Estate Planning During Times of Economic Uncertainty

Estate Planning During Times of Economic Uncertainty

estate-planning-economic-uncertainty

If we have learned anything from the last few years, it is that economic uncertainty is well…always certain. We’ve experienced stock market fluctuations, rising costs of goods, political changes, tax changes, and shifts in Medicaid and retirement planning. The best way to handle the ups and downs of the economy is to be prepared. No matter what the future brings, specific strategies can help ensure that your estate plan, your loved ones, and the assets you’ve worked so hard for are protected. Let’s dive into how you can stay ahead and prepared.

 

The Risk of Economic Uncertainty on Your Assets

Economic uncertainty can throw your estate plan off balance. The value of your investments, such as real estate, bonds, stocks, retirement accounts, and even the valuation of your house, can fluctuate in value with the market. When the value of your assets decreases, it may reduce the amount you are passing on to your beneficiaries.

Inflation can also affect the value of your savings and how much you pass on to your loved ones. Over time, your loved ones may receive less than you intended. For business owners, there are more risks at stake. Economic changes can affect your company’s profitability and value. Changes in estate taxes, capital gains, and rules can also have an impact on your estate.

 

Smart Estate Planning Strategies

Estate planning goes beyond simply choosing who gets what when you are gone. Proper planning can help protect your assets and ensure that what you have worked for can survive everything from ever changing tax laws to economic changes. Here are a few valuable strategies to consider that could protect you:

1. Spread out your assets.

Consider spreading out your assets in different types of investments, such as stocks, bonds, and real estate. While stocks often fluctuate, they usually bounce back strong when the economy improves. Diversifying your assets can provide safety during downturns and increase liquidity when you need it.

2. Create a trust.

Trusts are a valuable estate planning tool that can protect your assets from creditors and taxes and provide you with greater control over how you manage and pass on your estate.

3. Set up life insurance.

Life insurance can be a safety net for your loved ones. If the value of your other assets goes down, life insurance provides a guaranteed payout that doesn’t depend on the market. It can also provide quick access to cash when other assets might take time to sell or have lost their value. The money from life insurance can be used to help your loved ones cover living expenses, pay off any debts, or pay taxes.

4. Consider gifting.

Gifting allows you to strategically pass on assets without paying taxes. However, there is a federal limit. With proper planning, you can reduce the size of your taxable estate, stay within the limit each year, and pass assets to your loved ones now.

5. Create a business succession plan.

If you own a business, it is essential to have a clear plan in place to ensure your wishes for the company are honored when you can no longer manage it. Whether your wish is to pass it on to family, sell it, or hand it off to a business partner, stating your wishes can ensure it keeps running smoothly.

6. Relocate your investments.

During unpredictable times, sometimes the best move you can make is to shift towards a more stable and conservative approach. Consider relocating your assets into safer investments, such as bonds or savings accounts. Relocating your assets can reduce the risk while keeping your money working for you.

 

Hiring an Estate Planning Attorney

Economic uncertainty doesn’t have to drain your assets. Our estate planning attorneys can help you minimize the risk of losing what you have worked so hard for, help protect your family’s future, and make the most out of your estate. The right strategies can keep you prepared and provide a safety net regardless of the changes that lie ahead. Contact us at (256) 251-2137 or by filling out the form below.

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The Cost of Probate Court in Alabama

The Cost of Probate Court in Alabama

Cost of Probate Court

If you are thinking about probate court, you have probably heard that you should do all you can to avoid it. Proponents of this view cite compounding costs and the emotional toll that probate takes. There is genuine merit to this perspective, and yet a proper evaluation means talking about the real, not imagined, costs of probate.

No fixed rate exists for probating an estate. Cost depends on the size and complexity of the estate, details of the will, whether or not there are any disputes to be resolved or debts to be paid, and where probate is undertaken. Probate fees can be broken down into filing fees and court costs, the estate executor’s fee, attorney fees, professional fees for accountants or other necessary services, and surety bonds. The following breakdown explains how each of these is calculated.

 

Filing Fees

Filing fees vary from county to county. In Baldwin County, you can expect to pay around $58.00, while in Mobile County you are looking at $50.00. In Calhoun County, where our firm is located, the fee is $65.00.

 

Estate Executor’s Fee

Under Alabama law, the executor of an estate can file a request with the court for an executor fee of up to 5% of the value of the estate. This includes up to 2.5% of assets received, and 2.5% of disbursements. In order to reduce the cost of probate, an executor may choose to waive their right to this fee. In addition, when a person drafts their will, they may also waive the requirement that the executor post a surety bond before assuming their appointment.

 

Attorney Fees

Attorney fees vary widely, making even a ballpark figure difficult to provide without some basic information about the estate. In the simplest of cases, an individual may pay a few thousand dollars, but this number can quickly grow as complications arise. To gain a clear estimate of potential costs, it is important to talk to a trusted attorney about the specifics of your case. We charge flat fees for probate and the amount of the fee depends on the complexity of the estate, while other attorneys charge by the hour.

 

Professional Fees

Once more, these fees depend on the size and complexity of the estate. Accounting will vary based not only on the amount but on the types of assets owned as well as whether the estate is subject to federal taxes (there are no state-level taxes in Alabama). Appraisal fees will likewise be a function of assets held. If a business owned by the deceased forms a part of the estate, all of these fees increase substantially.

 

Bond Fees

Before your estate’s executor may be appointed, they will have to post a bond in an amount determined by the probate judge. As mentioned earlier, you may waive this requirement in your will, but a judge may overrule your wishes, especially when minor children are involved in the estate.

 

Miscellaneous Fees

Miscellaneous fees range from insuring and storing personal property to shipping and disposal costs. In cases of complex estates that take months or years to administer, these small costs can pile up—and if your spouse or loved ones have no income of their own, they can become an immense burden as your personal assets will remain out of reach until the probate process is complete.

 

How to Avoid Probate in Alabama

Probate can be expensive, time-consuming, and emotional. Fortunately, there are steps you can take to avoid the process all-together.

Own Assets Jointly with Someone Else

Many house deeds and joint bank accounts have a right of survivorship. The right of survivorship basically says that when one owner passes away, the remaining assets are transferred to the surviving owner. This right of survivorship is not automatic. The co-owners would need to request that it be put in place.

 

Beneficiary Designation

Beneficiary designations are typically used in life insurance, IRAs, 401Ks, and other financial accounts. By naming a person as the beneficiary on the account, when you pass away, the beneficiary would just need to send in a death certificate to the company, and the proceeds would be paid directly to the beneficiary. Thus, avoiding the probate process.

However, it is important to remember that assets with beneficiary designations are not governed by the will. So, for example, if you want all of your assets (including those with beneficiary designations) split between numerous people, then you would need to name numerous beneficiaries on those assets and not rely on the will.

 

Create a Trust

If assets are owned by a trust, and the trust says which beneficiary is to receive which of the trust’s assets upon your death, then these assets will not pass through probate. There are many options when it comes to setting up trusts, including revocable and irrevocable trusts to name a few. It is recommended that you speak with an experienced estate attorney about your needs and goals to learn more about the options that are available to you.

 

Contact Us

Miller Estate and Elder Law can assist you with every step of probate and, if you act early, can help you determine whether going through probate even makes sense in the first place. After all, trusts and other such legal tools allow you to build an estate plan that skirts the need for probate—an option that is often cheaper in the long run for those with complex assets.

To learn more, join us for a free estate planning workshop and discover the steps needed to protect yourself, your loved ones, and your legacy. Or give us a call at (256) 251-2137 to speak with a member of our legal team, or contact us by filling out the brief form below.

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I’ve Heard About a Living Trust, So What Is It?

I’ve Heard About a Living Trust, So What Is It?

Living Trust

You may be among the many people asking the common question, “Should I have a will or a trust…and what is a trust?” Understanding the terms that come with estate planning is the first step in figuring out the best option for your unique situation.

 

What is a Living Trust?

A living trust is a legal document that states who will manage your assets if you become incapacitated or pass away. It also specifies who will receive your assets and how they will be distributed, all while avoiding the probate process. As the trustee of your trust, you can remain in full control over your assets—meaning you can still buy, sell, or manage them as you wish. Since a living trust avoids the court, it allows your financial matters to stay private.

 

Types of Living Trusts

There are two main types of living trusts: revocable and irrevocable. Each comes with its own set of pros and cons.

Revocable Living Trust: This type of trust is flexible and allows you to modify it anytime, meaning you can add or remove assets and beneficiaries. With a revocable living trust, you stay in control, as you can name yourself the grantor, the trustee, and the beneficiary while you’re still alive. However, it does not provide protection from creditors or estate taxes.

Irrevocable Living Trust: In contrast, this type of trust provides asset protection from nursing homes and creditors. An irrevocable trust requires you, the grantor, to give up control of the assets. Changes to an irrevocable trust can be challenging, but it can also offer other benefits for protecting your wealth against tax reductions.

Listen to our podcast episode, “Revocable vs. Irrevocable Trusts,” for a deeper dive into these two main types of trusts.

 

A Living Trust vs. a Will

A living trust avoids the probate process altogether, meaning your loved ones can access their inheritance much sooner. On the other hand, a will can only go into effect after you pass, and must be approved and overlooked by the court, delaying the distribution of your assets.

Download our free e-Book, “5 Essential Estate Planning Documents Every Adult Needs,” to gain valuable information on protecting your legacy from courts, nursing homes, and taxes.

Understanding these documents can help you decide if a living trust is the right choice for your legacy. Fill out the form below to connect with our team for personalized estate planning guidance.

 

Contact Miller Estate and Elder Law

If you are looking into long-term care options, the experienced attorneys at Miller Estate and Elder Law are here to help guide you through the process. Contact us today at (256) 251-2137 or by filling out the form below.

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3 Types of Long-Term Care

3 Types of Long-Term Care

2024 Presidential Election

As we get older, we might find it harder to tackle everyday tasks, and that’s where long-term care comes in to provide support and manage quality of life. It’s not just about physical health; it’s also about feeling good emotionally and staying as independent as possible. Long-term care can help with tasks such as eating, bathing, mobility, and running errands, while still giving you or your loved one flexibility and independence to live their lives.

About 70% of people 65 years and older will need some form of long-term care in their lives, and it can be confusing to know what kinds of care should be considered. So whether it’s for you or a loved one, here are three of the more common forms of long-term care you may one day find yourself considering.

Three Types of Long-Term Care to Consider

Assisted Living

Assisted living facilities provide care for older adults who need help with daily activities but don’t require constant health assistance. These communities typically offer a variety of assistance levels, making them a flexible option depending on what individuals may need at different stages of aging. It can vary from 24/7 supervision to more independent setups where help is available when needed. This flexibility allows one to choose between living alone or in a group, depending on the care required. Many 55+ communities also fall into this category, where residents can enjoy independent living while having assistance with tasks like meal preparation, housekeeping, and personal care as their needs change.

Skilled Nursing Facilities

Also known as nursing homes, these establishments are ideal for those who require constant medical care and supervision. These facilities staff trained nurses who provide various services, like rehabilitation therapy, personal care, dietary services, and social activities. Skilled nursing facilities are ideal for those who are managing more serious health issues or injuries that require ongoing care and support.

Home & Community-Based Services

For many people, receiving long-term care in the comfort of their own home is their first preference. Home and community-based services allow individuals to remain independent while receiving the essential support needed. These services can include personal care assistants who help with daily tasks, meal delivery programs, transportation services, and adult day care centers. This option can often be more cost-effective than moving into a care facility, as it allows one to live in their own home.

Planning for the future and evaluating the options available for long-term care is a necessary step of aging. While the future is uncertain, and aging might bring up some unexpected challenges, it’s essential to have a strategy in place to protect your hard-earned assets and your health. By exploring your options now, you can ensure that you or your loved ones receive the proper care.

Contact Miller Estate and Elder Law

If you are looking into long-term care options, the experienced attorneys at Miller Estate and Elder Law are here to help guide you through the process. Contact us today at (256) 251-2137 or by filling out the form below.

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How the Outcome of the 2024 Presidential Election Could Impact Your Estate Plan (and How to Prepare)

How the Outcome of the 2024 Presidential Election Could Impact Your Estate Plan (and How to Prepare)

2024 Presidential Election

As the 2024 presidential election approaches, significant changes in tax policies and estate planning regulations are on the horizon.

In 2017, the Tax Cuts and Jobs Act (TCJA) law passed, which doubled the estate tax exemption—the amount that a person or couple can give away without paying gift or estate taxes. As of 2024, an individual can gift up to $13.61 million, and a married couple can gift up to $27.22 million without being taxed on those amounts. However, the TCJA is set to expire at the end of 2025. Depending on inflation, the exemption amounts are forecasted to drop to around $7.5 million for individuals, and $14.5 million for married couples.

The TCJA may or may not be extended, and this is based on who ends up in the Oval Office next. This underscores the importance of staying prepared and planning ahead to protect your estate and finances, no matter the outcome of the 2024 election.

7 Ways to Protect your Estate During Uncertain Times:

  1. Stay Up to Date: Monitor political updates and potential policy changes. Understanding how proposed modifications could affect your estate plan and financial health will help you make the best possible decisions for your unique situation. 
  2. Keep Your Estate Plan Updated: Reviewing your estate planning documents every 3–5 years is always recommended, but it is particularly essential when policy changes are likely. Take this opportunity to review your wills, trusts, beneficiaries, and power of attorney documents.
  3. Explore Gifting Strategies: Consider making strategic gifts during an election year. By transferring assets now, you can reduce the size of your taxable estate before any policy changes take effect and make the most of the current exemption limits.
  4. Set Up a Trust: Establishing a legally sound trust can help protect your assets. Trusts not only protect your assets from potential tax increases, but they also ensure your assets are managed according to your wishes and can be seamlessly transferred to your beneficiaries when the time comes.
  5. Seek Professional Advice: Estate planning may feel daunting, but seeking personalized support from an estate planning attorney will leave you with peace of mind, knowing your assets are protected—especially as tax policies evolve.
  6. Flexibility is Key: Be prepared to adjust your estate plan as new policies are implemented. Flexibility allows you to respond proactively to changes and safeguard your legacy.
  7. Prepare for Future Health Care: Consider how changes in health care policies might affect your expenses and estate plan. It’s important to ensure your plan covers health care and long-term care costs and provides the care you need.

Contact Miller Estate and Elder Law

Staying informed and flexible when reviewing or implementing changes to your estate plan will help your keep your assets safe from creditors and predators, and ensure your final wishes are honored in the future. Whether you are reviewing your current plan or exploring new strategies, the experienced attorneys at Miller Estate and Elder Law are here to help guide you through the process. Contact us today at (256) 251-2137 or by filling out the form below.

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Estate Planning Essentials for Single Parents

Estate Planning Essentials for Single Parents

Estate Planning for Young Couples

Parenting is challenging enough, and being a single parent is an even more demanding journey filled with countless obstacles. Managing day-to-day responsibilities while caring for children alone can feel overwhelming, especially without a partner to help split the load. One of the biggest stressors often arises when considering the “what ifs” of the future. What would happen to your children if something were to happen to you? This is where estate planning becomes essential for single parents. It’s not just about legal documents; it’s about protecting your family and ensuring their care and financial security, no matter what happens to you.

Estate Planning Essentials

Below are six different legal documents you should consider as a single parent.

  1. Living Trust: A living trust is one of the most powerful tools for single parents. This legal arrangement allows you to manage your assets fully during your lifetime. Once you pass or in the case of incapacitation, your trustee, someone you’ve designated in advance, takes over the management of your trust according to your specific instructions. This ensures that your children’s inheritance is managed wisely rather than being handed over in one large lump at a young age. A living trust also helps avoid the lengthy and costly probate process.
  2. Nominating a Guardian: Another crucial decision to make is to designate a trusted guardian for your minor children. Your designated guardian will step in on your behalf if anything happens to you. It is essential to leave your wishes and intentions clear in legal documents to prevent the court from making this critical guardianship decision for you.
  3. Durable Power of Attorney: A durable power of attorney allows you to assign someone to manage your finances and legal documents if you are unable to make decisions on your own. Without a durable power of attorney, someone would have to petition the Probate Court to become your conservator. This would lead to an expensive and time-consuming legal process.
  4. Health Care Proxy: Similar to a power of attorney, this allows you to designate someone to make medical decisions on your behalf if you cannot do so yourself. Having a health care proxy in place provides peace of mind, ensuring your wishes and health care choices are respected even when you can’t communicate them yourself.
  5. Writing a Will: A will is still essential even if you have a living trust. A will allows you to name an executor to handle your estate and outlines how you want your assets to be managed and when to be distributed. Additionally, a properly drafted will allows you to name a guardian for your minor children.
  6. Life Insurance: Life insurance is an affordable way to ensure your children’s financial needs are met if something happens to you. However, since minors can’t directly receive life insurance payouts, setting up a trust to manage these funds effectively is vital.

Contact Miller Estate and Elder Law

Parenting presents its own set of challenges and complexities, and planning for the future should not add to these concerns. A well-crafted estate plan can leave you with peace of mind, knowing that your children will be cared for and their future is protected. If you have any questions, please fill out the form below to start your estate planning journey or contact our office at (256) 251-2137.

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