Alabama Opens Door for More Retirement Distributions in Divorces

Until recently, Alabama courts were unable to force parties to divide retirement benefits in a divorce unless the parties had been married for at least 10 years. However, under a new Alabama law, courts will now be allowed to use discretion in awarding the division of retirement accounts in all divorces.

Why Limit to 10-Year Marriages?

There is good reason for the old restriction. Under the old theory, a person who is working to earn retirement benefits, such as pensions and 401(k) plans, is doing all the work to earn the money. Since forcing a withdrawal can trigger steep penalties and unintended taxes that could eliminate much of the benefit and value of such plans, the old law allowed the parties to postpone actual payment until the person began receiving the retirement checks. So, if a husband had a 401(k), the court can award up to 50% of that retirement account to his ex-spouse. But he would not be required to start distributing his ex’s share until he actually retired and began drawing on the account.

The problem, of course, is that this manner of property division keeps a divorced couple potentially connected for decades, even until death. This does not favor finality or swift resolution and separation of marital bonds. Although the old law did allow the parties to agree upon a lump sum, this essentially forced the difficult compromise of losing money to penalties and taxes in exchange for finality. By limiting these types of divisions to longer marriages, courts generally would offset the difference by requiring larger awards from other sources, thereby protecting the benefits of retirement accounts.

How Does the New Law Change Things?

Under HB 208, Alabama lawmakers decided it made more sense to allow judges the discretion to award retirement divisions in all marriages. This does not mean judges will be required to divide retirement accounts in short marriages. It simply means that it is open to debate in divorce cases. This is long overdue, because income has changed significantly since the original law was enacted decades ago.

Intuit suggests that about 34% of Americans currently are employed by the ‘gig economy,’ meaning they are freelancing or working at jobs that are temporary and usually carry no retirement or benefits, according to CNN Money. Furthermore, with income equality steadily rising, and women making more than at any time in the past, it makes sense to start looking at retirement distributions differently and with a more modern view that allows for a case-by-case analysis. Divorce lawyers have been negotiating retirement distributions for years, as part of settlements; this law just gives judges the ability to do the same.

Hiring a Birmingham Divorce Lawyer

Family courts are among those with the greatest number of pro se (self-represented) individuals. Unfortunately, this often results in a lot of long-term problems, such as endless disputes, unresolved tax and financial complications, and repeated, unnecessary court appearances. The Birmingham family law attorneys of 5 Points Law Group can help you efficiently resolve your divorce without as many surprises. Laws change frequently, so what works today may not work tomorrow. Call (205) 263-0743 or visit us online today to get timely advice to your divorce questions.

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Divorce Courts Now Deal With Disputes Over High School Athletics

There are plenty of things to disagree about in a divorce case. Who gets the kids on major holidays? Where are we meeting to make the swap this weekend? In recent years, courts have been mediating a new type of dispute between divorcing spouses – should the children play high school sports?  Just as is the case with determining the custody of a minor child, Alabama courts will generally look to what they deem is in the best interests of the child. Of course, this is often subject to much debate.

Birmingham divorce attorneys often advise clients on Alabama law, but it is a moving target when it comes to certain high school athletic programs. In particular, recent studies on head injuries associated with high school and college football have led some to rethink the wisdom of letting children play.

Recent Disputes Over High School Football in Family Courts

One father in Pittsburgh is fighting to keep his son from being able to continue playing high school football. That father, according to the New York Times, believes that the risks are simply too great and therefore the teen should not be allowed to continue. On the other hand, the man’s ex-wife strongly supports their son continuing to play, despite the fact that the young man has had multiple concussions. It is a power struggle, in which both parents definitely have valid and understandable arguments.

As The Times explains, the mother feels like her son has a lot to gain from athletics. Meanwhile, the father feels that his son is jeopardizing long-term potential and well-being by continuing to risk his health. So, how can a court resolve this dispute?

Family Court Involvement in High School Sports

It is important for anyone going through this type of dispute to understand that no matter how much a teenager may express his or her wishes, ultimately the courts will presume that both parents are legally permitted to make these decisions on behalf of their minor children. So long as both parents can come to an agreement on these matters, a court is probably not going to be involved. Courts generally get involved when the parents cannot agree.

Risks Associated With High School Football

The links between high school football and head injuries have only begun to be explored through research, but one study suggests that high school football players are nearly twice as likely to suffer a concussion as their college counterparts. The study, according to Frontline, also suggests a potential link between repeated head injuries and a number of conditions. For instance, retired NFL players tend to have a far higher average rate of conditions, such as clinical depression, suicidal ideation, Alzheimer’s disease, and traumatic encephalopathy. Frontline is careful to point out that there has been no clear or definitive link proven to date, but the research certainly does reveal a burgeoning crisis, especially among younger athletes – namely high school football players.

What to do if You And Your Ex can Not Agree About High School Sports for Your Child?

In almost all cases, you are better off if you can reach an agreement about what is best for your children. The last thing you want to do is give teenagers a reason to drive an emotional wedge between you and your ex. Instead, you should work closely with your attorney to reach an agreement. Ultimately, you should discuss your concerns with an experienced Birmingham family law attorney. Five Points Law Group can help with even the most difficult family law disputes. Call (205) 263-0743 to speak with an attorney about your case today.

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Trusts for People with Disabilities

One of the primary concerns people have as they age is protecting their children, grandchildren, and other people they love. This can be complicated when an adult child is living with a disability.

Current estimates suggest that as many as 48.9 million Americans living outside of institutions are living with disabilities. As many as 24.1 million have severe disabilities, according to the National Service Inclusion Project (NSIP). This means that a lot of Americans may die each year, leaving a surviving disabled adult child or other close relative. When planning, here are a few questions people might want to ask:

• Who will take care of this person when I am gone?
• How will this person obtain medical care without my help?
• If I leave this person all my money, who will manage the funds?
• If I leave this person money, will he or she lose Medicaid and Medicare eligibility?

These are just a few of the big questions families must ask when they are providing for a disabled adult child or other close relative. Fortunately, there are things people can do right now to protect their loved ones for years to come.

Types of Trusts

A trust is just a document that establishes a set of rules and procedures for managing and distributing assets that are owned and controlled by that document. There are many kinds of trusts. For instance, most trusts are established as revocable, meaning they can be revoked or changed during a person’s life. There are also irrevocable trusts. One people put assets into that type of trust, they cannot change their mind and take things back out of the trust. There are also special needs trusts, which are set up to protect people with disabilities.

Funding a Trust

There are two basic ways to fund a trust – self-settled and third-party settled. A self-settled trust is one that is funded by the person who is intended to receive its benefits. In other words, you put money in a trust that is set up to provide for your own care and upkeep. On the other hand, a third-party settled trust is one that is funded by someone other than the individual who will receive its benefit.

Special Needs Trusts (SNT)

A special needs trust is often set up to maintain eligibility for public aid and other needs-based benefits, like Medicaid, Medicare, Social Security, and so forth. These trusts are often quite complicated and require the careful review and assistance of an experienced attorney.

Rules for SNTs

In August of 2017, the Centers for Medicare and Medicaid Services (CMS) released guidelines entitled, “Implications of the Cures Act for Special Needs Trusts. In this release, CMS provided clarification on the requirements for establishing a workable SNT.

A properly drafted SNT must meet the following:

• Disabled adult is under 65
• Person must have a qualifying disability
• Trust must be set up solely for that person’s benefit
• Trust reimburses the state for all money left over after death (up to the amount of free care paid by the state while alive)
• Can be established using the money of a loved one or the disabled person created on or after December 13, 2016)

Estate Planning for Disabilities

If you have loved ones with disabilities, there can be a lot of public benefits to preserve, as well as potential tax consequences. In Birmingham, the experienced estate planning lawyers of Five Points Law Group can carefully review the facts of your unique situation and look for the best option to protect those you love. No single solution is good for everyone. Get caring and knowledgeable advice. Call (205) 352-4455 to schedule an appointment today.

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Preparing for the High Cost of a Nursing Home Stay

Not all estate planning is about wealth building. In fact, these days most Americans are less concerned about what happens if they die, but rather, they are more worried about what will happen if they live too long. According to the Social Security Administration’s (SSA) life expectancy tables, the average American male who is currently 65 can expect to live 84.3 years of age. A woman aged 65 can expect to live to 86.6.

The SSA reports that 25% of those living past 65 will also live to be over 90, and about 10% of them will live past 95. With longer life and better medical care, people may be living longer, but longer life also means higher medical costs.

Think Your Savings are Safe?

A married couple that has saved $1 million for retirement has done pretty well. By all measures of success, such a couple should feel reasonably proud of their savings and confident that it will last through 20 years of retirement (65 to 85), assuming they have a modest annual budget, they own their home, and healthcare costs can be handled through Medicare.

Average Cost of American Nursing Home Care

A 2015 Cost of Care Survey by Genworth suggests that the national U.S. average cost of long-term skilled nursing home care is about $80,000 per year.  For Alabama, it is around $69,000, and for the Birmingham area, it runs $73,825. According to Lifehappens.org, studies show that the average length of a nursing home stay is about 835 days, costing a total of $200,000. Of course, some people with chronic or severe conditions may require lifelong nursing home care at the end of life. Imagine a five-year nursing home stay: It could easily cost $400,000.

Paying for Care

Fortunately, there is Medicare, right?  Well, not exactly. Medicare only pays for up to the first 100 days of long-term care. Technically, Medicare is only designed to pay for short-term rehabilitation. So, if you need rehab after an injury, Medicare will pay for it, so long as you are making progress and your physicians believe you will recover and be able to return home. If, however, you require long-term care, Medicare will stop, and you will have to pay out of pocket for the care. That is unless you have planned ahead.

Long-Term Care Insurance

Many seniors over the age of 60 are smart to invest in a long-term care insurance policy, but these policies are not cheap. If you have saved a million dollars, you should have to start putting your budget toward high premiums, not to mention the fact that these policies are often quite limited and only cover a year or two of care.

Medicaid as the Primary Payer of Nursing Home Care

For the majority of Americans in nursing homes, Medicaid will pay the bill. For those with a lot of assets, it can be a challenge to understand that there are options for becoming eligible for Medicaid in order to preserve hard-earned wealth. There are often creative estate planning solutions that can shift assets to a spouse living outside of the nursing home in order to avoid having to use your entire retirement income on the nursing home bill. By setting up a qualifying trust or simply changing the ownership of certain assets, many seniors are able to preserve their savings, while ensuring that they are well-positioned to use Medicaid if they ever require nursing home care.

Birmingham Estate Planning Attorneys

If you are approaching retirement or are already in retirement, you should consider the likelihood that you may need to stretch your retirement savings for 30 or more years. Will your savings last that long if you or your spouse require nursing home care? The attorneys of 5 Points Law Group are dedicated to helping you preserve wealth and protect your savings. Call (205) 352-4455 to schedule a private consultation to review your unique retirement and estate plans today.

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Understanding How the New GOP Tax Law Affects Alimony

If you have been paying attention, you already know the new sweeping changes made by the GOP’s tax law will have long-range effects throughout the economy for decades. One big change has divorce lawyers across the country on edge – the elimination of the alimony deduction. For over 75 years, the alimony deduction has been a strategic aspect of negotiations between divorcing couples. Going forward, however, this is now off the table.

What was the Alimony Deduction?

Under existing IRS rules (See Publication 504), alimony was generally treated as a deduction for the paying spouse. The recipient then paid tax on the money, just like all other income. This somewhat softened the impact of being forced to continue paying money to an ex-spouse.

Theories Behind an Alimony Deduction

The logic is pretty clear. A person is ordered to pay an ex-spouse a portion of his or her money, most often because the ex-spouse earns less money. The paying spouse is usually the one who makes more (aka “the breadwinner”). It can be a hard thing to accept that you have to continue paying an ex, long after you are divorced. The paying spouse is getting nothing out of the continued relationship, while the recipient is getting income. The tax deduction acknowledged the fact that the alimony payments are a total loss for the payer, as he or she is not receiving goods or services for the money paid. Here is what the new law means for married couples looking to get divorced after 2018.

Changes Took Effect on January 1, 2019

The new law does not take effect immediately. Instead, it will only apply to those who get divorced after December 31, 2018. So, those who are considering divorce in 2018 may want to consider doing so quickly, as the law will not apply to those already paying alimony.

Settlement Negotiations Will Change

Previously, tax benefits of alimony were a strong consideration for higher income spouses. Now, without the benefit of any deduction, other items may be used to offset the implications of this law. In other words, we will likely see higher property distributions, lump sum payments, retirement divisions, and so forth being offered in lieu of alimony payments.

Consider a Prenuptial Rewrite

For those who have signed prenuptial agreements in the past, it may be wise to see an attorney to do a quick rewrite before 2019. After all, one common provision in many prenup agreements is a higher alimony payment (which includes tax benefits for the paying spouse) in exchange for less property distribution and less division of other assets, like retirement accounts, pensions, annuities, investments, and business interests. Given the lack of a tax benefit for alimony payments, those with prenups may want to strongly consider paying a little money to have an experienced divorce lawyer go through the old prenup to make sure it remains a viable and beneficial agreement going forward.

Getting Advice from an Alabama Divorce Lawyer

Whether you are considering a divorce, facing one right now, or just looking to take proactive steps to update your prenuptial agreement, the attorneys of 5 Points law Group are available to answer your questions and help you stay up-to-date with the most recent changes in the law. Call (205) 352-4455 or visit online to speak with an attorney today.

 

 

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What are Grandparents’ Rights in Alabama?

Divorce is painful enough on parents, but sometimes divorces also have a devastating impact on grandparents and other relatives. The death of an adult child is always a terrible blow, and a subsequent separation from the children of that child can be devastating.  For a grandparent, losing the right to see grandchildren can be overwhelming and quite simply unfair. If you are struggling to see grandchildren in cases such as these, a Birmingham divorce lawyer may be able to help.

Alabama has chosen to create a specific statute that protects grandparents’ rights. However, the law has some particular requirements. Let’s take a look at the new law, and three common examples of how it might apply.

Grandparents Visitation Statute

As a preliminary matter, the law is not implicated unless there is a dispute, meaning the law comes into play when a grandparent must actually petition a court for the right to see a grandchild. In such a situation, Section 30-3-4.2 of the Alabama Code provides that a grandparent is entitled to reasonable visitation with a grandchild, if the grandparent can prove that not allowing that visitation would be detrimental to the grandchild. This is called the “harm standard,” and is a tough standard to meet. There are four situations where the law actually applies:

• Marriage of the parents ended by divorce, or one of the parents has died
• Maternal grandparents of a child born out of wedlock
• Paternal grandparents of a child born out of wedlock (and paternity is proven)
• There is a pending action to terminate parental rights

Parents Refuse Visitation

Alabama generally follows the Supreme Court decision in Troxel v. Granville, where the court held that a parent has a constitutional right to decide whether to permit or restrict visitation. So, if two married parents do not wish for a grandparent to see the children, there is not a lot a court can do about it, except perhaps in extreme examples.

Divorced Parents

The law allows grandparents to petition for visitation when there is a divorce. This, of course, assumes that the parents disagree. Often, at least one parent agrees that the grandparents should have visitation, though petitions are more generally necessary when that parent is unable to facilitate visitation with the grandparents himself or herself.

One Deceased Parent

Another common example is similar to what happened in Troxel v. Granville. When one spouse dies, the surviving spouse might choose to limit or even prohibit the parents of the deceased spouse to visit the children. This situation is complicated, and if there was a sufficient relationship between these grandparents and the child, a court will entertain a petition for visitation.

Loss of Parental Rights

While it may not seem fair, a parent’s own termination of parental rights will be imputed to his or her own parents. Under the statute, the parent of a parent who lost parental rights through a court termination process will also not be able to petition for visitation. Therefore, a person who loses parental rights also loses visitation rights for his or her own parent.

Adoption Severs Grandparents’ Rights

Finally, when a child is adopted to someone outside of the family, grandparents will have their visitation rights terminated.

Questions About Grandparents’ Rights in an Alabama Divorce

If you are a grandparent, you may worry about how your own child’s divorce will affect your ability to maintain a strong and lasting relationship with the grandkids. Contact 5 Points Law Group to discuss your situation and find out if you may have options for protecting that relationship. We believe in caring, compassionate, and thorough representation. Do not keep worrying; find out your rights today.

When a Child Gets to Decide Where to Live After Divorce

Divorce is hard. A custody battle can be worse. Nothing can prepare a parent for watching his or her child have to make a painful decision like where to live after a divorce. Fortunately, this is partly why Alabama law does not put that sort of weight on a small child. In fact, children are never forced to make such statements. A child is rarely forced to comment on his or her preference if the child does not want to.

Furthermore, if requested, most judges will appoint a guardian ad litem to represent the child. This attorney’s role is different than most in that he or she is bound to advocate for the best interests of the child rather than simply to pursue the child’s preferences.  Those preferences and concerns can be articulated them to the court through the attorney, though a duty of confidentiality applies as with all clients.

Alabama’s Best Interests of the Child Standard as Applied to Joint Custody Requests

Under Section 30-3-152 of the Alabama Family Law Code, the court must consider a set of statutory factors when reaching a decision about joint custody. These factors include:

• How easily the parties get along and agree on things
• How well the parties are able to cooperate and make joint decisions
• Whether and to what extent each parent works to encourage the child to maintain a healthy and loving relationship with the other parent
• Evidence of past or present child abuse, neglect, domestic violence, or other harmful behavior by either parent (toward the child or each other)
• Where the parties actually reside in relation to how easy it would be to maintain joint custody arrangements

Age at Which Child’s Preference is Considered

In some states, like neighboring Georgia, the law sets a designated age at which a minor child’s consent or preference creates a presumption which results in children’s preferences being given great weight. Alabama, however, sets no specific statutory rule. Instead, the family court judge has wide discretion and must consider a child’s wishes, but is never bound by them. A few things that typically are considered in this decision are:

• Is the child mature enough to understand the consequences of his or her statements?
• Are the child’s wishes based on reasonable expectations and intentions?
• Has the child been promised anything or bribed to make statements?
• Are the child’s wishes clearly against his or her best interests?

While these can be tough to ascertain, experienced judges and guardians ad litem are usually quite effective at determining whether the child has legitimate reasons for his or her wishes. If reasonable and valid, those preferences will be considered along with all of the other factors.

How an Experienced Custody and Divorce Lawyer Can Make a Difference

It can be tempting to encourage a small child to state his or her preferences in order to “win” a custody dispute. Many people make the tragic mistake of pitting children against their spouses in a divorce. This type of intentional alienation is not good for the children, no matter how much parents may dislike each other.

Having a skilled and experienced family law attorney by your side can give you the confidence to make better choices. Sometimes it just helps to know you have someone to turn to for those everyday questions challenges and disputes that will invariably arise during a divorce. For help with your custody dispute or divorce, call 5 Points Law Group today.

 

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Your Rights as a Pregnant Woman in the Workforce

According to reports by The Guardian, roughly 54,000 women lose their jobs each year due to maternity leave or pregnancy discrimination. Discrimination may include harassment, pressure to resign, reductions in pay or benefits, or outright termination. Sadly, a 2016 report by the Partnership for Women and Families explains that Alabama ranks fifth in the nation for the most charges of pregnancy-related discrimination per capita. It seems the most affected industries are healthcare, retail, and hospitality.

Alabama Protections

Unfortunately, Alabama remains one of just four states (Alabama, Indiana, South Dakota, and North Carolina) that have no state legislation offering clear protections against pregnancy discrimination. However, Alabama does protect certain other related rights of women in the workforce.

Breastfeeding Rules

Under Section 207(r) of the Fair Labor Standards Act (the law that governs minimum wage and  overtime laws), an employer with 50 or more employees shall provide a reasonable break time to express breast milk, and a place to do so within the workplace, until the child turns one year of age.  Caveat – if an employer violates this statute, Congress did not allow the employee to bring suit under the Act.  Under Alabama Code Sect. 22-1-13, a woman may breastfeed her children in any place (public or private) where she is lawfully permitted to be. Although the law is silent as to whether employers are required to allow breastfeeding at work, the law is written broadly and could arguably cover this.

State Employees

Likewise, under Alabama regulations at Sect. 670-X-14, state employees must be allowed to use their sick time for pregnancy-related disability. This means they may use accrued sick time as soon as their doctor determines they can no longer work, due to the pregnancy. The, upon being cleared to return, they must do so in order to preserve protections.

Federal Protections

Even though Alabama offers no statutory protections to clearly outlaw discrimination against pregnant women in the workforce, the federal Pregnancy Discrimination Act (PDA) applies to many women in Alabama. The law, when it applies, requires employers to comply with federal law and not discriminate against women based on pregnancy.

The federal law only applies to employers with 15 or more employees. The law treats pregnancy just like any other disability, requiring that “women affected by pregnancy or related conditions must be treated in the same manner as other applicants or employees who are similar in their ability or inability to work.” See Equal Employment Opportunity Commission (EEOC).

What Does Federal Law Prohibit?

While not exhaustive, here are a few of the basic protections and prohibitions provided in the federal law:

• Employer cannot “single-out” pregnancy-related conditions in order to prohibit pregnancy employees from working
• Employer must allow a pregnant employee to continue working so long as she can do so with reasonable accommodations but only if the employer grants reasonable accommodations to other employees for non-pregnancy related issues.
• Must hold a job just as long as the employer would for any other disabled worker
• Must have a leave procedure that is the same for pregnant and disabled employees

Other Options for Pregnancy Leave

If you become pregnant and cannot take advantage of the Pregnancy Discrimination Act, you may still be eligible for protections under the Family and Medical Leave Act, which, if applicable, can allow a new mother to take up to 12 weeks of unpaid leave. However, FMLA only applies to large employers with 50 or more employees, and you must generally have been employed for at least a year for the law to apply.

If you believe you are the victim of employment discrimination based on your gender or because you are pregnant, contact Five Points Law Group to discuss your situation and learn more about protecting your rights. As illustrated above, Alabama employers routinely violate federal equal employment laws, making Alabama one the least compliant states in the country. An experienced Birmingham employment discrimination attorney can work to protect your rights and your career.

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