by Bill Miller | May 28, 2018 | Business, Estate Planning
When someone starts a business, the last thing they want to think about is death. A close second? Incapacity. However, planning for these events is critical to a company’s success. If you are a business owner, you need to include your business interest in your estate plan.
What is “business succession?”
It’s a way of ensuring that a business will continue operating if the owner (or one of the owners) dies or becomes unable to participate for some reason. It also may protect a company when an owner retires or is in the midst of divorce negotiations.
How can I include a business in my estate plan?
First, if you have partners, you can put a buy-sell agreement in place. This document spells out how the business will be handled if you can no longer participate in the company. For example, your buy-sell may provide for an owner’s interest to be bought out by the other partner or by the company itself. Having a good buy-sell in place is no good, however, if there’s no capital to pay for the buy-out. Business owners may use insurance policies, sinking funds, payment plans, or personal funds to purchase another owner’s interest.
Your estate plans must be synchronized with your business succession interests. Does your durable power of attorney address your business interests? Your power of attorney can be broad or limited. Does your agent have the power to make decisions about your business? More importantly, does your agent have the ability to make those decisions?
Does your Will leave your business interests to family members who have little interest in the business? Your loved ones may not be the best people to continue operating the company.
What can happen if I don’t have a business succession plan?
Without the right planning, a business could be in real trouble.
Let’s look at Dan and Bob’s Construction Company. Dan and Bob started their company from nothing. After 30 years, business was thriving and expanding every year. Then Bob suffered a major stroke, something the average 50-year old doesn’t expect to happen. Although Dan and Bob were astute businessmen when it came to building houses, they had failed to put together a business succession plan.
The company was thrown into confusion because Dan did not have the authority to make financial decisions by himself. One of Bob’s sons tried to take his place in the business but had no interests in business of any kind. Bob had not executed a durable power of attorney that would allow anyone to make financial decisions for him, so his wife had to petition for a guardianship/conservatorship. The company suffered cost overruns and angry clients because they fell behind in honoring their contracts.
A buy-sell agreement would have allowed the company to smoothly transition. Bob’s partnership interest could have been bought out by Dan or by the company itself.
Don’t Have an Estate Plan Yet?
The attorneys at Miller Estate and Elder Law help their clients develop estate plans that cover all their assets, including business interests.
For a free consultation with an experienced Alabama attorney, contact us at 256-251-2137 or use our convenient Contact Form. We have offices in Anniston and Birmingham and serve clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
by Bill Miller | May 21, 2018 | Asset Protection, Medicaid
The American dream is to work hard, build your life savings and purchase a home. But what happens when that dream is threatened? What if you want your family members to benefit from your hard work? There are ways to protect your savings from the ravages of long-term care, future creditors and civil judgments.
Protect Your Savings from Medicaid Recovery
In some cases, Medicaid programs must at least attempt to recover money paid to Medicaid recipients. Typically, Medicaid will file a claim against the deceased recipient’s estate. However, there are ways to protect your savings from Medicaid recovery:
- Alabama’s Partnership for Long-Term Care helps people buy long-term care insurance that will cover costs that otherwise might be paid by Medicaid. Although not everyone who applies will qualify, it’s certainly worth looking into.
- Irrevocable trusts are a great way to protect your savings from Medicaid recovery because the assets transferred to the trust are no longer considered your property. Medicaid’s 60-month look back period still applies, however.
Other alternatives to Medicaid:
- You can ask family and friends to agree to care for you in exchange for some type of compensation.
- You may also consider transferring assets to spouses or family members. However, this method could adversely affect your eligibility for public benefits. Another potential problem is taxes. Additionally, once you transfer your assets to someone else, you lose all control over those assets. Those assets are also subject to the creditors and predators of the person you gave them to including divorce, tax liens, bankruptcy filings and lawsuits.
Protection from Creditors and Predators
Some people need to protect their life savings from unscrupulous creditors or dishonest persons. Sadly, sometimes family members take advantage of elderly or disabled individuals by cleaning out their bank accounts with no remorse.
You can establish an asset protection trusts then fund it with your assets. In some cases, you may still receive benefits from the trust though it is protected.
Another option is to give money to family members or friends. However, you lose control of the assets, your beneficiary’s share may be taken by their creditors, and such transfers may hurt your Medicaid eligibility.
There’s one important thing to remember: you have to make sure you don’t violate fraudulent transfer laws when setting up an asset protection trust. If creditors are already filing claims against you, it may be too late to establish and fund an asset protection trust.
It’s best to consult an attorney before taking any steps toward asset protection.
Take Steps to Protect Your Hard-Earned Money.
Are you concerned about protecting your assets? Start planning now. Schedule an appointment with one of the qualified elder law attorneys at Miller Estate and Elder Law Our phone number 256-251-2137. Or you may choose to use our Contact Form to get started on your path to peace of mind.
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by Bill Miller | May 17, 2018 | Estate Planning, Probate
Probate or avoid probate – one of the main issues you must decide when creating your estate plan. For many people, probate is not the best solution for settling an estate. Probate proceedings can be long, expensive, and frustrating for the heirs and the executor. Fortunately, there are perfectly legal ways to avoid probate.
Probate Explained
After someone dies, their property – their stuff – has to go somewhere. So, if the person who died left a valid Will, someone submits the Will to the court to be probated. An executor appointed by the court begins the sometimes tedious process of gathering the decedent’s assets and claims against the estate. The executor pays claims and distributes property is to heirs. Additionally, the executor closes the probate estate when everything is done.
When there is no Will, the property is still distributed. However, the law determines who gets what, not the decedent.
It is usually best for the heirs when the decedent’s property does not pass to them through probate. We’re going to look at three ways to make this happen.
Joint Tenancy to Avoid Probate
With this type of property ownership, two or more people own the property. Each owner has an undivided, equal interest in the property. In joint tenancy, a deceased owner’s interest does not pass to the other joint tenants.
Sometimes people own property with a joint tenancy with right of survivorship. This means that if one owner dies, the other owner gains possession of their ownership interest. In Alabama, this joint tenancy with the right of survivorship does not occur automatically. Instead, legal document must clearly state the right of survivorship.
Property that passes through right of survivorship usually does not become part of the probate estate. Without the right of survivorship, it does.
Beneficiary Designations to Avoid Probate
With most financial accounts and certain other assets, the owner may designate who will receive the asset upon the owner’s death. You’ve probably seen beneficiary designations on retirement accounts, bank accounts, and insurance policies.
One thing to remember is that beneficiary designations trump the Will. Usually, property passed through beneficiary designations will not pass through probate. Instead, it is transferred quickly to the beneficiaries named by the deceased owner.
Although the speedy transfer is great, discuss these designations with your estate planning attorney. Unless your estate plan and the designations are in sync, your heirs could receive more or less than you intended. For example, if your Will states that your three children will inherit equal shares of your estate, but you name your oldest child as beneficiary on your insurance policy, the oldest child will likely receive more than the other two children.
Revocable Living Trusts to Avoid Probate
Trusts are useful estate planning tools. There are various trusts for various purposes, including the revocable living trust.
Revocable means the settlor, the person who established the trust, can change the trust fairly easily. After signing the trust document, the settlor transfers assets to the trust. People often use this type of trust to avoid probate, reduce estate taxes, or manage assets. In general, trusts avoid probate because the trust assets never become part of the settlor’s estate.
A Little Planning Is What’s Needed.
For most people, it’s not that difficult to avoid probate. It just takes some astute estate planning with the assistance of an attorney who knows Alabama law.
The attorneys at Miller Estate and Elder Law have the experience you need to get the estate plan you deserve. Contact Miller Estate and Elder Law at 256-251-2137 to schedule an appointment or fill out our convenient Contact Form. We help clients in Anniston, Talladega, Birmingham, Gadsden and surrounding communities.
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by Bill Miller | May 14, 2018 | Medicaid
Many think they are not eligible for Medicaid because that’s only for elderly people. Nothing could be further from the truth. The Alabama Medicaid program offers Medicaid benefits to qualified children, parents, and caregivers. It’s important to understand the application process and what services may be covered.
Benefits for Children
Some of the services available to kids who qualify for full Medicaid benefits are:
- Dental services until age 19 unless they qualify for this service under another category.
- Up to 14 doctor visits each year and up to 16 days of doctor’s care while admitted to a hospital.
- Eye exams and eyeglasses at least once a year, depending on medical need.
- Hearing screening once a year and hearing aids.
- Certain home health
- Hospital stays, including psychiatric services for people under age 21, x-rays, and lab tests.
- Maternity
- Some prescription drugs.
- Renal dialysis.
- Some transplants.
- Ambulances and non-emergency transportation.
- Services covered by the Well Child Checkup Program.
To receive Medicaid benefits, children must meet some requirements:
- Must be an Alabama resident under the age of 19;
- Living in either a one or two parent family;
- Family income must be below the current level;
- Must be a U. S. citizen or have an approved immigration status.
Children who are not eligible for full Medicaid benefits may qualify under the All Kids Program. Through Blue Cross Blue Shield of Alabama, children can receive health care under low-cost, yet comprehensive, health care coverage.
Benefits for Parents and Caregivers
Some parents and caretaker relatives can receive full Medicaid benefits if they meet the following requirements:
- Have a child under age 19 who is a close relative living at the parent/caretaker’s home. Caretakers not related to the child are not qualified for Medicaid, but the children may be.
- Be an Alabama resident.
- Be a U.S. citizen or an immigrant in good standing.
- Must assign all medical insurance or medical support benefits to the State,
- Must report all household changes like birth, pregnancy, someone moving, address changes, or income changes.
The income of every person listed as part of the house is totaled to see if the family meets Medicaid income requirements.
Applying for Medicaid
Applications can be submitted online or as a hard copy. Qualifying may be difficult and the whole process can be complicated. A sliding scale is used to determine the income limits for the applicant. For example, a child whose monthly family income is $2,003 for a family of 2 may be eligible.
We Can Help with Medicaid Eligibility Concerns.
The attorneys at Miller Estate and Elder Law know how to help you with Medicaid eligibility. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
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Applying for Emergency Medicaid
Estate Planning for All Ages
by Bill Miller | May 10, 2018 | Estate Planning
As we pass through life, we make memories, build families, and learn life lessons. Some memories may bring a smile to your lips and a tear to your eyes. Even if you’ve been entertaining and instructing family for years, it’s still time to consider writing an ethical will.
Isn’t My Regular Will Enough?
An ethical will may also be known as a legacy letter. It’s something in writing, a written expression, that your family may cherish for years. No matter how well you communicate, it’s unlikely you’ve told every family member every little thing about your life. Well, you can include those details, memories, and lessons in your ethical will.
Some of the things you may want to include are:
- Your complete family history.
- A detailed personal history.
- The theories, beliefs and opinions you hold dear.
- Things you’ve done that you are particularly proud of.
- Actions your loved ones have taken that made you proud, but you somehow never talked about.
- Lessons you learned from your parents, grandparents, aunts, and uncles.
- Secrets about your early years that may delight your family.
There’s no wrong way to write your ethical will. Remember, this is not a legally binding document like your Last Will and Testament.
Won’t Writing This Will Take A Long Time?
It’s probably not something you can do in one sitting. Spend some time reflecting on your life. Start a journal or diary and jot down what you think is important. Then, when you are ready, start writing.
Organizing your thoughts is more important than the format you use. You could sort your information into categories or include subheadings like “Our Family History” or “My Early Years.” Keep your ethical will safe by storing it with your other estate planning documents.
When Should I Write My Ethical Will?
That’s up to you and where you are in life right now. People just starting their life’s journey may want to start keeping a journal now. Others may just write their ethical will as important milestones happen.
Make Your Estate Plan Complete.
Estate planning documents give their makers an opportunity to state their final wishes, or what type of medical treatment they want, among other things. While it’s not a legal-binding document, an ethical will can be an important part of your estate plan.
The attorneys at Miller Estate and Elder Law help their clients develop comprehensive estate plans customized to meet their needs. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Although we’re located in Anniston, we also help clients in the Birmingham, Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
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Estate Planning Discussions to Have with Your Family Right Now
