Alabama Estate Planning Blog

New Year, New Law

2011-12-11T05:08:00.002-06:00

The turn of the calendar year signifies a lot of change in society. The first of the year also brings with it many new laws going into effect on January 1. Alabama has adopted a new Power of Attorney Act, which will apply to all powers of attorney executed on or after January 1, 2012. Some significant changes include:

1. Powers of Attorney are Presumed “Durable”

Under prior law any authority granted under a power of attorney would immediately terminate upon the incapacity of the principal. In order to allow a power of attorney to survive incapacity, the document had to state it was “durable” and would survive any incapacity. The new Act changes the presumption and all powers of attorney will be durable unless the document states otherwise.

2. Authority of Co-Agents

A person has the ability to name more than one person to serve as agent at any one time. There may be times when it is appropriate to have two individuals serving as agents. Section 26-1A-111 creates a presumption that where two or more agents are named to serve at the same time, they can each act individually without consulting the other. If you want your agents to work together and be in agreement before any decision is made, then you would need to explicitly state that the power is joint and not joint and several.

3. Appointment of Successor Agents

Section 26-1A-111(b) allows a principal to allow someone (including an appointed agent) to name one or more additional successor agents at a later time. This provision can be effective in cases of long-term incapacity, where the principal may “run out” of agents as time passes.

4. Enforcement of Documents

One of the most significant provisions of the new Act regards an individual’s or institution’s obligation to accept a power of attorney (see 26-1A-120). Under prior law, if you presented a power of attorney to a bank, it may refuse to honor it and you would have no legal recourse. The new law states that if a bank (or any party) has a question about a power of attorney, it can request a verification or opinion of legal counsel within a reasonable time. Once the verification is received, it must honor the power of attorney within a reasonable time or else it may be liable for damages.

The new law further prohibits an institution from requesting a new form or that the principal use the institution’s power of attorney. However, if an institution has a good faith reason to believe that the power of attorney is not valid, then they would not be liable for damages.

5. Specific Grants of Power

There are many times an agent will want to use a power of attorney to change a principal’s estate plan or general structure of financial assets. The new Act (26-1A-201) provides that if an agent wants to exercise any of the following powers, then the document must expressly grant those rights:

a. Create, amend, revoke, or terminate a trust
b. Create or change rights of survivorship
c. Create or change beneficiary designations
d. Delegate authority granted under the power of attorney to others
e. Waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan.
f. Exercise fiduciary powers that the principal has authority to delegate

6. Gifts

There are several restrictions on an agent making gifts of a principal’s property (which is not a bad idea). For example, you cannot give yourself any portion of the principal’s property unless you are related to them by blood or marriage. An agent must be careful about making any gifts, but should take particular caution when the agent itself will benefit. If the gift is not something the principal would have done if he or she were able, then the agent may be liable for a breach of fiduciary duty.

Further, section 26-1A-217 states that unless otherwise stated, any gift to an individual shall not exceed the annual gift tax exclusion (currently $13,000). There may be situations where an agent needs to make a gift exceeding $13,000, but the document itself would have to allow such flexibility.

The new Act greatly enhances the effectiveness of a power of attorney, which can be advantageous if you find yourself handling the financial affairs of a loved one. The Act only applies to powers of attorney executed on or after January 1, 2012, so in order to achieve maximum effectiveness for your document, you may want to add executing a new power of attorney to your New Year’s resolutions.

The Definition of Estate Planning

2011-10-19T19:57:00.002-05:00

I heard a quote today from the book Loving Trust, which I feel is the best description I have heard of estate planning:

"I want to provide for myself and my loved ones during my lifetime, and, upon my incapacity or death, give what I have to who I want, the way I want, when I want, and, if I can, save every last fee, tax or court cost whenever possible."

New Year - New Resolutions

2010-12-31T09:30:00.002-06:00

I always enjoy the turn of the year. It is not only a time to reflect on the past, but also an opportunity to think about the future. Many people enter the new year with one or more "resolutions," most often involving some type of weight-loss program. I want to offer an easier and more significant resolution for your consideration (easier and more important-how can you argue with that?).

I recommend that you take the new year to ensure that your financial and legal house is in order. All too often financial and legal matters are not addressed until there is an emergency or a real need and by that time, it is too late to adequately address these matters. You may want to consider addressing them now, so that if a need ever arises, you and your family are protected.

The following is an example of some steps you can address this year:

Seven Steps to Protect Your Family

Action Item

1. Sign a Will and/or Trust to direct the disposition of property at death

2. Obtain a Durable Power of Attorney

3. Obtain an Advance Health Care Directive

4. Document Funeral/ Burial Wishes

5. Create a Personal Record Book, containing such items as a list of assets, document locations and emergency contacts

6. Conduct a long-term care and life insurance assessment: either a self-assessment or speak with an insurance professional.

7. Leave a lasting personal legacy for your friends and family, e.g., a letter or ethical will

A Christmas Gift from Congress

2010-12-22T08:39:00.002-06:00

The status of the Federal Estate Tax (affectionately known to some as the “Death Tax”) has been in a state of uncertainty for the last several years. In 2009 the tax existed and included an exempt amount of $3.5 million, meaning if the total value of your estate was less than the tax exempt amount, you did not have to be concerned with the tax. On January 1, 2010 the estate tax was repealed and we have operated for an entire year without an estate tax. On January 1, 2011 the tax was scheduled to return to its 2001 levels, which would include an exempt amount of only $1 million.

Congress and the President prevented a return to the 2001 estate tax levels when the President signed new tax legislation on December 17, 2010. This law provides very generous provisions for taxpayers in relation to the estate tax and removes the applicability of the tax for most individuals. Some highlights include:

-The tax exempt amount is now $5 million per individual. This means that together a couple can pass $10 million to their beneficiaries without paying an estate tax.

-Where there will be an estate tax, the maximum rate is 35%.

-The tax exempt amount is now “portable.” Meaning, if a spouse dies and does not use all of his or her exemption, the surviving spouse can claim the remainder. Under the old law, a couple would need to use tax-free or credit shelter trusts as a part of their estate plans in order to take advantage of both tax-exempt amounts.

-The Estate Tax and the Gift Tax are once again “unified,” meaning the exemption amounts are the same. Even when the tax-exempt amount was $3.5 million, the exempt amount for lifetime gifts was capped at $1 million. The exempt amount for lifetime giving is now $5 million.

This new law provides an incredible benefit for families. One should note that these new provisions are set to expire in two years, so either Congress will make these changes permanent or we will be facing the same situation again in December 2012. In the meantime, it looks like we will have a very happy new year (at least from a tax perspective).

Happy Thanksgiving

2010-11-26T15:38:00.002-06:00

The following text is from my bi-weekly newsletter. I thought it was important enough to share here. If you are interested in signing-up for the newsletter, you can do so at www.jackcarneylaw.com.

Many of us are spending the long holiday weekend with family and loved ones. We all take the time to travel, cook, shop and even pass through airport security scanners because we love our families and we want to spend time with them. Even though we would do a lot for our families, there are some issues we usually try to avoid, like discussing estate and elder care planning.

The Thanksgiving holiday provides a wonderful opportunity to reconnect with family members and ascertain their situation. When children visit parents, they may notice stacks of unpaid bills, an empty refrigerator, dents in the car, or other signs that their parents need some help. These clues may also indicate a need for some elder care planning. If a parent becomes unable to handle his or her affairs, a Durable Power of Attorney is a more cost-effective tool than a court created guardianship or conservatorship.

Children are not the only ones that may want to ask questions this holiday season. If a young couple has children and they do not have a Will, then they are not doing everything necessary to protect their minor children (such as naming a legal guardian and establishing a trust to protect financial assets). Grandparents have a unique opportunity to initiate these discussions to ensure that their grandchildren will be well protected.

Showing true love for our family often involves addressing uncomfortable issues. Ensuring that our family is legally protected in the event of death or disability is one of the best gifts we can give.

On that happy note, have a wonderful holiday season!

An Alternative to Litigation

2010-11-21T19:14:00.002-06:00

The Better Business Bureau (BBB) is an excellent resource for individuals who have a complaint with a business. The BBB can be a viable alternative to litigation when it comes to complaints against the services of a business (I must admit I have used it myself). Before considering seeking legal action to address a complaint, you may want to first consider whether the BBB can provide a solution.

Unintended Consequences

2010-09-15T22:42:00.001-05:00

I recently attended a hearing in divorce court. While I was waiting for the Judge to call my case, I had the opportunity to listen to an argument about the division of home between a husband and wife. Typically, the marital residence of a couple is subject to an equitable division. The twist in this particular case was that the home was a gift from the wife's mother. Furthermore, the mother continued to live in the home. The wife's argument was that her mother intended for the home to remain in the family.

This situation provided a real-life example of the risks of making lifetime transfers of property. I am often asked by clients whether parents should transfer their homes to one or more of their children. The typical reason for these transfers is to "protect" the home from Medicaid should the parents ever require long-term medical care. Such a transfer may be legally and morally questionable. Nevertheless, there is a real practical risk in that the parents are no longer the owners and the home could be subject to the claims of the children's creditors (such as a divorcing spouse). I would not want to live in a home that is owned by someone else because my rights to remain in the home are not guaranteed. I fear many parents do not appreciate this risk when making these transfers.

Updating your Will

2010-08-31T23:06:00.002-05:00

It is always important to ensure that your Last Will and Testament is updated in order to reflect your current wishes. If you executed a Will in Alabama prior to 1983, it is even more important to update your Will immediately (even if you have no substantial changes). In 1983, the Alabama Legislature approved the use of a self-proving affidavit, which is a document almost all lawyers utilize today. This affidavit prohibits the need for a witness to later testify to the authenticity of a Will. If there is a self proving affidavit, which basically is the addition of a notary public to the Will, then the Will is deemed valid for purposes of probate. You can imagine that it can be quite difficult and costly to track down a witness to a Will, especially if it was prior to 1983!

Death and Dying

2010-07-17T21:31:00.001-05:00

As an estate planner, I frequently have to discuss the topics of death and disability. These topics can be extremely uncomfortable for people (and on top of that I ask people to pay me for the privilege of this discussion). I recently learned a good lesson from my four year old about the fear of dying.
First, just a few days ago (and totally out of the blue), she told me “Daddy, I don’t want you to get killed.” I replied “me neither” and we had no more to say about that topic.

Just a few days later, Grace told me that she had to tell me something. She put her hands on my cheeks and said “Daddy, I love you. Will you promise something? When you die and are in heaven, you watch me, ok. I will be old when I get there, but when I get there we can love each other forever and ever, ok?“

I was of course a little surprised and had an immediate dread that something was coming for me and this was my omen. She then made me laugh when she said, “write it down ok, so you don’t forget.”

After some reflection I learned a lesson from Grace. She is too young to harbor all the fears and concerns our society has about death. Perhaps it is something (especially those of us who are Christians) should feel comfortable discussing and perhaps we should even embrace it. By the way, Grace, I will watch you.

Do I Need These Long Documents?

2010-07-04T21:41:00.004-05:00

Some of the most frequent questions I receive from clients involve the length of my legal documents. These include: Why is my document so long? I do not understand all these fancy legal words, can you take them out? Do you charge by the word?

I can understand a client’s frustration, in particular when other Wills they may have seen consisted of one or two pages and were quite “straightforward.” I have reviewed many of these very simple Wills and although many are not legally wrong, they approach the concept of estate planning from a different school of thought.

My documents are relatively straightforward too, but I include a lot of additional provisions that are designed to make the administration of the estate or trust as efficient as possible. In reality, we may only use 10% of the language in one of my documents to administer an estate. The other 90% is there to address circumstances or unique situations that may arise in the future.

For example, I include a provision stating that if a remote beneficiary is under age 21, then any assets passing to that beneficiary will be held in trust. The plan does not initially anticipate that assets will pass to one of these remote beneficiaries, but because it could happen, it is prudent to address this eventuality.

There is of course a rational limit to planning for eventualities. If an occurrence is really remote, then it may not be worth addressing in one’s documents. However, every family’s circumstances are different, and one of the benefits of working with an estate planner is that he or she can help a client identify any probable eventualities that warrant inclusion in the planning documents. Even though the length and complexity of documents may annoy or frustrate a client, if one of these eventualities should arise in one’s life and the document quickly and efficiently handles it, the client will be grateful it was there.

Happy Memorial Day

2010-05-31T15:56:00.003-05:00

I want to wish all service men and women (past and present) a happy Memorial Day. We are thinking about you and are keeping you and your families in our thoughts and prayers. I also do not want to forget about soldiers of a four-legged variety, such as those honored by the Alabama War Dog Memorial (please visit http://www.awdm.org/).

I have had the opportunity to assist members of our armed services with their own estate planning. It is always an honor to be a part of that process and it is particularly somber to know that this client is willingly placing themselves in a position of harm. It makes the documents, such as a Will and Durable Power of Attorney, seem that much more important.

Military deployment is also a time where many service members may consider utilizing an Ethical Will as a part of their estate plan. An ethical will is a writing wherein an individual shares his thoughts and feelings about his friends and family. It may also be an opportunity for a parent or grandparent to share words of wisdom for future generations.

I recently read a touching story about a soldier in Iraq who kept a journal for his young son. Many of the entries mentioned the possibility of his death, which were made all the more poignant by the fact that this soldier was killed in action. It was an incredible tragedy, but at the same time this man left an amazing gift for his family.

An Unpleasant Thought

2010-05-29T15:54:00.000-05:00

One of the most unpleasant questions I have an opportunity to raise in my planning meetings is the discussion of a family disaster. For purposes of estate planning, I personally define a “family disaster” as the death of all of the immediate beneficiaries in a plan. In the example of a married couple, it would be their death and the death of all of their lineal descendants. In many cases this is an unlikely event, but it does happen (often in the form of a small plane crash).

Many people do not plan for this eventuality in their documents, but because it could happen, I feel it is important to address. For example, I am married and have two young children. We frequently travel together as a family and therefore there is a higher risk that my family will utilize our disaster clause, as opposed to a family with six children and twenty-two grandchildren.

You have the opportunity to provide for a number of individuals and/or your church or favorite charity. One common option is to split the estate between the wife’s heirs at law and the husband’s heirs at law. “Heirs at law” may also be described as an individual’s next of kin.

As the years go by, the family disaster issue will become less relevant, as in all likelihood, the family will grow and your children will have children, etc. thereby increasing the pool of potential beneficiaries.

Where Can I Find a Lawyer

2010-05-27T15:49:00.000-05:00

Many people feel the world has too many lawyers (and they may be right). I recently spoke with someone who had not executed a Will only because they did not know where to find a lawyer to help them. You can find thousands of lawyers in the yellow pages and on the Internet, but you will spend a significant amount of time sorting through the masses in an attempt to find someone to fit your particular needs. Some lawyers are like doctors in that they specialize in a particular area of the law. I personally speak with several people a week who have pulled my name from the phone book, but I have to tell them that I do not accept the type of case that they are pursuing.

Seeking a referral can be the most efficient way to obtain legal counsel, for you will get a focused recommendation, designed to fit your needs. Here are some common examples of where you may go to seek a referral for legal counsel:

Family
Friends
Your Attorney (if he or she does not handle your new need).
Local Bar Associations (many have referral programs)
Your CPA
Insurance Agent
Financial Planner
Your minister

There are also many new social media resources that may allow you to find a lawyer to fit your needs, such as twitter, facebook or linkedin.

Summer Vacation Planning

2010-05-26T00:27:00.003-05:00

We are approaching the Memorial Day weekend, which many consider to be the start of the summer travel season. If you are going to travel this summer and be apart from your children, you may want to consider signing a temporary guardian appointment, which would allow you to name someone to make personal and medical decisions for your children if you were unable to do so. My wife and I sign such a document whenever we leave our children for an extended period of time (thank God for grandparents, for no one else would take the kids for so long). Please consult your legal advisor if you are interested in obtaining this type of document.

A Religious Direction to Get a Will?

2010-04-10T12:11:00.001-05:00

I was fascinated to learn that the Episcopal Church's Book of Common Prayer actually discusses estate planning and the importance of making a Will. On page 445 of the Book, the minister is directed to:

Instruct the people, from time to time about the duty of Christian parents to make prudent provision for the well-being of their families.

There is also a duty of all persons to make wills, while they are in health, arranging for the disposal of their temporal goods [and] to leave bequests for religious and charitable uses.

One does not have to be an adherent of the Book of Common Prayer to believe in and follow these directions. (In the interest of full disclosure, I am Catholic). They serve as a great reminder for everyone that we are all asked to be good stewards for our families.

Federal Estate Tax Update

2010-01-24T03:25:00.004-06:00

As many people know, Congress allowed the Federal Estate Tax (also known as the Death Tax) to lapse on January 1, 2010. We are currently operating without an estate tax. I can distinctly remember telling clients that Congress would never let the tax lapse, but that goes to show what I know about the reasonableness of our elected officials.

This situation has created a tremendous amount of uncertainty for estate planners, especially given that most expect the estate tax to return at pre-repeal limits and rates. The general consensus appears to be a wait and see approach. If a client has a documents that makes dispositive distributions based on the amount of the federal estate tax exemption, then they may want to analyze the effect repeal may have on their documents. For example, a document may say "I give the maximum amount that can pass free from federal estate taxes to __________." If this person were to die today, this amount is arguably the entire estate.

There is currently legislation that would "fix" this problem. The bill (2009 HR 4154) has been passed by the House and is currently in the Senate. This bill would establish the estate tax exemption at the 2009 level of $3.5 million with a maximum tax rate of 45%. You can review a copy of the actual bill here.

Legal Guide for the Seriously Ill

2009-12-26T12:57:00.003-06:00

The American Bar Association (in conjunction with several other organizations) recently published a free on-line guide addressing the legal issues related to a serious illness. This tool can be a good starting point for families addressing this type of situation. We are all going to deal with the issue of serious illness at some point in our lives. Oftentimes it is more efficient to address these issues and have a plan in place before a sudden illness strikes.

The guide is available at http://www.caringinfo.org/UserFiles/File/PDFs/AdvanceCarePlanningLegalIssues/Legal_Guide_for_Seriously_Ill.pdf.

Merry Christmas

2009-12-25T13:01:00.000-06:00

I want to wish everyone a wonderful holiday season. I was fortunate enough to spend a great day with my family.

The Loss of Someone We Know

2009-12-10T09:37:00.003-06:00

Death is such a common part of life. It is something that we will all have to cope with and even experience. As an estate planning attorney, it is certainly an event that I discuss on a daily basis. Nonetheless, when death occurs in our close personal circle of friends and family, it is always a shock.

I recently learned about the sudden death of an attorney colleague and friend. The news was shocking and sad. As always, it forces me to put my own life in perspective and face my own mortality. The only comfort that I have is that I can pray for my friend and her family.

I am also meeting with a client today to discuss a Will. She has been talking to me about preparing a Will for years. She admitted that the reason she finally made the appointment is that she learned of the sudden death of a close friend of hers.

I hope that I will always address the important issues in my life (such as keeping my own personal estate planning updated) on a regular basis without the impetus of a tragedy. Nonetheless, it is often those sudden tragedies that finally make us ignore the unimportant noise in our lives and focus on those things that matter most. Perhaps that is why we are asked to endure these types of tragedies in life.

New Office

2009-11-22T20:35:00.001-06:00

I am pleased to announce that I have a new office located in the heart of Homewood. Our new address is 3410 Independence Drive, Birmingham, Alabama 35209. Please feel free to drop by for a visit!

Back to School

2009-08-21T06:16:00.002-05:00

It's that time of year- students are returning to school. Many college and graduate school students may find themselves moving many miles away from home. It is important to consider some of the legal issues that may arise, especially with these potential long distances.

There are two documents that parents and students may find useful: a Durable Power of Attorney and an Advance Health Care Directive. A Durable Power of Attorney would allow students to appoint someone to make financial and business decisions for them if they are unable or unavailable to make them for themselves. There are times where a parent or family member "back home" may need to make decisions or sign paperwork on behalf of a student. A Power of Attorney would make this possible (and much easier).

An Advance Health Care Directive allows individuals to appoint someone to make health care decisions if they are unable to make them for themselves. Students may want to leave a copy of this document with their respective student health centers in order to clarify who would make day to day health care decisions for them.

Although many students would not have a need for these types of documents, it is a great (and simple) insurance policy in case the need should ever arise.

Estate Planning in a Digital Age

2009-05-16T18:44:00.003-05:00

I recently read an article about estate planning for younger clients. One of the more interesting sections addressed the particular challenges of estate planning in a digital age. Many individuals have their own webpages, domain names, e-mail accounts, twitter accounts, etc. Even though these are not traditional "tangible" pieces of property, it is prudent to consider these items assets for estate planning purposes.

First, it is important for an individual to leave a list of usernames and passwords that would allow an agent under a Durable Power of Attorney or a Personal Representative under a Will to access these items. There are obvious security concerns with creating such a list, and it would probably be prudent to make an effort to safeguard this information. Where a client has a significant amount of "digital" property, it may even be advisable for any Will or Power of Attorney to include specific language referencing the power to manage and control digital assets.

Second, an individual may want to make specific reference to these properties in a Will to dispose upon it on death. Even though the Will may address this property, it will also be subject to the terms and provisions of any agreement with the e-mail or host provider. For example, I was curious about whether my twitter handle (@jackcarney) could survive my death and be left to ... well, probably another Jack Carney. Twitter's terms of service do not address this issue and it would probably be something my Personal Representative would need to resolve (assuming anyone thought my twitter handle was a valuable resource). I have not yet sold an item on Ebay, but if I did and should die before the end of the sale, my Personal Representative would be responsible for canceling or closing the sale, in addition to collecting any proceeds. At the very least, he or she would need access to my Ebay (and possibly Paypal) account.

There will likely be more significant developments regarding estate planning and digital property within the next several years, as these assets are becoming a more common part of everyday life.

The Bright Side of the Economy

2009-05-01T07:01:00.002-05:00

The economic situation is adversely affecting a lot of people. However, there may be a bright side in the area of transfer tax planning. The federal estate and gift taxes are meant to tax the transfer of wealth from one generation to the next. The tax is based on the value of one's assets. As many of our assets (homes, stocks, properties) are at historically low values, this environment can be a perfect opportunity to transfer wealth at a low tax cost.

Now I am not telling anyone to die, but rather to consider making lifetime gifts of assets. Each individual can pass up to $13,000 to another individual without gift tax consequences (spouses can split a gift and give up to $26,000). In this environment, you can gift more shares of stock using the $13,000 umbrella than you could have three or four years ago. If the shares increase in value after the gift, then that appreciation will be out of the donor's taxable estate and will be included in the estate of the recipient.

Another aspect of this current environment is historically low interest rates. These interest rates can be important for certain wealth transfer vehicles (such as a Grantor Retained Annuity Trust or GRAT), but also for some simple transactions, such as intra-family loans. A family member loaning money to another may not want to charge an interest rate. However, the IRS has established a minimum rate that must be charged in order to avoid having the failure to charge interest treated as a gift. These minimum rates are currently low and therefore it may be an excellent time to explore these options.

As always, these words are not meant to apply to anyone's specific situation. If you have any questions or concerns, please consult your legal or tax advisor.

Updates

2009-04-13T08:35:00.002-05:00

I often receive questions about when to review estate planning documents (such as Wills, Powers of Attorney, etc.). Here are some general guidelines to follow:

-Consider personally reviewing your documents at least once a year to ensure they still conform with your wishes. You may wish to make it a yearly habit (at the start of a new year, your wedding anniversary, etc.) or you may wish to share copies with another advisor with whom you will meet with anyway every year (such as your CPA or Financial Planner).

-Consider a more formal review with your attorney every three to five years. You attorney would be able to review your current situation and determine whether your documents are still the most effective. Furthermore, you can discuss whether there have been any changes in the law that may warrant a change in your documents.

-Review your documents upon the occurrence of a life changing event, such as a death, marriage, divorce, etc. My general rule of thumb is that if you have to ask yourself if something is a life changing event, then it is probably a life changing event.

A change in circumstance does not necessarily mean that you will have to change your legal documents. For example, the birth of a new child would most certainly constitute a life changing event, but most estate planning documents provide for “afterborn” children and therefore no change would be necessary. Nevertheless, for many individuals s, a regular review can at least provide you with some comfort that the documents you have contain the best estate design for you and your family.

Happy Easter

2009-04-12T16:10:00.002-05:00

As I spend an Easter Holiday with family, I realize that holidays are such a good time to consider how our loved ones are faring and if they might need any special assistance. If a parent might seem to be having some trouble keeping up with his or her personal finances or just seems a little more forgetful than usual, then it might be a good idea to begin thinking about putting a personal financial security system in place (with tools such as a revocable living trust or durable power of attorney).

It is important to note that any such steps are best taken with the full support of all parties involved (including siblings). Having a frank and open discussion at the outset can go a long way to preventing suspicion and angst later that may derail any attempts to help.

New Procedure at Probate Court

2009-03-17T20:11:00.002-05:00

Effective April 1, 2009 the Jefferson County, Alabama Probate Court will begin requiring the production of a certified death certificate in order to open an estate administration. Even thouogh it may cause some additional delay for families, it is probably a good practice. I had always been surprised it was not a requirement before!

You Can Give a Little More

2009-01-05T10:51:00.002-06:00

The annual gift tax exclusion has been raised to $13,000 this year. This amount reflects what an individual can give to another without having to file a gift tax return. The previous amount was $12,000. If you are fortunate enough to be the recipient of an annual gifting program, you may want to remind your benefactor that he or she may be able to give you a little more this year!

Be Intentional

2008-12-26T07:20:00.001-06:00

Your estate planning documents will address the disposition of your assets and will further name certain individuals to serve in particular roles. You can even provide specific parameters regarding the administration of your estate or any trust for beneficiaries. For example, you may have a trust that can be used for the “health, education and general welfare” of any of your children. You may wish to further direct that the payment of college education expenses will be limited to 4 years.

As you can imagine, there are innumerable possibilities when it comes to including specifics in your estate planning documents. Another option for sharing your wishes is to prepare a separate letter of intent for your guardian and/or Trustee. A letter of intent allows you to express your wishes in a unique and personal way. In addition, it is non-legal, so you do not need the assistance of an attorney when preparing a letter of intent. Furthermore, a letter of intent may be changed at any time without the necessity of changing your legal documents.

As the letter of intent is not a formal legal document, it is not technically enforceable should your guardian or trustee fail to follow its directions. However, it is a personal expression of your last wishes and unless your guardian or trustee has a heart of stone (and you would probably not have selected them if they did), then they will probably honor your wishes. If there is a particular issue that warrants a legal “guarantee,” then you could simply include that provision in your Will or Trust.

Finally, if you take the time to write a letter of intent, please take some steps to ensure it will be found in the event of your death or disability. You can keep any such letter with your important personal papers in your home or you may want to leave a copy with your attorney (as he or she will likely have original copies of your Wills, etc. anyway).

The letter of intent can be a powerful emotional tool to use as a part of your estate planning and I encourage all of my clients to use some form of this type of letter in their planning.

Happy Holidays

2008-12-24T12:47:00.001-06:00

I want to wish everyone a very Merry Christmas and safe and happy holiday season. Take care!

Hang in There

2008-12-23T12:27:00.003-06:00

As we approach the end of the year, it is worth noting that January 1, 2009 is a significant date for federal estate tax purposes. The "tax-free" amount, which is the amount an indvidual can pass estate tax free to his or her family, jumps from $2,000,000 to $3,500,000. The financial results for a family can be significant, as any assets over the tax-free amount are taxed at a roughly 45% rate. There may be some families that try to delay the enforcement of a living will until 2009. It is a shame that families may have to think about taxes in making those decisions, but unfortunately it is a result of the current tax law structure.

For the rest of us, such a significant tax law change may warrant a review of our current estate plan.

A Worthy Cause and Fun Too

2008-10-07T10:33:00.004-05:00

Make plans to be at Magic City Slingfest! Why? (1) Fun. Your kids will make music with Charlotte from The Pink House and munch on a snack or two, and you can play with all kinds of dreamy slings and get a free babywearing consultation. (2) Leave with an awesome organic sling for the grand sum of $5. Yep, $5. Yep, awesome. Yep, organic. We’re not kidding. Earth Creations has donated the fabric for our DIY Table, and you can create a wraparound sling and learn how easy it really is to use it, for five … whole … dollars. (3) It’s for a good cause! All proceeds benefit First Light shelter in downtown Birmingham.

Visit www.magiccityslingfest.com for more information.

Troubled Times

2008-10-01T03:32:00.004-05:00

Many people are concerned about financial issues these days (and with the news from Wall Street and Washington D.C. there is probably a good reason). Not much good comes from worrying about things beyond our control (although we can always write Congress), so it might be helpful to address those things that we can control.

First, conduct an assessment of your assets. You should ensure that the structure of your bank holdings provide you with the maximum FDIC insurance protections (which is currently $100,000 per account). Second, if you are dealing with debt, address it head-on and educate yourself about all available options. Finally, do not forget to conduct an annual credit review to ensure the integrity of your personal credit. A good resource to obtain these reports is http://www.annualcreditreport.com/.

Labor Day

2008-09-01T17:12:00.002-05:00

Happy Labor Day! I hope you have a great day. May you comply with the minimum wage, applicable OSHA regulations and all other legal requirements related to employment.

The Future of the Estate Tax

2008-08-30T12:47:00.003-05:00

The Federal Estate Tax (affectionately called the "Death Tax" by opponents) is a tax on property owned by an individual at death. If any individual dies with assets (including proceeds of life insurance) that exceed the current "tax-free" amount, then there may be estate taxes due. The tax rate is roughly 45% of any assets exceeding the current tax free amount.

The current tax-free amount is $2,000,000. It is scheduled to increase to $3,500,000 in 2009. In 2010 there is no estate tax and then the tax returns in 2011 with a tax-free amount of $1,000,000. The tax returns due to a sunset provision. The current system makes planning difficult and may put the lives of many wealthy individuals in jeopardy in 2010!

We will probably not have a resolution until after the elections this fall. The Presidential candidates do have their own plans regarding the estate tax. Barack Obama is recommending a permanent tax-free amount of $3,500,000 with a maximum tax rate of 45%. John McCain is proposing a tax-free amount of $5,000,000 with a 15% tax rate. Both proposals demonstrate that the tax is probably here to stay and George Bush's dream of permanent repeal is unlikely.

Travel Plans

2008-08-29T21:32:00.003-05:00

Here are some legal tips to help with your holiday travel/hurricane evacuation plans:

-Leave a list of emergency numbers with a friend or family member

-Keep a copy of your Advance Medical Directive in your glove box

-Wear your seatbelt

-Do not drink and drive

-If an officer stops you, do not voluntarily consent to a search of your car

-Obey the speed limit-- it will keep you safe and save your gas!

"Practical" Estate Planning Tips- 4

2008-08-25T00:40:00.002-05:00

The estate planning process forces people to address many uncomfortable subjects. If you are already addressing the issues, you might as well hit for the cycle and cover burial and organ donation.

Burial wishes contained in a Will are legally binding. However, as a practical matter, an individual's Will is usually not reviewed until well after burial. If the family is reviewing the Will prior to your death, then there may be more important issues to address! Even if you include wishes in your Will, you should still discuss these wishes with your family. It is also a good idea to include these wishes in another document, such as a separate writing or an Advance Health Care Directive.

A person may also include his or her wishes regarding organ donation in several legal documents. Yet, it is still important to discuss these issues with the family. Regardless of your wishes, if a member of your family objects to your wish to be an organ donor, the local organ center will probably refuse to accept a donation. Although this may seem like an unfair result, the organ procurement organizations do not have time to fight, nor do they like any situation that might result in negative publicity.

The bottom-line: please discuss these issues with your family.

"Practical" Estate Planning Tips- 3

2008-08-24T16:15:00.004-05:00

Who are you going to call? A contact list for your family or friends can be a valuable tool in the event of an emergency, for otherwise, they might not have access to this important information. Such a list should be in the hands of an individual who will have immediate notice of any emergency situation. Consider including contact information for some of the following individuals on such a list:

-Your employer

-Your attorney

-Your CPA

-Your insurance agent

-Your financial planner

-Close friends and family members

-Your priest or minister

-A counselor or therapist

-Your doctor

-Any other person that should be aware of an emergency situation

"Practical" Estate Planning Tips- 2

2008-08-23T23:29:00.002-05:00

How safe is a safety deposit box? It is probably pretty safe, but it may not be the best location to store an original Will. If you die with your Will in your box, and there is no one else with access to the box, then the only individual able to open the box is your Personal Representative (Executor). There is an immediate Catch-22, as one cannot be appointed as Personal Representative without the Will, which is of course in the box. Courts can issue an order to open a box for sole purposes of removing a Will. However, you can prevent many of these steps by ensuring that your family will have easy access to your Will after you are gone.

Paws and Patriots

2008-08-21T23:10:00.003-05:00

Please consider joining the Alabama War Dog Memorial Foundation for the 2008 Paws and Patriots Walk and Festival at Heardmont Park on September 6. For more information, please visit our website (below). It will be a great family event. In order to maintain the integrity of this legal blog, I must add that you should not forget to include charitable beneficiaries (such as the AWDM) in your Last Will and Testament!

www.pawsandpatriotswalk.com

"Practical" Estate Planning Tips- 1

2008-08-21T22:58:00.002-05:00

Many people fulfill their obligation to protect their loved ones by signing a Last Will and Testament. While a Will is an excellent document for your family, it does not work if it cannot be found! I have met several people who were certain a loved one had a Will, but they could never locate any copy. I even received a phone call from a woman who was calling large law firms in Birmingham to see if her father was a client. He had always told her that he had a Will, but she could find no evidence of it after his death.

I can understand the desire to keep the contents of a Will private. However, please ask yourself if your family will be able to locate your Will after you are gone. At the very least, provide them with the name and number of your attorney, accountant and/or financial planner. You may also want to leave a writing providing the locations of various important documents. You can find a personal record book tool that might be helpful at www.jackcarneylaw.com/resources.aspx.

Pain at the Pump

2008-08-14T05:50:00.002-05:00

It may not be too much comfort, but the IRS feels your pain at the pump. Effective July 1, 2008, the IRS raised the standard mileage rate (for purposes of tax deductions) to 58.5 cents per mile. This new rate can provide a substantial benefit if you deduct mileage for business or charitable purposes. For more information, please consult your tax advisor or www.irs.gov.

Powers of Attorney- Part 7

2008-08-12T08:46:00.003-05:00

The Document Itself

A power of attorney is conceptually a simple document. It names someone to act on your behalf. However, this simple concept does not necessarily mean that the document will be short or concise. A one page doocument (they are out there, I have seen them) that names "John Doe as my agent under this power of attorney" and nothing more would probably not be effective. Here are some tips about what to include in your Durable Power of Attorney:

-A long list of powers for your agent. The general rule of thumb is that if a power is not specifically listed in the document, then the agent does not have that power. I therefore recommend that you err on the side of over-inclusion, as you never know which powers you will need in the future.

-A statement that the power of attorney is "durable" and that it will survive the grantor's incapacity.

-Language specifically referencing medical records, making sure to include the magic acronym, HIPPA.

-A statement about the agent's responsibility for health care.

-It is helpful to include a statement that photocopies will have the same force and effect as an original.

Powers of Attorney- Part 6

2008-08-11T08:54:00.002-05:00

Is your Power of Attorney Fresh?

The power of attorney theme for the blog continues this week with an additional tip to ensure the effectiveness of your document. I recommend "freshening" your power of attorney every three to five years. By freshen, I mean execute a new document, even if it contains the same terms and provisions as your existing document. A power of attorney with a more recent date is less likely to be questioned when you put it to use. If you document is decades old, yellow and full of coffee rings, then a bank or financial institution might think twice about accepting it.

Powers of Attorney- Part 5

2008-08-10T20:28:00.003-05:00

Is your Power of Attorney Durable?

I have interchangeably used the words "durable power of attorney" and "power of attorney" in previous posts. In fact, the word "durable" has a significant impact on the effectiveness of your power of attorney. A power of attorney that is durable survives the incapacity of the grantor. As a default rule, all powers of attorney terminate upon the incapacity of the grantor of that power unless the document states that it will continue during incapacity. In most cases, it is important to ensure that your power is durable, as most people want a power of attorney to protect against incapacity.

In order to determine if your power of attorney is durable, review it to see if the term "durable" is used or if there is a specific statement that the power will survive the incapacity of the grantor.

Powers of Attorney- Part 4

2008-08-09T11:49:00.002-05:00

Who to Serve?

One of the most important decisions in creating a power of attorney is the selection of an agent. One's agent should be an individual who is responsible, generally organized and trustworthy. You can name one agent to serve at a time or name two or more individuals to serve simultaneously. It is also important to name successor agents. I once spoke with a 70 year old man who was serving as agent for his 96 year old father. His father was no longer able to make business decisions and no longer had the capacity to execute legal documents. The son was named as the sole agent under his father's durable power of attorney (there was no successor). The son was beginning to contemplate his own health and mortality and was concerned about who would care for things should something happen to him. Unfortunately, as there was no successor named, the power of attorney would fail should something happen to the son. If you do not have an adequate number of successors named in your durable power of attorney, consider updating your document while you still can.

Powers of Attorney- Part 3

2008-08-09T11:32:00.002-05:00

Today or Tomorrow?

One question to decide in preparing your power of attorney is to determine whether you want it effective immediately (sprung) or effective only in the event of incapacity (springing). As with most legal questions, there is no right or wrong answer, but rather pros and cons.

Your agent can use your sprung power of attorney the moment they need it (without taking any additional steps). This type of document is very efficient. It may also be used if the grantor of the power is simply out of town or unavailable.

Some individuals can not sleep at night knowing that there is an effective power of attorney out there. In that case, a springing power may be the best option. The downside of a springing power is that the grantor must be declared incapacitated (by a doctor or court). A grantor's doctor may be reluctant to declare his or her patient incapacitated, especially in a close case. Another variation of the springing power of attorney is to utilize a committee of friends and/or family members that must vote to determine that the power of attorney is effective.

If you have any questions about whether your power of attorney is springing or sprung, please consult your legal advisor.

Powers of Attorney- Part 2

2008-08-08T22:28:00.004-05:00

What a Power of Attorney is Not

Many individuals are uncomfortable with giving another person power of attorney for fear of abuse or mismanagement. However, an agent serving under a power of attorney is not granted free reign to control someone's assets as they see fit. An agent has a fiduciary duty to act in the grantor's best interest. In other words, an agent can only act for the benefit of the grantor and do those things that the grantor him or herself would do. If ever there is an allegation of wrongdoing against someone who has a fiduciary duty, that person is basically guilty until they prove themself innocent.

My wife and I had an opportunity to witness the "suspect" use of a power of attorney first hand. We were enjoying dinner out of town. The waiter was delivering the bill to the party at the next table, when one of the members of that party jumped up to grab the bill, shouting "I'll pay for this one, I got Daddy's power of attorney." Normally, as an estate planner, I would have immediately jumped up and questioned this exercise of her fiduciary duty. However, this particular dinner group was most scary and I am afraid it would not have ended well for me.

Even though your agent owes you a strict fiduciary duty in the administration of your power of attorney, you should still take care in who you select to serve in that role.

Powers of Attorney- Part 1

2008-08-08T22:04:00.003-05:00

What is a Power of Attorney?

I have previously written about the importance of having a durable power of attorney. It is worth more discussion, as these documents that can be so useful are so simple to prepare. The next several posts will focus on the nuts and bolts of powers of attorney.

A power of attorney is a document that allows an individual to appoint someone to make business or financial decisions in his or her place. The power may be limited (such as a limited power for purposes of selling a home) or more general (such as a general durable power allowing someone to handle all business matters).

Absent a power of attorney, an individual must seek court approval in order to handle another individual's financial or business affairs. The time and cost of seeking court approval are enormous compared to a simple and cost effective power of attorney. This document is one of the best legal investments an individual can make!

The Legal Implications of Marriage

2008-06-04T14:53:00.002-05:00

The act of marriage is significant. You may not know that the act of marriage alone can affect the structure of your estate plan.

For example, in most states, a new spouse is automatically entitled to a portion of a deceased spouse's estate (often 1/3) regardless of the terms and provisions of the deceased spouse's Will. Certain retirement plans will automatically change the primary beneficiary to a new spouse, regardless of whether the deceased spouse has an existing beneficiary designation naming another individual, such as a child.

These two examples occur automatically, absent additional planning. If you are contemmplating marriage and especially in cases of a second marriage, please consider the legal consequences of such action. You may be ok with the result, but you might want to discuss a prenuptial agreement or other arrangement. Most folks say that you should not enter blindly into marriage. That advice should also apply to the legal and financial consequences of that instituion.

Who Gets the Kids?

2008-06-04T00:19:00.002-05:00

A very common reason for signing a Will is to utilize the document to name guardians for minor children. Many times parents have difficulty selecting a guardian to care for their children and because of that fact delay signing a Will.

There is no time like the present to have a Will in place. I offer two pieces of advice when people delay signing a Will because they do not know who to name as guardian for their children:

1. Treat the selection of your guardian like most political elections. You may not like the candidates on the ballot, but you have to select the best one. It is better that you select the guardian, rather than a court doing it for you.

2. Do not name a guardian in your Will, but rather plan on using an amendment to the Will or a separate document (which most states allow) to name your guardian when you are ready.

The New American Family

2008-06-03T23:56:00.006-05:00

I read an article the other day stating that there are more "blended" than traditional families in the United States. A blended family can be loosely defined as one where children in the household do not share the same parents (as a result of second marriages, etc.). Regardless of whether the statistics are true, there are certainly many blended families in this country. These families need to address their estate planning with even greater care and consideration.

The first question to ask is "where do I want my assets to pass when I die?" Where all children are shared by both spouses, the answer is typically "to my spouse, if he or she is living" (with the understanding that the surviving spouse will one day provide for your children). However, if you have a child from a previous marriage and leave everything to your new spouse, there is no guarantee (absent more advanced planning) that your surviving spouse would ever benefit your child.

Terrible controversies can arise in blended families where there is a lack of thoughtful estate planning. Another common dilemma is a parent leaving all personal property (e.g., collectibles, china, jewelry, guns) to a new spouse (to the exclusion of a child). Such a common bequest could cause resentment and ill feeling, as the child may feel that their step-parent now has all of their parent's sentimental family property. A parent may alleviate this controversy by simply leaving a few sentimental family items directly to their children.

There are unfortunately many anecdotal examples of conflicts in blended families. Most of these conflicts can be easily avoided or alleviated by simply engaging in basic planning. The starting point is to begin asking yourself, "what if ..."

Formal Attire

2008-05-12T16:08:00.006-05:00

Some people (including me) operate some type of business. Many businesses are operated under the form of an entity, such as a LLC, C-Corporation or S-Corporation. One of the primary reasons to operate a business as an entity is to provide liability protection. In other words, any claims against the coporation would be limited to the assets of the corporation and would not extend to the business owner's personal assets (e.g., your home).

Unfortunately, I see many business owners that inadvertantly threaten the liability protection offered by their entity. When a business entity fails to respect the corporate formalities, a plaintiff may disregard the entity for liability purposes and reach the business owner's personal assets. The fancy legal term for this concept is "piercing the corporate veil." The logic makes sense and goes something like this:

If you do not respect your business as the entity that it is, then you will not be allowed to use that same entity to shield yourself from personal liability when a creditor arises. The following are some ways to help maintain the corporate formalities and maintain the intergrity of your corporate "veil":

Have an updated corporate book with current corporate documents (such as Articles of Incorporation, By-laws, etc.)
Hold an annual meeting for the business and maintain minutes
Maintain a separate business checking account and refrain from using that account for personal expenses
Sign all business related documents as a representative of your business and not as an individual
Include you business designation (e.g., LLC or Inc.) on all letterhead, advertising, etc.

The bottom-line is that if you treat you business like a business, you will be able to enjoy the benefits of having that business in the first place.

Happy Law Day!

2008-05-01T10:36:00.002-05:00

You may not know it, but May 1 is "Law Day" across our country. It is a day where we reflect on the role of the law in our society. I often marvel at how the law touches each and every aspect of our daily lives in some way. You may have a wrong that needs addressing or you may need a Will to protect your family in the case of a tragedy. You may simply just be a fan of "Law & Order." In any event, I hope you will join me in celebrating Law Day.

A Good Way to Give

2008-04-17T14:15:00.004-05:00

I have written before about charitable giving. The site http://www.goodsearch.com/ seems to provide an easy way to benefit your favorite charity, while doing something you would do anyway. I do not know much about the site, but it sounds like a great concept and you may want to investigate it further.

Do You Have Anything to Give?

2008-04-13T10:35:00.004-05:00

An estate plan directs the disposition of one's assets after they are gone. Oftentimes those of us with minor children provide that any assets left for our children are to be held in a trust in order to provide for their health, education and maintenance. Even a well drafted trust will not accomplish these goals if there are insufficient assets available for the family.

Life insurance is a great tool to provide for one's family after death. The proceeds of any life insurance policy can be directed to a trust for minor children, thereby providing the trust with the necessary fuel it needs to function. As a part of the estate planning process, you may want to consider evaluating your life insurance situation. It can make a tremendous difference for your family.

Everyone Has a Will

2008-04-13T09:59:00.005-05:00

Many people have taken the time to sign a Last Will and Testament. Those who have never signed a Will may wonder what happens to their assets and their family in the event of death. Well, there is a good news and bad news. The good news is that even those who die without signing a Will actually do have a Will. The bad news is that their State Legislature wrote it for them.

Let's assume you are married and have minor children and have not signed a Last Will and Testament. In that case your actual "Will" basically reads as follows:

LAST WILL AND TESTAMENT

OF

JOHN DOE

(Courtesy of the State of Alabama)

Introductory Clause. I, JOHN DOE, a resident of and domiciled in the County of Jefferson and State of Alabama, have decided not to execute a Will and thereby rely on the default rules of succession provided by the Alabama Legislature.

I am married and my wife’s name is: JANE DOE.

I have two living children: JEFF DOE and JOHN DOE, JR.

ITEM I

Direction to Pay Debts. My Administrator shall pay all debts and expenses of my estate.

ITEM II

Disposition of the Estate. My estate shall be distributed as follows:

(1) Fifty Thousand Dollars ($50,000) shall pass to my wife, JANE DOE.

(2) The remainder of my estate shall be further divided as follows:

(a) One-half of my estate shall pass to my wife, JANE DOE.

(b) One-half of my estate shall be distributed in equal shares to my children, JEFF DOE and JOHN DOE, JR.

I understand that I am unable to make any provisions for charity.

ITEM III

Naming the Personal Representative. I hereby waive any right to appoint someone to manage my estate. I am going to rely on the Probate Court to appoint an Administrator. Further, in the event my family does not petition said Court within Forty-Five (45) days of my death, the County Administrator (a government appointed attorney) will have the right to serve as my Administrator. I did not waive the requirement to post a bond and therefore my Administrator must pay for a bond premium out of the assets of my estate.

ITEM IV

Guardian for Minor Children. If my wife should predecease me, I hereby relinquish all right to name a guardian for my minor children and will rely on the Probate Court to appoint someone to raise my said children for me.

ITEM V

Provisions for Beneficiaries. If any beneficiary has attained the age of Nineteen (19), then his or her share of property shall be distributed to him or her outright. If any beneficiary is a minor, such minor shall place his or her assets in a court created conservatorship (until age 19). I recognize that a conservatorship is a costly and cumbersome mechanism.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my seal this the _____ day of ___________, 2008.

NO SIGNATURE NEEDED

Festina Lente

2008-04-01T18:46:00.002-05:00

I am reluctant to admit it, but I am a big fan of Latin. One of my favorite quotations is "festina lente," which means to "make haste slowly." I really believe this saying describes the appropriate approach to preparing a Will. You want to move quickly because a Will is not valid until signed. Nevertheless, you want to be deliberate and cautious with your decisions, as they may have long-lasting effects. Finding the perfect balance between festina and lente will result in an effective and efficient plan for you and your family.

Do you have a favorite charity?

2008-03-30T13:49:00.007-05:00

Many of us support charitable causes during our life. Our charitable donations may include gifts to our church, our alma mater or our favorite cause. However, we often forget that we have an opportunity to make a charitable gift in our Will. Making one or more charitable gifts in a Will leaves a great legacy and clearly demonstrates your priorities to your friends and family. A charitable gift of any amount (even a few hundred dollars) can accomplish either of these goals. If you would like to make a charitable devise in your Will, consider consulting with the charity, as they may be able to provide helpful advice (in particular if you want to limit the scope of the gift in any manner).

Some of my favorite charities include:

Prince of Peace Catholic Church and School (http://www.princeofpeace-hoover.org/)

The Alabama War Dog Memorial Foundation (http://www.pawsandpatriotswalk.com/)

Hands On Birmingham (http://www.handsonbirmingham.org/)

Habitat for Humanity (http://www.habitatbirmingham.org/)

What is Your Legacy?

2008-03-28T20:47:00.002-05:00

You probably know the importance of executing a Last Will and Testament in order to financially provide for your loved ones. A Will not only ensures the implementation of your wishes regarding your property, but it also streamlines the administration process for your beneficiaries. Furthermore, where there are minor beneficiaries, a Will is an effective means to appoint a legal guardian in the event of death.

Handling your legal and financial affairs should be a priority. After you have addressed these issues, you may want to consider your own personal legacy. If you were gone, would your family know how much you cared for them? Would they know about what was important in your life? Would they feel a continued connection with you?

It is possible to share these items with your family through the use of a traditional planning tool: the ethical will. Ethical wills originated in ancient times and were primarily a Jewish tradition, by which families transmitted moral teachings to future generations. The ancient ethical wills were formally written and could be quite lengthy. However, they were tomes that families were able to treasure for generations.

An ethical will can be in any format. It may be written or spoken. It may be on an audio tape or a video tape. It can be in the form of poetry, a painting, or a poem. The structure and format of an ethical will should fit the personality of the creator.

You may wish to update an ethical will at many stages throughout your life. As we age, our experiences accumulate and our perspectives change. As with journal writing, writing and reviewing ethical wills can lend important insight into our own personal development.

An ethical will can be one of the most important gifts that you leave for your family. Your words and affection will be more valuable than any assets that you leave to your loved ones. Please consider taking advantage of the incredible opportunity that you now have to share these sentiments.

The Bottom Line

2008-03-20T00:42:00.004-05:00

A frequent impediment to obtaining important legal documents is often the fear of legal fees. The following tips may reduce your anxiety about legal fees:

Ask about fees before retaining the services of a lawyer.
Provide the lawyer with as much information as possible. For example, if you provide all of your financial and family information upfront, it will reduce the length of an initial estate planning meeting, which should result in reduced legal fees.
Remember that lawyers typically bill for all time they spend in addressing a particular matter. If you have three questions for your lawyer, consider one phone call or e-mail, instead of three separate phone calls or e-mails.
Be diligent in your review of invoices. If you have any questions, do not hesitate to ask about them.
Ask you lawyer about about flexible payment schedules. Many lawyers are amenable to accepting payment over a certain period of time.

Tax Rebate Heads-Up

2008-03-19T17:02:00.003-05:00

Many people are talking about the forthcoming tax rebate (which was a part of the recent Economic Stimulus package). Please be aware that many people who do not usually file an income tax return (such as retirees, disabled veterans, etc.) may be eligible for a rebate. However, in order to get the rebate payment, an individual must file an income tax return. It is important to ensure your elderly or disabled family member does not miss out on much needed financial assistance. For more information about the process and general eligiblity for the rebate, please consult your tax advisor or visit the IRS's website at http://www.irs.gov/.

The Value of a Personal Record Book

2008-03-18T23:49:00.010-05:00

A personal record book is one valuable aspect of the estate planning process that does not necessarily require the services of an attorney. Providing a summary of financial and personal information can be a tremendous gift for family in the event of death or incapacity. For example, a detailed list of insurance policies, bank accounts, IRAs, etc. can provide a Personal Representative with a tremendous advantage in effectively administering someone's estate. Furthermore, some practical information about whom to call in the event of an emergency or where important documents are located (such as a Will) can save a family a tremendous amount of time and energy.

There are many different types of record books available. In fact, a person can very easily create their own. If you would like to download a free copy of a personal record book, click on the resources section of http://www.jackcarneylaw.com/ and select "Family Record."

Durable Powers of Attorney

2008-03-16T11:39:00.005-05:00

A durable power of attorney can be a powerful tool in the event of a person's disabililty or incapacity. Absent a power of attorney, a family member or loved one must petition a court to administer the affairs of an individual who is legally incapacitated. This process can be lengthy, uncomfortable and expensive. A power of attorney allows an individual to appoint someone to handle their financial affairs for them (typically without court approval). The following are some tips regarding powers of attorney:

Ensure that your current power of attorney is "durable," which means it will survive your incapacity. A durable power of attorney should actually include the word "durable" in the document.
"Freshen" your current power of attorney every few years, as a bank or financial institution is more likely to accept a power of attorney with a recent date.
Consider allowing your banks, institutons, employer, etc. to review your power of attorney now (before someone uses it) to ensure they will accept it when it is actually needed.
Consider naming several successor agents under a power of attorney.

Taking the time to create a durable power of attorney can be a tremendous gift for your loved ones.

Welcome

2008-03-10T13:18:00.003-05:00

Welcome to the first entry for my law practice's blog. I plan to use this blog to provide the public with useful legal information. I must note that this blog is not intended to provide legal advice, nor is it intended to form an attorney-client relationship with any party. If you have specific questions about how the law affects you, please consult with an attorney.

I hope you enjoy this resource. Please feel free to participate in the exchange of information and ideas by using the comment feature.

Take care!