When it comes to estate planning, there is a lot to think about. While there are many different considerations involved, at the highest level, you can define estate planning as the process of making a plan for distributing your assets when you die.
Tasks Sullivan Law Associates, LLC can help with during estate planning:
Creating a will: In a will, you state whom you want to inherit your property and name a guardian to care for your young children should something happen to you and the other parent;
Designating your beneficiaries;
Establishing a durable power of attorney: With a durable power of attorney, you can give a trusted person authority to handle your finances and property if you become incapacitated and unable to handle your own affairs. The person you name to handle your finances is called your agent or attorney-in-fact (but doesn't have to be an attorney);
Preparing your Living Will/Advance Healthcare Directive and a Power of Attorney for Health Care: Writing out your wishes for health care can protect you if you become unable to make medical decisions for yourself. Health care directives include a health care declaration ("living will") and a power of attorney for health care, which gives someone you choose the power to make decisions if you can't; and
Setting up any trusts you might need to protect your assets, both for your own benefit during your lifetime in the event of incapacity, and for the benefit of your beneficiaries after your death.
What Happens if You Die Without a Will?
If you die completely intestate in Alabama—no wills, no trusts, no joint ownership, etc.—then all of your assets will automatically pass through the Alabama Intestate Succession Laws. Essentially, the Intestate Succession laws divide up and pass down your assets through your closest living relatives, beginning with your immediate family and then your surviving parents and siblings.
The probate proceedings for intestate assets can take longer than the typical year, and any private assets you own will become a matter of public record. Additionally, the loved ones you leave behind won’t have any say in how your assets are distributed.
Everything is left up to the state, which has a specific formula for asset distribution. That formula works as follows:
If you only have children, then your children will inherit your entire estate
If you only have a spouse, then your spouse inherits your entire estate
Suppose you have a spouse and biological children with them. In that case, your spouse will inherit the first $50,000 of your intestate property and half the balance of the property. Your children will inherit the remaining intestate property
If you have a spouse and children who are not biologically related to that spouse, then the intestate property is split directly in half between them
If you have a spouse and parents, your spouse inherits the first $100,000 of your intestate property and half the balance of the property, and your parents will inherit the remaining intestate property
If you only have surviving parents, then they will inherit 100% of your intestate property
If you only have surviving siblings, then they will inherit 100% of your intestate property
(The size of each individual’s share will depend on how many children you have, whether or not you’re married, and so on down the chain of relatives.)
It should also be noted that according to Alabama law, any child inheriting a portion of your estate must legally be your child, whether through biology or adoption. This also includes grandchildren.
Suppose you don’t have a spouse, children, or any blood relatives during the time of your passing. In that case, your estate will become escheatable. In other words, all of your assets will become the property of the state government.
Estate planning doesn’t have to be an intimidating or strenuous process. However, while you don’t have to draw up a last will and testament, any attorney would advise you to at least create a living trust and make your accounts transferable, just in case.
Do you need an estate planning attorney?
While there is some time and expense associated with estate planning, the process helps ensure that your assets are handled per your wishes after you are gone. While everyone’s situation is different, some of the primary benefits of working with an estate planning attorney include:
Creating an individualized plan based on your specific needs and offering you the most valuable legal advice for your situation;
Working with an experienced attorney who is knowledgeable about current estate planning laws in your state, ensuring that the decisions you make will be made in accordance with the law and are legally enforceable; and
Access to a specialist who can serve as a resource for questions, concerns, changes, and updates to your will and trust.
An estate planning attorney can also be called upon to guide anyone with power of attorney over a recently deceased person's estate through the process of probate court.
In the event that a beneficiary (or even an individual not designated as a beneficiary) announces that he or she plans to contest the will and sue the estate of a deceased family member or loved one that you also stand to benefit from, it might be in your best interest to consult an estate planning attorney immediately. Such lawsuits can quickly drain the estate's funds and leave all beneficiaries a little worse for the wear.
For help with your estate planning, call us today to schedule a consultation.