grandchildren of the GPs and are passive owners of the FLP. They have an economic interest and benefit from the FLP’s income, but do not manage or control the FLP. The LPs receive a pro rata share of the FLP’s income and are liable only to the extent of their investment in the FLP. This limitation of liability can be very valuable if the LPs’ personal assets differ a lot in size.

Obviously, a family limited partnership requires a good bit of thought and discussion with your family and your experienced estate and business planning attorney. Consider it as a New Year’s resolution to check into the possibilities for your family situation.

Melanie B. Holliman-Melanie B. Holliman, JD

Partner at Holliman & Holliman, PLLC

www.hollimanlegal.com    

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

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Legal Matters

Community Partner Logo 22 FINAL 1Brought to you by: Community Partner Holliman & Holliman, www.hollimanlegal.com

The value is so much more than the net dollars from assets minus liabilities. By keeping an accurate record of accounts, whose names are on the accounts, as well as the dollar value on a regular basis, you can make more informed decisions for the coming year, strategize for tax purposes, and make sure that your estate plan still reflects the beneficiaries you’ve chosen in case of a surprising demise.

With the major stock market changes recently, you may not be as well off as you think once you update your net worth. Meeting with your financial advisor to consider rebalancing your portfolio before the end of the year could improve your tax situation next April. If your asset protection plan contains a donor-directed trust fund, you may find you have fewer assets to donate this year. Checking the current dollar value of your assets also assesses if your estate plan still prorates the shares you want each beneficiary to receive as inheritances. If you are lucky enough in have major increases to your net worth, you may want to look into trusts with your estate planning attorney to protect privacy from probate which is public record.

Life happens when you blink. Think back over this year. You may have changed banks, bought or sold a house or property, added new family members through marriages or births, lost family members through divorces or deaths, changed jobs, and other major changes. These factors may require adjustments to your estate plan, and the sooner the better considering the “triple-demic” expected this winter – COVID, pneumonia, and influenza – any of which could take out someone of any age. Many pundits suggest you run your personal finances like your own business… well, it is your business! A regularly updated net worth helps you do just that.  Regardless of the size of your net worth, it’s good to know if you are growing your estate, treading water, or sinking into debt. A year-end net worth review can help you make decisions regarding big purchases, vacations, or even new job opportunities. Consider your team of advisors as your board of directors – financial advisor, accountant, and of course, your estate planning attorney. Let them help you run the “business” side of your life in the direction you want to head. Now that’s the added value of a net worth summary updated year after year.

Melanie B. Holliman-Melanie B. Holliman, JD

Partner at Holliman & Holliman, PLLC

www.hollimanlegal.com    

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

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Legal Matters

Community Partner Logo 22 FINAL 1Brought to you by: Community Partner Holliman & Holliman, www.hollimanlegal.com 

Have you seen U.S. Marine Corps Base Camp Lejeune in the news recently? On August 10, 2022, President Biden signed the PACT Act of 2022 or its full name, The Sergeant First Class (SFC) Heath Robinson Honoring our Promise to Address Comprehensive Toxics (PACT) Act. This law made sweeping new changes to help Veterans and others get the benefits they deserve. 

Let’s compare what benefits were available and to whom prior to this law and what benefits are now available and who is eligible for them related to Camp Lejeune. Between specific dates in 1953-1987, hundreds of thousands of people at Camp Lejeune drank and bathed in the water including Veterans, their families, workers, and service people. Prior to the PACT Act and beginning as late as 2017, if you were a Veteran, a Reservist, or a Guardsman with an illness that the Department of Veterans Affairs (VA) considered to be a “presumptive illness,” you only had to prove you had the disease and you were at Camp Lejeune in the required time period. In other words, normally a “connection” or “nexus” between your injury or illness and your military service is required, but with the PACT Act, the VA automatically assumes the connection.  

After your claim’s evaluation, you were awarded a disability rating between 0% and 100%. If you had other illnesses or injuries, these could be combined to get a higher rating. For example, if you retired from the military and were awarded a 40% rating, you could receive your retirement pay and service-connected disability benefits at the same time. One needs to achieve or be awarded a 50% rating to get both retirement pay and service-connected disability benefits at the same time. With proper application and proof, family members of service members with one of these presumptive illnesses could receive health benefits, too.  

Enter the Pact Act of 2022. This act provides the ability to sue the federal government for the suffering and loss associated with exposure to these toxic chemicals in the water at Camp Lejeune. As a Veteran, you may very well have both avenues open- a service-connected claim and a lawsuit- even if you were previously denied a service-connection for this type of claim. It’s extremely important that you carefully research for an attorney with the right expertise to help you with these claims.  

Legal Matters John Holliman Headshot-John R. Holliman, JD

Partner at Holliman & Holliman, PLLC

www.hollimanlegal.com

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

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Community Partner Logo 22 FINAL 1Brought to you by: Holliman & Holliman, LLC, Estate Planning, hollimanlegal.com 

October is a busy month with art festivals and Halloween, but it is also the month for Mental Health Awareness Week on October 2-8, Stroke Prevention Day on October 29, and Domestic Violence Awareness recognized with purple ribbons all month. These three situations have legal protections that you should know if a family member or heir has one of these issues.

Domestic Abuse. In a domestic abuse situation, the abuser often attempts to control and dominate the victim mentally, physically, and financially. Preventing an abuser or spendthrift spouse from access to an inheritance gives your heir more power and options. A good estate planning attorney can create a spendthrift trust in your estate plan for an adult heir with an abusive spouse or mental health issues. If your adult heir is the one with spendthrift tendencies, a spendthrift trust can protect the adult heir, too. 

Mental Health. According to John Hopkins Medicine, one in four Americans have a diagnosable mental disorder. A durable power of attorney and healthcare power of attorney for a family member or heir with mental issues can help in future crises. Thinking long term with no crisis in sight, one grandmother set up a trust in her estate so that her grandson with significant mental disabilities would be cared for by a guardian and conservator long after she was gone. The parents were not viable options. An estate planning attorney can advise you about whether a guardian or a conservator is right for your situation.

Stroke. The CDC reports that in 2020, someone in the U.S. has a stroke every 40 seconds or about 795,000 people a year. Strokes remain a leading cause of death even though huge advances in treatment now exist. A complete estate plan including financial and healthcare power of attorney and healthcare directive can be invaluable when an individual has a stroke. While the stroke victim is in rehab, the financial power of attorney ensures that bills are paid. If the stroke victim doesn’t recover, the healthcare directive and healthcare power of attorney allow someone to make the hard decisions about life support based on the stroke victim’s preferences. And with about 37% of Americans living alone, it’s important to have an estate plan in place to manage any eventuality.

Make sure your estate plan can manage these situations.

Melanie B. Holliman-Melanie B. Holliman, JD

Partner at Holliman & Holliman, PLLC

www.hollimanlegal.com

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

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Legal Matters

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Community Partner Logo 22 FINAL 1Yes, 70 may be the new 50, and grandparents are redefining their roles by living more active and longer lives. More often than you might think, adult grandchildren are faced with helping their grandparents plan their golden years. Families are getting smaller and live so far away that your parents or siblings may not be available to take care of grandparents. In fact, your grandparents may be more open to sharing and working with an adult grandchild on their plans than with their own children. Consider these three key areas for subtle discussions with grandparents.

1. Independence. Many grandparents strongly prefer to live in their own homes as long as possible and do not want to move in with any of their children. You could gently encourage your grandparents to consider other options by taking “field trips” to visit independent care, assisted living, and nursing homes nearby. Take careful note of their preferences.

2. Healthcare. Find out if your grandparents have long-term care policies. Make sure each has a current Durable Powers of Attorney (with a backup!), Power of Healthcare decisions, Advance Directives for healthcare, living wills, possibly DNR orders (do not resuscitate) to share with doctors and medical facilities, and prepaid burial plans, plots, or other plans such as donating their bodies to medical research. A current list of medications is always handy for doctor visits as well as medical emergencies.

3. Financial Affairs. Make sure your grandparents have someone set up with financial power of attorney to handle bills when needed. Remember that the various powers of attorney can be split among people with different expertise. You can learn who your grandparents’ team is — CPA, investment advisor, estate planning attorney, and executors — without necessarily getting “into their business.” Asking for their recommendations for your own plans is a great conversation starter.

Make sure that their financial management is still good. Some studies found that financial literacy peaks in the late 40s or 50s and declines after 60. On the flip side, financial confidence increases up to age 85. Now that’s a potential problem! One adult son had to file for conservatorship when his 86-year-old dad started giving inordinate amounts of money to a caregiver of his invalid wife. You are truly blessed if you have grandparents, so take care of them!

Melanie B. Holliman-Melanie B. Holliman, JD 

Partner at Holliman & Holliman, PLLC

www.bradfordholliman.com

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

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Legal Matters 

Brought to you by: Community Partner Bradford & Holliman, www.bradfordholliman.com 

Community Partner Logo 22 FINALWhile attending a baby shower, a friend in her late 60s wondered if the parents-to-be had taken time to consider very carefully who they would like to be their baby girl’s guardians if they were both gone. That’s so much more important that the nursery wall color.

Sometimes a guardian choice is obvious such as a sibling whose parenting style you like. But siblings often live far away. Perhaps close friends are better choices so your children would already know them well, and your children’s day-to-day life would have more continuity after major trauma. If you’ve set up trusts for your children through your estate plan, the trustee is another possible guardian. However, you may like your trustee’s financial expertise more than their parenting expertise.

Not only is selecting potential guardians for your children a major decision, but your will should include at least two backups of either couples or single individuals. When reviewing their five-year-old will, one couple was stunned to realize that of the three couples they had selected, all three were now in drastically different situations. The wife of their primary choice had died, and her husband was dealing with grief and had moved to Georgia. Their secondary choice had divorced and had a complicated relationship. The third couple had divorced, and both had married other people. This situation is a perfect example of why we encourage clients to review their wills at least every three years.  

Your own life may change in ways that should trigger a reassessment of your choices of guardians such as moving to a different state. If you have more children, perfectly competent guardian possibilities with larger families of their own may become inappropriate because they would be stretched too thin to raise your children, too. Obviously, you need to keep your wills updated. Long before you meet with your estate planning attorney, talk seriously with each potential guardian, and get their agreement to serve as guardian. Ask them to let you know if their situation changed in ways that would prevent them from accepting the responsibility. And then update your will.

Melanie B. Holliman-Melanie B. Holliman, JD 

Partner at Holliman & Holliman, PLLC

www.bradfordholliman.com

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

 

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Legal Matters

Brought to you by: Community Partner Holliman & Holliman, www.bradfordholliman.com 

Community Partner Logo 22 FINALVeterans and their families make up nearly 400,000 of Alabama’s population which ranks 7th highest per capita in the nation. The Veterans Administration (VA), several non-profit and volunteer organizations, and VA-accredited Alabama elder law attorneys help veterans understand Alabama’s VA benefits. 

VA-accredited Alabama elder law attorneys develop strategies that consider veteran benefits and any civilian work benefits both while the veterans are alive (disability benefits) and for their families, after they are gone (Aid and Attendance). These attorneys can assess veteran benefits in the context of long-term care, Alabama Medicaid, asset protection, conservatorships, wills, and trusts.  

The attorneys can explain both pension and service-connected claims and Department of Defense benefits so that a veteran can make the best choices at the right times. Sometimes, a non-service-connected pension is a better choice. Without understanding CRSC (Combat-Related Special Compensation) and CRDC (Concurrent Retirement and Disability) payments, a veteran could lose out on benefits. Many veterans are eligible for Tricare for Life or CHAMPVA health insurance which provide important free health coverage. VA Dependency and Indemnity Compensation (VA DIC) is best known for benefits for veterans’ surviving spouses and children, and perhaps “loco parentis.” It is easy to miss these options without VA-accredited legal advice. An article by Military.com outlines other Alabama veteran benefits including:

  • Ad valorem property tax exemption on home and 160 acres if the veteran meets certain criteria
  • Ad valorem property taxes exemption on VA-specially adapted homes
  • State, county, and city income tax exemption on military pay, survivor benefits
  • No license or ad valorem tax on motor vehicles paid by VA
  • 5 points added to state employment exam scores, and 10 points for spouse of certain disabled or deceased veterans
  • Tuition waiver for Purple Heart Medal recipients to two and four-year technical, community, or junior colleges
  • Alabama GI-dependent scholarship that waives $250 per semester hour and $1,000 for books per semester for up to five years if certain criteria are met
  • Free admission to state parks
  • Discounted fishing licenses to 20% disabled veterans
  • Special hunting license for disabled veterans
  • In-state license fees for non-resident active-duty military and families
  • Free retired military pistol permit
  • Alabama State Veterans Cemetery in Spanish Fort, Alabama

Alabama’s four existing VA homes have waiting lists ranging from 80 to 350+. With projections of 1,440 veterans needing care by 2045, the Alabama Department of Veterans Affairs is building a fifth veterans’ home for long-term care located in Enterprise that will house some 175 veterans after it opens in 2023. If you are a veteran or a veteran’s family, thank you for your service! Please consider talking to a VA-accredited attorney about your VA benefit options soon.

Melanie B. Holliman-Melanie B. Holliman, JD 

Partner at Holliman & Holliman, PLLC

www.bradfordholliman.com

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

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Legal Matters

Brought to you by: Community Partner Bradford & Holliman, www.bradfordholliman.com 

Two axioms that we estate planning attorneys know only too well are that “no one knows his expiration date,” and “no one checks out leaving a clean desk.” However, you should still leave an estate plan that your executor and heirs can use to finalize your affairs. You also need to designate a personal representative who can oversee your affairs even if you’re incapacitated. Here are six reasons why a very key component of your estate plan is a current list of passwords and accounts to manage your digital identity. 

Community Partner Logo 22 FINAL1. Online orders: If you have standing repeat orders for items such as pet supplies or your favorite bagels, keep previous invoices to help your personal representative cancel the orders. 

2. Online banking and autopay bills: In most cases, utilities, insurance premiums, car, and mortgage payments need to be kept paid if you are incapacitated. In the case of your demise though, certain payments will need to be canceled. Leave details with your papers.

3. Social media accounts: You can now designate someone to oversee these accounts in their settings.

4. Online access to financial accounts and health insurance: A durable power of attorney helps, but having the company names, accounts, passwords, and type of account will help, especially if needed for your care.

5. Two-step encryption: This security tool is used increasingly to thwart hackers of online services. Make sure your personal representative’s email and cell phone are set up as options within the accounts. 

6. Device Passwords: When one 45-year-old died unexpectedly, her executor was left with a smartphone full of photos that are not accessible and a two-month-old tablet that cannot be re-used. Ten months later, the executor is still trying to get these devices unlocked through the manufacturers so that they can be cleaned and resold. 

If you are a very private person, store this information in a sealed envelope with your personal representative or executor right along with your Durable Power of Attorney, Healthcare Directive, and Last Will. And be sure to update the info regularly. You’ll have the peace of mind that your affairs will be easier to manage for your personal presentative or executor. 

Melanie B. Holliman-Melanie B. Holliman, JD 

Partner at Holliman & Holliman, PLLC

www.bradfordholliman.com

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

 

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Legal Matters

Brought to you by: Community Partner Holliman & Holliman, www.bradfordholliman.com

Two major new chapters of life are newly graduated seniors heading off to college and mature seniors retiring and downsizing their homes to retirement communities or even assisted living. Both new chapters need a fresh look at estate plans.

Community Partner Logo 22 FINALLate Teens. For the late teen heading off to college for the first time, a healthcare and durable power of attorney is critical. Students who go to college in other states may suddenly become adults legally meaning that parents have less authority to handle medical emergencies or finances. For example, Alabama’s age of majority is 19 while Tennessee, Georgia, Florida, and Louisiana’s age of majority is 18, and Mississippi’s age is 21. If a college student’s parents have been serving as custodians of a Uniform Transfers to Minors Act (UTMA) account, their custodial role ends when the student becomes a legal adult. The student now has complete control of the account. A durable power of attorney authorizes parents to continue directing investments and expenditures on behalf of their student. A will is also advisable unless the parents want their student’s assets to revert to them if the student were to die intestate (with no will).  For example, one adult college student set up his will naming his younger brother as the beneficiary of his “college account.”

Mature Seniors. If mature seniors have moved to Alabama from another state (and many do!), a local estate planning attorney can advise them about key differences in estate law. Pension beneficiaries should be checked, and new addresses provided to the former employers. An old estate plan should be cleaned up eliminating guardianship terms for minor children who are now fully grown. All beneficiaries, trustees, and executors should be verified and updated. Although Alabama does not require an executor to be an Alabama resident, an executor who lives near you is usually best. Terms relating to incapacity should define who will serve as either trustee or personal representative, keeping in mind who is qualified and nearby. When mature seniors set up new accounts, careful thought should be given to the beneficiaries so that it aligns with the rest of their estate plans.  

New chapters of life are exciting and sometimes scary, but a good estate planning attorney can make sure that your legal affairs are in order to address the new chapter… and that offers peace of mind.

Melanie B. Holliman-Melanie B. Holliman, JD 

Partner at Holliman & Holliman, LLC

www.bradfordholliman.com

205-663-0281

No representation is made that the quality of the legal service to be performed is greater than the quality of service performed by other lawyers.

 

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