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How Does an Annuity Work and is it Right for You?

If you have ever considered setting up a retirement account, then you have probably come across the term “annuity.” If you are over the age of 50, there is a good chance that a financial advisor or other commissioned sales rep has tried to sell you whole life insurance or an annuity. Do you really know how an annuity works or whether it is a safe bet for your retirement?

At Five Points Law Group, our estate planning attorneys not only help prepare wills and powers of attorney, but we can also advise you on how these plans may work in tandem with your financial plan. As attorneys, we are not on a commission. When you hire us, you are paying us to act as fiduciaries, meaning we are required to put your interests first and advise you on what is best for you, not what will be best for our bottom line.

Annuities are a Trade

Ultimately, an annuity is nothing more than a complicated trade agreement. You pay an investment company, and in return they agree to give you regular monthly payments that you can count on regardless of how the money performs in their investments. It removes the risk (to an extent) and gives the retiree a level of certainty. While this may sound like a good plan, when you do the math, many people decide that annuities are not really a good financial choice.

Drawbacks of Annuities 

In theory, an annuity sounds safe. However, there are four big drawbacks you need to consider before taking all of your retirement funds and moving them to one of these accounts.

Insolvent Insurance Carrier: If the annuity company (insurance carrier) goes broke and dissolves, you will lose your principal. This is a big risk with some companies, so you need to make sure you are using a super credible and highly rated company. Of course, with those higher ratings come higher costs and fees.

High Fees: Annuity companies often charge annual or even monthly fees to receive your payout. Therefore, you are taking your own money, giving it to someone else, then paying them to give it back to you in monthly payments. You can easily do this with a stable bond or mutual fund account. You can place it in a decent, well-performing fund and set it up to distribute dividends or just take regular distributions from your principal over time until the funds are depleted.

Bad Investment: To have an annuity, you must give up your right to the principal. So, you actually give up control over your retirement funds. You are taking a gamble that you may live longer than your money, while the annuity company is counting on the money being worth more and lasting longer once pooled in investments.

Ineligibility for Government Benefits: Annuities are a countable resource when determining eligibility for SSI, VA Benefits and Medicaid for long-term care.  Because the payments are often set up many years before an individual needs the assistance of government benefits, little thought is paid to how they can impact long-term care.  Contacting an Elder Law or Estate Planning Specialist is the prudent course when considering these products.

What Happens to Your Principal When You Die? 

You generally do not get to leave your annuity to others, although some allow a spouse to continue receiving money. Therefore, most estate planning professionals who are really interested in your family’s long-term wealth will advise you to invest well and draw dividends or principal. That way your money continues to earn interest. Plus, if you die sooner than anticipated, that principal remains in your control for your children, spouse, or other loved ones. Call Five Points Law Group to get skilled advice with your estate plan.

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Coronavirus and Estate Planning

During the COVID-19 pandemic, it may feel like there are few aspects of your life that you can control, beyond hand washing and social distancing. However, estate planning – which is more vital now than ever – can help you reclaim some control during these uncertain times.

Estate planning with 5 Points Probate involves the creation of three essential documents:

Power of attorney

Advanced directive for healthcare

Will

These documents are crucial if you should fall ill, and they can help ease the burden on your family during the worst-case scenario. This guide will explain why you need estate planning in light of the coronavirus, the benefits of setting up these documents, and how an attorney can help.

 Estate Planning and COVID-19: What You Need to Know

Estate planning begins with a power of attorney and an advanced directive for healthcare. Together, these documents will serve a crucial role in the event you fall seriously ill. In the worst-case scenarios, a will can outline how your assets are to be distributed after you pass.

Let’s take a look at these documents in more detail:

 What Is a Power of Attorney?

A power of attorney gives family and/or trusted acquaintances the legal right to make key financial decisions on your behalf. For example, let’s say you’re the head of your household, and your health has taken a turn for the worse. If you’re hospitalized or even put on a ventilator, your physical ability to access your finances and, perhaps, your mental capacity during this time may be severely affected. Meanwhile, the mortgage is still due, your business needs to be managed, and bills must be paid.

While you’re temporarily unavailable and/or incapacitated, who will take care of your business, pay your bills, or handle other financial obligations? With a power of attorney, you can choose a responsible person you trust to handle these affairs on your behalf.

A power of attorney can grant your family member or trusted friend access to your bank accounts to pay bills, manage the day-to-day affairs of your business, and act on your behalf in nearly any fiduciary capacity. This grant of authority is why it’s important to choose someone who you fully trust to make the best decisions on your behalf.

When choosing someone to serve as your power of attorney, they should be:

Someone with good attention to detail and capable of comprehending legal documents and contracts.

A person who is financially responsible and has a good understanding of business and finances.

Someone who is cooperative and willing to listen to the advice of attorneys or accountants, if needed.

 What Is an Advanced Directive for Healthcare? 

An advanced directive for healthcare is essentially a guide for first responders, healthcare workers and your loved ones regarding the kind of care you want to receive if you cannot make these decisions yourself. It is sometimes referred to as a “Living Will.”

An advanced directive for healthcare can also prevent your loved ones from having to make difficult decisions. For example, if you state that you do not want to receive life sustaining treatment, this personal choice can prevent situations that would otherwise cause undue stress for your family.

During the ongoing COVID-19 pandemic, this document is more important than ever, especially for non-married couples. For instance, let’s say you have told your specific preferences for medical care to your significant other. If you are not legally married, your significant other will not be able to make medical decisions on your behalf. But with an advanced directive for healthcare, you can set out your wishes for medical care to act as a guide for healthcare workers, and specifically appoint your partner as healthcare proxy so that they legally have a say.

An advance healthcare directive may cover the following:

Whether you’d like to be put on life-support treatment, if needed. And if so, what kind and to what extent.

Your preference for certain medical treatments, such as ventilators and other devices to aid breathing, use of feeding tubes, dialysis, blood transfusions, surgery, antibiotics, and more.

Decisions regarding whether you will receive palliative care.

Whether you want a Do Not Resuscitate (DNR) order.

If you want any resuscitation efforts to be made in the event you stop breathing or your heart stops.

Whether you’d like to be an organ donor.

In addition to outlining your wishes for medical care, an advanced directive for healthcare also allows you to name a healthcare proxy to speak for you, if you are unable to communicate your preferences.

 What Is a Will? Why Do I Need One?

A power of attorney and an advance healthcare directive can help you get the medical care you want, and ensure your financial affairs are in order if you’re incapacitated.

But what if the unthinkable occurs? While it’s difficult to think about, many people find that creating a will actually helps them feel more in control during these difficult times. In the event you pass, a will fully outlines how your assets are to be distributed.

You can also appoint an executor of your will. An executor is the person who oversees the distribution of your assets and any related matters in probate court.

A will can decide:

Who will be appointed as a guardian to care for your minor children or adult children with special needs. Without a will, the court will decide who will act as guardian.

The allocation of assets in trusts for minor children, adult children, other loved ones, or even cherished pets.

How your cash will be distributed, which includes liquid cash, money market accounts, checking accounts, savings accounts, and more.

How intangible property will be distributed, such as intellectual property, royalties, stocks, bonds, and business ownership.

The distribution of real estate and valuable objects, such as artwork and jewelry.

An attorney will help facilitate the process of creating your will, and you’ll have the peace of mind of knowing that a plan is in place.

 Do You Need an Attorney to Help with Estate Planning During COVID-19?

It’s not mandatory to hire an attorney for estate planning. However, without legal experience, there are many parts of the estate planning process that you might miss. Proper estate planning with a seasoned local attorney can save your family a significant amount of money and time.

When you choose 5 Points Probate to handle your estate planning, you can expect:

Thorough Legal Services: It’s important to understand that proper estate planning encompasses more than just filling out forms. You may need help with titling vehicles and other assets, and naming beneficiaries. Our attorneys are Alabama natives licensed to practice law in or great state.  They will ensure all loose ends are tied up, so you and your family don’t have to worry.

Expertise in Probate Law and Estate Planning: Our law firm has a dedicated Birmingham based legal team that handles estate planning and Alabama probate law. We have in-depth knowledge in these areas, and can navigate complicated probate matters, contested wills, and more. Whether you need help with your initial estate planning or your circumstances have changed since your last estate plan was made, we can help during every step of the process.

Superior Customer Service: From our support staff to our legal team, you can expect caring, local service customized to your needs. We will always take the time to listen to your concerns, and we will fully explain the estate planning process so you can make the best decisions for your future.

A Worry-Free Experience: We understand that estate planning can be a stressful process, and we value your time. This is why we’ve updated the process using technology to eliminate your worry and stress. We can use video conferencing and online collaboration if you prefer, so you can sign documents from the comfort of your own home.

 Get Started With Estate Planning Today

The COVID-19 pandemic has left many of us feeling uncertain about the future. During these uncertain times, estate planning is one of the best ways to reclaim control and protect you and your family.

Estate planning can let healthcare workers know what kind of care you want in the event you are incapacitated. It can also ensure your financial affairs are properly managed, and that your assets are allocated according to your wishes, if needed.

Get started by scheduling a confidential consultation with one of our local attorneys at 5 Points Probate. Contact us today at (205) 235-9658.

We look forward to meeting you in our offices conveniently located in 5 Points South in Birmingham or on the internet.  Stay safe and be well!

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Divorcing for Mental Health Reasons

According to the American Psychological Association (APA), between 40 and 50% of all American marriages end in divorce. This is despite increased awareness of the challenges of divorce, as well as numerous resources available to help couples deal with the mounting pressures of modern life. While financial distress remains one of the leading causes of marital discord, mental health is also becoming a large factor in many divorces.

At Five Points Law Group, we take a compassionate approach to helping couples deal with the breakdown of a marriage. If a partner’s mental health concerns are creating stress in the marriage or have led to a situation in which divorce is the only option, contact us today to schedule a private consultation with an attorney who can provide skillful and empathetic advice and recommendations.

 How Mental Health Affects a Marriage

Mental health is a much wider issue than many people wish to admit. In fact, the National Institutes of Health (NIH) estimate that approximately 44.7 million Americans (about one in five people) are living with some form of mental health issue. This can range from minor transient depression or post-traumatic stress disorder (PTSD) to serious personality disorders, such as bipolar disorder or affect disorders. Regardless of the specific condition, the challenges that people face can spill over into their relationships and marriages.

The spouse of an individual dealing with serious mental health disorders may end up feeling alone and burdened, as though the relation has morphed from a loving spousal relationship into more of a clinical relationship, where the spouse is constantly trying to “fix” or “counsel” the affected partner. In some situations, behaviors can create fear, panic, or even resentment. These feelings can stir and build for years – even decades – before a person finally decides that they cannot continue to tolerate the situation.

 Does Leaving Mean You do Not Care?

Not at all. Many spouses who choose to divorce over mental health issues are very loving, and in fact they may care deeply for their spouse. However, there may be a host of reasons why divorce makes sense. Consider these brief scenarios in which despite a loving relationship, a person may decide it is better to divorce:

Children are being negatively affected

Family finances are being negatively affected

The person with a mental health condition needs help that the spouse can not provide

Institutional care is needed

The mental health disorder is creating a danger to others

Behaviors are leading to high-risk conduct, like promiscuity or drug and alcohol dependence

Getting Help Early

Often with the help of a compassionate divorce attorney, you can communicate with the affected spouse and help them see the benefits of divorce. Often, when children are involved, it may make sense to give space and distance to allow the person who is facing mental health challenges time to get the help needed. It also may be necessary to give children a break from the frequent challenges and events that so often accompany mental health disorders.

 If you are dealing with a partner with mental health challenges in Birmingham, call Five Points Law Group today, and speak with a skilled family law attorney who can review your situation and look for efficient yet practical approaches to helping you resolve your divorce.

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Your Obligations as a Personal Representative of a Probate Estate

If you recently discovered that a loved one named you his or her personal representative, you may be dealing with some conflicting emotions. On one hand, it is an honor to know that a parent, spouse, or other close relative trusted you enough to name you as their executor under a will. However, at the same time, you may be feeling a little overwhelmed and worried about what it actually means.

At Five Points Law Group, we work closely with personal representatives, administrators, executors, trustees, and other fiduciaries to make sure that fiduciary obligations are met and estates are properly administered from start to finish. Here are a few quick tips you need to keep in mind about your obligations as a representative for an estate.

 Action is Voluntary

 The first thing to remember is that you are in no way forced to act. Just because someone named you as their representative or executor does not mean you have to do the job. You always have the right to decline the job. But beware: If you decline, the next individual named in the will is going to be in a position to make important and critical decisions on behalf of the estate. If you do not like how that person handles things, you might not have the option of changing your mind later.

Fiduciary Obligations

 Once you do accept the job and decide to act, you are bound by a set of fiduciary obligations. In other words, you must treat the estate’s property as separate and apart from your own. You can not appropriate or use the estate’s property for your own purposes. Examples of inappropriate breaches of fiduciary duties include:

Commingling your money with the decedent’s money

Using the decedent’s cars, boats, or other vehicles for your own purposes

Moving into the decedent’s house without paying a reasonable rent

Accounting

 Next, under Title 43 of the Alabama Code, you may be required to provide a regular accounting of the estate’s assets and liabilities. This means letting other relatives and heirs know exactly what is available, what debts may apply, and how the funds are being distributed. The more complex the estate, the more difficult this can be.

Opening the Estate and Administering it Properly

You do not want to get into legal trouble for accidentally misappropriating estate funds. If the estate has enough value to require probate, you will need to file the original will with the local court and petition to open an estate. This will give you the legal authority to:

Collect assets

Deal with creditors

Resolve and pay debts and claims

Defend the estate against lawsuits

Prosecute lawsuits on behalf of the estate

Distribute remaining funds to heirs and legatees based on the decedent’s wishes

File final tax returns

Sell or auction property

Transfer real estate ownership

Close the estate

How a Birmingham Probate Lawyer can Help

 As you can probably imagine, there are a lot of ways a probate matter can get complicated quickly. In many cases, the surviving heirs all agree and get along. If so, it will go a long way to easing the process. But in other cases, family members fight bitterly over assets and heirlooms.

If you need help administering an estate in the Birmingham area, give Five Points Law Group a call today.

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Can My Employer Fire Me for Getting Sick?

This is probably one of the top three most commonly asked questions at employment and labor law offices. The concern is that a person may become ill or have an injury that takes him or her away from work. Maybe you broke your leg at home or came down with the flu three times in one year. It is bad luck, for sure, but most people do not consider these things reasonable grounds for terminating employment. After all, you really cannot help getting sick, and you certainly do not want others contracting your illness. So, what does the law say about this age-old question?

At Five Points Law Group, our labor law attorneys frequently help clients who have been discriminated against or unlawfully terminated. Give us a call if you need help.

 How Big is Your Employer?

If your employer has fewer than 50 employees within a 75-mile radius, then you have no protections under FMLA (Family Medical Leave Act). For those with larger employers, FMLA allows them the ability and the right to take off up to 12 weeks of unpaid leave for medical conditions that prevent them from working. Here is how FMLA works:

You must have been continuously employed by your employer for at least 12 months

Your employer can require you to use all paid time off (including vacation and sick time) before using unpaid FMLA time OR require to use all paid time off concurrently with your FMLA leave

You can take time for your own medical conditions or to care for a child, spouse, or other family member who needs your care

The condition is considered “serious,” as defined by FMLA

Special rules apply for service members

Sadly, new employees are rarely allowed to take FMLA leave because of the 12-month rule. However, if you are in-demand and your employer would have trouble replacing you, it may be worth negotiating this issue a bit to see if they will be flexible.

 Do You Suffer from a Recognized Disability?

If you suffer from a diagnosed medical condition that is considered a disability, you may qualify for limited protections under the federal ADA law (Americans with Disabilities Act). Again, however, this only applies to employers with more than 15 employees. Yes, it covers a wider range of employees, but there are a lot of small businesses in Alabama that simply are not required to comply.

If you are covered, your employer must make “reasonable accommodations” for you to be absent in order to seek disability-related medical care. The ADA requires that the employee start the conversation about a request for a reasonable accommodation, which may include questions related to the following:

Appointments to get prosthetic devices fitted

Rehabilitation or speech, occupational, or physical therapy appointments

Medical appointments

Surgical or outpatient procedures

Hospitalizations

Occasional and reasonably anticipated recovery times (chemotherapy, time after a surgery, etc.)

There are complex rules that govern when a condition stops being covered by the ADA and when a procedure or hospitalization may require FMLA protections.

If you suspect that your employer is covered by these laws and is intentionally denying you the right to seek medical care, exercise your rights under federal law, or is refusing to make reasonable accommodations for a disability, call Five Points law Group today.

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Does My Employer Have to Give Me Paid Breaks?

Technically no, your employer does not have to give you paid breaks, at least not in Alabama; but there is more to it than that. Like all issues of fair labor, you have to first start by looking at federal law. If there is a federal requirement, then the states must either follow it or create stricter and more protective rules. States are not allowed to have requirements that provide fewer protections than the minimum standards set forth by the federal government. Breaks are one of these areas in which the federal rule is applied in Alabama, because the state does not have a more protective law in place.

If you suspect your employer is stealing your hard-earned money through unfair wage violations, call Five Points law Group today.

Federal Rules for Breaks and Meals

Under federal labor laws, your employer in Alabama is required to pay you:

For all work performed

No less than the minimum wage set by the federal government

Overtime compensation for hours worked in excess of forty in a work week.

Under the federal rule, employers are actually not required to give you rest time for breaks and meals; however, “rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. …. They must be counted as hours worked.”

Lunch breaks, however, can be unpaid if they last longer than 30 minutes.  Employers often deduct thirty minutes from an employee’s clock-in and clock-out time worked for a meal period.  However, the employer must ensure that “the employee must be completely relieved from duty for the purposes of eating regular meals. Ordinarily 30 minutes or more is long enough for a bona fide meal period. A shorter period may be long enough under special conditions. The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating.”  If your employer is deducting time from your recorded work hours, but you are working through your meal period or not completely relieved from your job duties during a meal period, call Allen D. Arnold of the Five Points Law Group, as your employer may be denying you overtime compensation.

Nursing Mothers

In 2010, with the passage of the Affordable Care Act, federal law was amended to require employers to provide reasonable breaks so that mothers could pump breast milk for a nursing child. This requires employers to allow this for up to one year after birth of the child. The law also requires:

A private place other than a restroom

The location for expressing milk should be private and not visible to other employees or the public

When Things Go Wrong

Even though Alabama has some of the least restrictive wage and employment laws in the country, some employers still feel the need to violate their employees’ basic rights under federal guidelines. While meals and break time may not seem like a big deal, they can become a big deal quickly. Consider what happens when an employer makes you count your break time as off-the-clock. You may be working an extra 30 – 60 minutes every day beyond your standard eight-hour shift. If, based on your unique circumstances, this causes you to work an hour of overtime each day, then at the end of a standard work year (261 business days), you could be owed as much as 261 hours of overtime pay, which for many people must be paid at time and a half — and this is just a conservative estimate.

If you feel your rights are being violated at work, give Five Points Law Group a call, and speak with our employment attorneys today.

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When a Caregiver Gets Too Close

If you live in Alabama and you have an aging parent or other relative, you likely are already aware of the many ways people attempt to exploit or abuse seniors every day. One of the more common scenarios is when a caregiver or home health worker gets very close to the senior and quickly begins assuming roles that are normally reserved for family. For instance, after a few months of providing in-home care, an elderly person may decide to change powers of attorney or other estate planning documents to include this new trusted friend. While this may be nothing more than a kind gesture, in most cases there is something more insidious going on.

At Five Points Law Group, our attorneys have decades of experience protecting seniors and their families from exploitation and abuse. If you suspect a caregiver is trying to gain access to your loved one’s money or other assets, call us right away.

Basic Legal Protections

First, we begin with the assumption that a senior has appropriate planning documents in place, namely a Last Will and Testament and durable powers of attorney for health and finances. If these are not already in place, a senior is at risk. Not having these legal protections means that if the senior becomes cognitively impaired (i.e. stroke, dementia, etc.), a court process known as guardianship or conservatorship would be necessary just to handle the person’s affairs.

If the elderly individual is still mentally capable of executing these documents, he or she should schedule an appointment to meet with an experienced attorney right away. If not, there is still hope.

Changes to Estate Plans and Powers of Attorney

Under Alabama Law (Section 26-1A-301 of the Alabama Code), a statutory power of attorney form can be crafted to allow a loved one to make decisions regarding things like:

Real estate transfers

Tax documents

Bank accounts

Investments

Insurance policies

Retirement accounts

Just about any other financial asset

While this can be a powerful instrument to help family members manage the finances of an aging senior who may be losing the mental ability to do so on his or her own, it can also be a dangerous weapon for unscrupulous caregivers looking to steal from a senior.

Restrictions on Healthcare Providers Being Named as Agents Under Powers of Attorney

If your aging parent or other loved one is considering granting these types of powers to a stranger or healthcare provider, you should be aware that public policy generally prohibits healthcare providers from being named as agents under powers of attorney. The reason stems from the obvious potential for a conflict of interest. Anyone who is performing a service for money should likely not be the agent in control of paying that money.

How a Lawyer from Five Points Law Group Can Help

If you have recently discovered that a healthcare worker is getting “too close” to your aging relative and you suspect they may be trying to gain access to assets and finances, you should talk to an attorney. Find out if your loved one has the necessary documents in place and learn whether the relative is capable of revoking them. You may need to get a court-supervised process, like guardianship or conservatorship, established to protect your loved one. Whatever the best course of action, we may be able to help. So give our firm a call today to learn more.

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Update on Alabama Divorce Laws

For those looking to get divorced in 2019, there are some changes to the law that you may want to keep in mind. Did you miss the window to file in 2018? If so, here is what you need to know.

Call Five Points Law Group today if you need help understanding the changes to the law or just want help getting your divorce finalized. We have years of experience helping people throughout Birmingham, and we might be able to help you, too.

New Tax Rules Effective January 1, 2019

Up until the clock struck midnight on December 31, 2018, alimony was a tax-deductible expense for the payor. This made a lot of sense, actually, because it is money the payor was court-ordered to give to someone else outside of his or her household and it did nothing to benefit the payor. It lightened the burden of an alimony payment to some extent.

As of this year, however, alimony is no longer tax-deductible. Under President Trump’s new tax law passed in 2018, starting with 2019 tax year, alimony loses its deductible status entirely, making it even harder on those paying alimony. Why the change? Well, previously alimony was considered taxable income for the recipient, meaning it was still taxed, but usually at a lower amount. Consider the fact that the alimony payor is almost always the person making more money. Therefore, in most cases that person has a higher effective tax rate. Take this example:

A man making $100,000 is ordered to pay $1,500 in alimony per month to a spouse who earns just $40,000. The higher earning spouse will be taxed on his full income at the higher tax rate, yet the lower earning person will receive the money tax-free. Previously, the IRS was taxing the lower-earning party at a lower tax rate. In the end, the winner here is the IRS.

Permanent Alimony is Out…Sort of

Back on April 13, 2017, the Governor passed HB 257, which essentially gave courts a strong instruction not to award permanent alimony (also known as “periodic alimony”). Under the new law, the court is not to award alimony for more than five years without giving a written explanation for the extraordinary reasons why the judge feels the recipient could not successfully rehabilitate and take care of him or herself. The major exception is where the marriage has lasted  more than 20 years.

Speak to a Lawyer Early in Your Divorce

Many people think you should only go to a divorce attorney once you have made the definite decision to get a divorce, but this may actually be a bit late. Instead, if you are having concerns or questions about divorce, it is probably time to engage in a fruitful discussion with an attorney near you.

At Five Points Law Group, we can provide insights and updates on the most recent laws and policies that may affect you. Keep in mind that each person’s situation will be entirely unique, so talking to a lawyer can be a helpful part of the planning process. You may ultimately decide divorce is not right for you, but it is impossible to make good decisions without good information. Call today and speak with an experienced divorce lawyer.

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Can I Get Paid to be the Representative of an Estate?

If you have been named the executor of a will or you need to act as the representative of a decedent’s estate in Alabama, it is important that you not attempt to handle the responsibility on your own. There are a lot of ways you can go wrong, so you should at least speak with a probate attorney early in the process to make sure you are not accidentally waiving your own rights or making key mistakes in how you handle estate funds. Call Five Points Law Group today to get the guidance you need.

The Representative’s Job

First, make sure you understand your role in the estate. A probate estate is a formal court proceeding by which the court manages and oversees how the estate is administered. However, in most cases, the court will not directly “supervise” your behavior as the representative. Instead, the court will simply be available to resolve disputes and grant the authority you need to distribute funds and pay debts. Think of the job as a case manager. You will be responsible for:

Finding possible assets that belonged to the deceased

Collecting and gathering property, real estate, bank accounts, and retirement funds

Making sure lawful claims and debts are paid

Disputing invalid claims and debts

Fighting off any will contests or disputes

Distributing funds to heirs and legatees appropriately

Managing the estate’s funds properly (you will be acting as a fiduciary)

Paying final estate taxes and filing a final tax return with the IRS and State of Alabama

Closing the estate once all administration is concluded

Administrator vs. Executor

When there is a will, the representative is known as an “executor,” because you are actually following the will’s instructions in order to achieve the purposes set for by the decedent. When there is no will, you will be called an “administrator.” The job is basically the same, but when there is no will, you will be guided by default rules under Alabama law.

Compensation for a Representative

It is not easy administering an estate – even a modest one. Family members may dispute distributions, you may need to deal with a disgruntled contractor who seeks payment of an unfair or illegitimate debt or mechanic’s lien, and you might need to work with banks, credit unions, life insurance carriers, and other institutions just to find all the assets. In some cases, you may even have to prosecute lawsuits where the decedent had legal matters needing to be handled prior to death.

For these reasons, many representatives find that they must spend personal money on things like postage, medical records, copying charges, and excessive mileage, and travel time. To be compensated for this, you will want to keep careful records of all expenses and time incurred. When it is time to distribute the remainder of the estate to heirs, you may be able to receive your share (if you are an heir or legatee under the law or the will) plus reasonable compensation for your services if this fee is allowed under the terms of the Will.

Additionally, where there is no Will, Administrator’s in Alabama are generally granted a fee of 2.5% of funds received by the estate and 2.5% of funds distributed by the estate.  These fees are set by the Court at Final Settlement and should not be taken by the Administrator without prior Court approval.

An attorney from Five Points Law Group can help you determine the appropriate amount to charge, as well as assist you in gaining court approval where required. Give us a call today to speak with an experienced Birmingham probate lawyer.

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[mariaarogue]

Report Suggests Sexual Harassment Linked to Health Problems

According to a recent study published in the Journal of the American Medical Association (JAMA), women who suffer from sexual assault and harassment suffer from a host of health complications at a higher rate than the general public. The tragic consequences of harassment, assault, and other violations of a woman’s autonomy can be seen throughout the study.

For those suffering from unfair discrimination and workplace harassment in Birmingham and throughout Alabama, Five Points Law Group is here to help. Here is what makes the study so telling.

Conditions Linked to Harassment and Assault

It is well-known that traumas may increase one’s risk factors for emotional and physical health problems, but this study goes further and includes things like sexual harassment, thus finally showing the startling connection between what women go through on a daily basis and their adverse health consequences. Conditions the study looked at included:

High blood pressure

Depression

Anxiety

Sleep disturbances (insomnia, apnea, and others)

According to the study, 304 female nonsmokers between 40 and 60 years of age were evaluated. Of that group, 19% reported experiencing sexual harassment, while 22% experienced some form of sexual assault. A total of 10% reported enduring both. Here is what researchers discovered:

Findings for Sexual Assault Survivors

Depression             3 times higher risk

Anxiety                2 times higher risk

Findings for Sexual Assault OR Harassment Survivors

Sleep problems     2 times higher risk

Findings for Victims of Workplace Harassment

Higher blood pressure

Higher risk of stroke

Higher risk of aneurysm

Higher risk of kidney disease

Higher risk of heart attacks

What This Means for Women and Employers

Studies like this one may have sweeping implications for employers because this suggests that workplace discrimination and sexual harassment are more than just a mere “legal” concern for employers. They may also pose a physical threat to workers. Therefore, employers who knowingly permit harassment and sexual assaults to take place may arguably be liable for the physical injuries that result.

For women, these studies should send a clear message that even though it may be difficult to self-advocate and come forward, there are serious health consequences that can result from not doing so. Instead, if you believe you are being discriminated against or harassed at work, you should immediately contact an employment lawyer from Five Points Law Group. We may be able to help you understand your rights and protect them.

Deadlines for Taking Action

If you are experiencing discrimination or harassment, you should first attempt to address this by notifying your company in writing that you feel there is a problem and you would like it addressed in a timely manner. If your concerns are ignored and the harassment continues, you should immediately contact an attorney. You may have as little as six months to file a claim with the Equal Employment Opportunity Commission (EEOC). Failure to properly protect your rights could result in the loss of opportunity to hold your employer accountable. Do not be a victim; stand up for your rights. Call Five Points Law Group today.

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[mariaarogue]

Risks of Foster Care Adoption

If you are an Alabama couple seeking to adopt, you may have heard that it is easier to become an adoptive parent if you begin as a foster parent. While this is true, there are numerous concerns and legal complications you may wish to consider before taking steps to become a foster parent.

At Five Points Law Group, our attorneys work to help dedicated and loving families adopt. For help with your adoption or to get answers to some of your challenging questions, call us today.

Becoming a Foster Family in Alabama

First, to become a foster parent in Alabama, there are some rules and minimum qualifications. In general, you must:

Be at least 19 years of age

Have a safe home

Meet the Alabama Minimum Standards for Foster Family Homes

Have enough space for the child

Make sure all people in your household are willing to participate in child care duties

Make sure all members of the household are in good health

Ensure that all adults in the home are able to pass a criminal background check

Is it Really Easier to Adopt as a Foster Parent?

Sometimes. In order to adopt a child in Alabama, you must petition the appropriate court for permission to assume legal responsibilities for the child. This can be a complex process. In a foster home arrangement, the State of Alabama will first make a determination of your suitability, then once a child in need is identified, that child will be placed in your care temporarily without many of the lengthy proceedings that accompany an adoption. But take note: Foster care is usually temporary.

Assuming the natural parents do not take the legally required steps to regain custody of their child, a court may eventually terminate their parental rights. If this occurs, you will still need to petition for adoption; however, the court will be looking for the best interests of the child. Since that child will have been in your care for some time, foster parents are often preferable as adoptive parents.

So, when things go right, being a foster parent means getting parental custody of an adoptive child earlier and in a more streamlined way.

Problems With Foster Adoptions

Now that you understand how being a foster parent might make things easier, it is important to note what happens when things do not go smoothly. Many times natural parents will begin to improve their lives and get custody of the child again. After being a parent to a young child for months or even years, you could have to return the child to what seems to be an abusive or even unfit home life. Courts are very reluctant to terminate parental rights unless there are serious reasons. This can lead to a painful back and forth, where the child is shuffled from natural parent to foster care and back again. In many situations, a foster family may care for dozens of children before they ever find a child to legally adopt.

How an Attorney can Help

Many times, the most difficult part of the adoption process is navigating the court system and all of the legal requirements involved. A guardian ad litem (GAL) is appointed to interview and investigate in order to help the court make decisions. Often the GAL’s report will make a big impact on the outcome of an adoption. Likewise, there may be conflicting arguments regarding the safety and welfare of a child going back to a natural parent. Having a skilled adoption lawyer on your side puts you in a better position to get the outcome you are seeking.

Call Five Points Law Group today to schedule a private meeting with one of our skilled adoption lawyers in Birmingham.

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How to Protect a Disabled Persons Right to Public Benefits

If you have a relative who is severely disabled and can not work, you may worry about how that person would continue to receive the public benefits he or she desperately needs if you or someone else in the family were to pass away and leave him or her money. This issue usually comes into play when a parent is planning his or her estate and has a disabled child (minor or adult) to think about. If a parent leaves money to the child, it could disqualify the child from receiving lifesaving benefits, like Medicaid, Medicare, Social Security, and more. So, what is the solution?

At Five Points Law Group, our estate planning attorneys can craft a carefully prepared special needs trust to protect a disabled person’s interests, while preserving his or her rights to public programs and benefits. Here is how these trusts work.

Eligibility for Medicare and Medicaid

For aging parents of a disabled child, it can be a scary time. It may be clear that without public health benefits, a child may have no way to care for him or herself. At the same time, aging parents may want to make sure that their inheritance is not wasted. Thus, through careful estate planning, there are ways to do both leave money to the disabled child, while simultaneously maintaining his or her right to utilize benefits. This is often done through an Alabama special needs trust (SNT).

How Does a Special Needs Trust Work?

There are two kinds of SNTs — a third-party or a first-party trust. The one you use depends on the circumstances.

First-party trusts: A first-party trust is one that is funded using a disabled adult’s own money. This is commonly used when the disabled individual has come into money from some outside source, such as through a personal injury action or an inheritance that was not planned in advance. Perhaps a relative has given the person money. In these situations, the disabled person can establish a trust that protects the money, while maintaining eligibility for SSDI, SSI, or other benefits. There are strict rules about how the money can be spent, and regarding pay-back provisions to Medicaid after death.

Third-party trusts: This type of trust is settled (or “funded”) by someone other than the disabled person. Usually, this is the best option for relatives who want to leave significant assets to a person with disabilities. Under federal and state laws, the money can be used to pay for things that may not already be covered by Medicaid or Medicare, such as certain medical costs, daily living support, or adaptive devices. Since the money never technically becomes the property of the disabled person, it remains largely protected against spend downs and pay-back provisions.

To discuss this option with a skilled estate planning attorney near you, call Five Points Law Group today.

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[mariaarogue]

Is Open Marriage More Likely to End in Divorce?

In recent years, so-called “open marriages” have gained increased popularity. This is especially true of millennials and younger couples who seek to avoid some of the formalities and traditional trappings of wedlock. The reasons for an open marriage are just about as varied and diverse as the people who choose to engage in them. If one reads an article from 2007 and compares it with a psychological study from 2017, chances are there will be a widely differing set of conclusions. In some ways, this belies the fact that religious, institutional, and cultural views may shape outcomes just as much as anything.

However, where the law is concerned, adultery is still adultery. If you are considering an open marriage in Alabama, it is important to understand some of the pitfalls and legal consequences. At Five Points Law Group, our experienced attorneys understand many of the complex nuances of divorce. If you need help, give us a call to speak with an attorney who can help counsel you through your divorce in a non-judgmental and caring manner.

What is an Open Marriage?

If you ask 10 people, you will probably get about five different answers, but an open marriage is simply a marriage in which there is an element of mutually accepted infidelity. In other words, one or both spouses are free to engage in extramarital sexual relationships, usually subject to a number of agreed-upon rules.

Does Mutually Accepted Infidelity Strengthen or Weaken a Marriage?

It is hard to say, but a 2007 article from WebMD shows just how far therapists and society in general have come on this issue. In the 2007 article, the quoted therapists seem to disagree that an open marriage can be good for a healthy sex life or marriage, even saying that such marriages account for less than 1% of all marriages.

Just years later, a 2017 article by Deborah Anapol, Ph.D. published in Psychology Today emphatically proclaims that there are many highly functional polyamorous marriages, including some that last for decades.

The New York Times also recently did a lengthy piece on the pros and cons of open marriages, which portrayed these relationships as a personal choice and one that increasingly more Americans – especially women – are choosing.

So, what is the truth? Do they lead to divorce or not? It is tough to say for certain, but only about one in eight spouses leaving open marriages claim that the open nature of the marriage was the cause of the divorce.

How Alabama Law Views Open Marriages

In general, adultery remains a formal ground for getting a divorce. However, if a spouse commits adultery and the aggrieved spouse accepts that person back and re-engages in a sexual relationship, that ground for divorce is severed. This is thanks to a very old Alabama statute known as condonation. Therefore, if you are in an open marriage and your spouse seeks a divorce due to adultery, evidence of the open marriage may be used to destroy that reason for divorce.

Prenuptial Agreements are Wise

While an open marriage may be just as successful as a more traditional relationship for some, given the extra layer of complexity and the fact that the law does consider extramarital relations a ground for divorce, couples choosing this type of relationship may be wise to speak with an attorney about a prenup or antenuptial agreement that sets forth the relationship and terms of dissolution in advance, in the event either person wishes to change the arrangement later.

For help with a divorce or setting up a prenup or post-nuptial agreement, call Five Points Law Group today.

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[mariaarogue]

When a Nursing Home Will Not Take Your Power of Attorney

You did everything right. You had a power of attorney created for your aging loved one, and even had the loved one sign it. Everything was supposed to be handled, and then it happened. The day came that you needed to place your loved one in an Alabama nursing home, but the nursing home is not honoring your power of attorney. If this describes a familiar situation, you are not alone. Thousands of nursing home residents throughout the state do not have valid powers of attorney. When this happens, it can be frustrating and intimidating, but there is good news. You can still accomplish your goal of protecting and caring for a loved one, even if the power of attorney is not sufficient.

What is a Power of Attorney?

First, it is important to understand the values and limitations of powers of attorney. These are simply legal documents that act somewhat like contracts. One person gives another person the right to make specific decisions for them, in the event they can not do so. A durable power of attorney is designed to last until death and provide an ongoing and uninterrupted ability to make certain decisions for someone else. The most common types of decisions included in an Alabama power of attorney are:

Financial decisions

Real estate decisions

Medical treatment choices

Obtaining medical records

Talking to doctors about the person’s healthcare

Of course, powers of attorney can also limit these powers. Some people might want to give a loved one the right to make some healthcare decisions for them, but they may want to limit that power in some way.

Is the Power of Attorney Valid?

According to Section 26-1A-105 of the Alabama Code, a power of attorney is “presumed” to be valid if:

The principle signs it or directs another to sign it in the presence of a notary public. The principle must acknowledge signature before the notary. In addition to these basic formalities, the principle must be competent to create a power of attorney. While competence is presumed, it can be challenged. If someone learns that the individual signing the document lacked mental capacity to do so, they could bring a court action to invalidate the power of attorney, especially if it was fraudulently created or made through some form of undue influence or coercion.

Why a Nursing Home Might Refuse to Accept a Power of Attorney

While a power of attorney may be valid based on proper formalities, there are numerous reasons why a healthcare provider, including a nursing home, may not accept it or wish to honor it.  These may include:

The document does not specifically authorize health providers to speak with the agent

The document only covers financial decisions

The document only covers healthcare (and not financial matters)

There are specific exclusions listed in the power of attorney

There are suspicions of abuse or neglect

The nursing home suspects the person lacked the ability to make the power of attorney

What to do When a Health Provider Refuses to Honor a Power of Attorney

There are several options. First, you can attempt to file legal actions to enforce the power of attorney. Of course, these are often quite costly and may just lead to lengthy litigation. On the other hand, if the power of attorney is not working, you can also petition a court for a guardianship or conservatorship. If successful, you will receive a court order, granting you the right to make certain decisions for your loved one.

To get help with this process, call Five Points Law Group today.

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[mariaarogue]

Paying for a Divorce When You are Not Working

In many marriages, especially those with children, one spouse often acts as the sole or primary breadwinner for the entire household. In these marriages, the stay-at-home spouse may rightfully be concerned about a number of issues in divorce. Perhaps the most troubling issue for many is how to pay for a divorce. When one spouse controls the funds for the family, it can seem hopeless. The good news is you have options.

Changes in the Marital Unit

In a study by the Pew Research Center, data revealed that in 1960, about 70% of households included a single income-earning parent – usually the father. By 2010, the number had dropped to just over 30%. This means the average family in America today has a completely different makeup than it did just 60-70 years ago. With two parents working, divorces have become a bit more complicated, as has the process of financing a divorce. However, for those in the minority who are stay-at-home parents, it can often be a real concern to pay for a divorce.

The Income Earner can be Ordered to Pay the Cost of Your Attorney Fees

While every divorce is unique, when it comes to divorce, courts seek to balance the situation fairly. If you are not working and are primarily responsible for maintaining the home and caring for young children and your spouse works outside the home, you may be able to petition for your attorney’s fees to be paid by your spouse. It is not a sure thing, but it can work. Here is generally how this works.

Getting Your Spouse to Pay Your Legal Bills

Under Section 30-2-54 of Alabama’s Revised Statutes, you may be able to recover attorney fees if your spouse is in contempt. This can happen when you incur legal bills while attempting to enforce certain court orders, such as temporary maintenance or child support.

The other way to get your legal bills paid, however, is by having your attorney petition the court to award them. The courts favor both parties being represented by experienced legal professionals, as it cuts down on delays and ensures fairness. If you have no income, most judges will recognize the need for your attorney to be paid out of your marital estate. In other words, the income-earning spouse can be ordered to pay.

If you are concerned that your spouse will not be able to afford your fees and his or her own, just remember that a judge will have to review any petition for fees, and that same judge will be aware of your collective assets and debts. Therefore, a good attorney can usually tailor a divorce to suit just about any budget, assuming the parties can reach reasonable agreements without extended litigation.

Talk to an Attorney as Early as Possible

If you suspect you will need to have your spouse pay for your legal bills, contact Five Points Law Group today, as we can often help you plan and prepare for this process. Early planning is key. Just remember that the more information you have going into a divorce, the better your decisions will be.

Throughout Birmingham, the attorneys of Five Points Law Group are here to help, so call today.

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[mariaarogue]

Legal Problems do Not Happen in a Vacuum

A woman was at work and her supervisor started making suggestive remarks that were clearly inappropriate. She told him to stop, but it did not end there. In fact, it got worse. Soon, it seemed like every time she passed him in the hall, there was an unwelcome comment. Sadly, over the course of several months, her marriage began to struggle. She was frustrated with work, her interest in sex and her relationship had diminished, and eventually her husband filed for divorce.

She decided to do something about the problems at work. She filed a sexual harassment lawsuit and ended up receiving a sizeable settlement offer based on her high rate of pay. Before she could even get the check, however, she was informed that she may need to split it with her ex-husband.

If this scenario seems strange or uncommon, rest assured it is not. In fact, it is quite normal. Millions of Americans struggle with marital trouble and many opt to end their marriages each year. Of that number, quite a few are simultaneously dealing with other problems that are legal in nature. At Five Points Law Group, our attorneys have the broad and diverse skills needed to tackle complex problems, even when several legal issues are occurring simultaneously.

What Happens to Discrimination Settlements in Divorce?

The example above is a classic case of a person receiving a settlement from a personal injury or workplace harassment suit while in the middle of a divorce. Because the money is designed to reimburse or make the individual “whole” again, most divorce courts will say the money is part of the marital estate. This means it could arguably become part of the property to be divided in the divorce. If you are using two different attorneys for these matters, it is a great reason to make sure they are talking to each other.

Divorce and Your Estate Plan

A lot of people think their divorce will end everything once and for all. It does not. There are a lot of things that linger after a divorce. Your estate plan is one of them.

Fortunately, under Section 43-8-137 of the Alabama Probate Code, divorce severs your bequests to your ex-spouse, as it is not the sort of thing you want to leave up to chance. Plus, things like powers of attorney, advanced directives, living wills, and trusts all should be immediately updated the minute you even think about filing for divorce. Also, you will want to be quick about updating beneficiary designations like life insurance, deeds, and 401(k) accounts. Divorce does not automatically change those at all.

The Five Points Approach

With attorneys individually skilled in multiple areas of the law, our group of skilled legal professionals can carry you through just about any challenge. Perhaps you are receiving money through a settlement and wish to protect your rights in a divorce, or maybe you are facing a divorce battle and want to protect your heirs from losing an inheritance. Whatever it is, make your first call Five Points Law Group, and let us help you today.

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When Life Changes So Should Your Estate Plan

For some people, making a will is an unpleasant task. Confronting one’s own mortality can make a lot of people uncomfortable, so once the task is complete, it is rare for it to be revisited years later. However, this may not be the best way to look at an estate plan.

Sometimes it makes sense to take a second look at the way things were set up previously. This is especially true when you go through major life events. When life changes, so should your estate plan. At Five Points Law Group, we are here to help.

Big Reasons to Change Your Estate Plan

There are several major life changes that could prompt a person to want to take a second look at his or her last will or powers of attorney. A few common scenarios are:

Children: The birth or adoption of a child or grandchild is an exciting life event and a great reason to review and make changes to your estate plan. Because it is unwise to leave assets to a minor child, a will or trust can ensure that children or grandchildren get the full intended benefit of your estate while protecting them against unnecessary court costs and waste of your estate assets. A will can also provide important instruction to the court on your designation of guardian in case one is needed for a minor child. Additionally, once children are grown and may even have children of their own, you may want to make different provisions for them or for their children.

Divorce: If you made a will while married but then later got divorced, it is probably a good idea to change your will. The good news is you typically cannot leave your estate to an ex-spouse by mistake. This is because under Section 43-8-137 of the Alabama Statutes, any bequest made to a spouse is automatically invalid upon divorce. This does not mean you should still keep your estate plan the same after a divorce. After all, your previous choice to leave everything to a spouse may fail due to divorce, but this means you may not have made adequate arrangements for others in your estate plan.

Health Conditions: Another reason to change your will or powers of attorney is a major change in health condition. For instance, you may have drafted and signed a simple power of attorney when healthy. Today, however, you may be contemplating the possibility that you could need long-term care, home health care, a nursing home, or even hospice someday. With this in mind, there are certain options a skilled Alabama estate planning lawyer can use to modify your wishes to suit your own unique health situation.

Assets: Finally and perhaps most obviously, if you made a will or powers of attorney when you were younger or at a time in life when you had limited assets, it may have been a simple and uncomplicated plan. If years have passed, you may want to take a look to see if your estate plan can adequately protect your estate today. If you have earned significant income or amassed a large amount of savings, then you may be better served with a revocable trust or other planning tools.

How an Alabama Will and Trust Lawyer can Review Your Plan

At Five Points Law Group, we go the extra mile to make our clients comfortable. We know that talking about death, disability, and final affairs is never fun, but it can be a refreshing and renewing process. After all, revisiting your estate plan later in life allows you to take stock of accomplishments and truly appreciate how far you have come. So call us today to discuss your plan with an attorney near you.

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