Why You Should Not Have an Investment Broker or Insurance Agent do Your Estate Plan

Perhaps you have got a local insurance broker or investment advisor who has long been your most trusted source of investment and retirement planning advice. This person has helped you build successful investment products, told you just when to buy and sell stocks, and maybe even led you to substantial wealth throughout your working years. Now, as you approach retirement and your golden years, you are considering how you want to establish your final estate plan to best preserve your assets for your heirs and leave a sizeable legacy for those you love.

 

Do you go back to your insurance agent or investment advisor? Do you hire a lawyer?  Ultimately, it is entirely your decision. Before you make your choice, here are a couple strong reasons to consider hiring an experienced estate planning attorney instead of a commissioned sales person.

 

What Duties Does Your Insurance Agent or Broker Owe You?

 

As the old adage goes, ‘follow the money.’ If you want to know who is really looking out for your best interests, just ask yourself how your trusted advisor gets paid. Insurance agents and investment brokers are generally paid a commission, meaning the more they sell you, the more money they make. Therefore, a lot of insurance agents are keen to lobby for you to purchase annuities and whole life insurance products. Perhaps a reverse mortgage or bond product would be a good fit. Ultimately, many of these so-called ‘investment products’ are nothing more than poor investments that mostly benefit the salesperson who is pushing them.

 

Should Your Agent or Broker Even be Handling Estate Plans at All?

 

The Alabama State Bar Association takes a strict view of the unauthorized practice of law. While many investment advisors may be wonderful individuals with good intentions, they should not be advising clients on complex legal rights, such as trusts, estate planning, and the drafting of wills. Many investment advisors will claim that they have the documents reviewed by an attorney, who in turn advises you, the client. These types of loophole options do not serve the consumer well. After all, where do that lawyer’s loyalties truly rest? With you or the advisor?

 

Advisors are Not Necessarily Fiduciaries

 

There is still talk of a full repeal of the fiduciary rule, a Department of Labor (DOL) rule that would require financial planners, investment brokers, and other industry “advisors” to act in a fiduciary capacity.

 

A fiduciary is someone who is legally bound to act in their client’s best interests. Attorneys are bound by law to act in their clients’ best interests. This is one of the touchstones of the attorney-client relationship, and it is one of the key reasons why the legal profession self-regulates itself by harshly punishing those attorneys who violate this rule.

 

However, historically financial advisors had no such requirement. To date, there are continuing appeals and delays to the start of the rule. In fact, many suspect that the rule will never fully be enforced or implemented. Currently, brokers can sell products that make them a profit, even if totally adverse to their clients’ interests. Under the so-called fiduciary rule, advisors would be required to provide more transparency and notify their clients when they have a conflicting financial interest in selling products.

 

Since 2016, the rule has seen court battles and a litany of political discourse. Financial Times did a great job of explaining how the rule has certain pros and cons for consumers, but for now, the fact remains that many advisors are not required to act in their clients’ best interests.

 

Get Ethical and Personalized Estate Planning Advice Today

 

Throughout the Birmingham area, the lawyers of Five Points Law Group are available to consult with clients to help families get the competent, compassionate, and accurate estate planning advice they need in order to preserve their legacies for generations to come. Call to schedule an appointment today.

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Can I Get a No-Fault Divorce in Birmingham?

The term “no-fault” divorce is often overused and misused. For those who are considering getting divorced in Birmingham, AL, it is important to speak with an experienced divorce lawyer who can offer realistic and accurate advice on the options available. Remember, just because something is available does not always mean it is your best choice. Contact Five Points Law Group to get help with your divorce today.

Alabama Grounds for Divorce

Traditionally, one party to a marriage had to bring ‘allegations’ against the other party, claiming that they did something to violate the marriage in order to get a divorce. These were called “grounds” for dissolution of the marriage. Many feel these are antiquated concepts that no longer have a purpose in our society, yet most states still maintain some variation of grounds in their statutes.

In Alabama, the basic grounds for divorcing are:

• Adultery
• Incapacity of one spouse (mental or physical)
• Wife was pregnant at the time of marriage and did not tell the husband
• One person gets sentenced to jail for seven or more years. (grounds after two years in prison)
• Crimes against nature
• Alcohol or drug abuse
• Insanity (mental disability for more than five years)
• Domestic Abuse

Divorce Without Grounds

If none of the above grounds exist or you do not wish to bring public allegations against your spouse, you can also plead either of the following:

• Irretrievable breakdown
• Abandonment

In general, Alabama courts have a mandatory 30-day waiting period before any order can be granted. Assuming there is no dispute as to the allegations in the petition for dissolution of marriage, you might be able to get divorced in just a little over a month. Of course, in reality, there are generally a number of factors that keep that from happening. For instance, here are a few things that can delay getting your divorce granted:

• Your spouse needs time to consult with an attorney
• There are contested issues, like custody of children or property division
• You require time to resolve debts or sell assets in order to determine the marital estate
• You have difficulty finding or ‘serving’ your spouse with the petition

Making Divorce Simpler

Many people think hiring a lawyer will drag things out and make a divorce more complicated, but this is not true. In fact, people who have been struggling to handle their own divorce for months are often quite surprised at how efficiently and quickly a divorce can be handled once an experienced attorney gets involved. Sometimes simple misunderstandings of a court procedure or a failure to put things into the correct format for a judge can result in documents not being reviewed in a timely fashion or a judge not understanding what you are trying to communicate.

Attorneys who regularly deal with divorce cases can generally navigate the system better to get results. Whatever you do, never try to handle a highly contested divorce involving child custody without consulting an attorney. Even a small mistake could cost you dearly. For a help with all of your divorce and custody questions, call Five Points Law Group today.

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Five-Step Guide for Military Members Planning Divorce While Stationed Overseas

It is no secret that military service can be hard on marriage. For those serving in overseas duty stations or on deployment, this can be even worse due to long gaps between communication and the potential for infidelity and other obstacles to a successful marriage. It is sad to see a marriage end, especially when one spouse is thousands of miles away serving in the military. If you have made the decision to get divorced while still stationed abroad or while on a deployment, there are some things you should be doing right now to prepare for your divorce when you get home.

At Five Points Law Group, we are committed to serving those who serve our country. We know that our fighting men and women put their lives on the line every day, so when it is time for you to take the next step in your divorce, we are here to help make things as smooth and painless as possible. Nothing will make it easy, but the help of an experienced Birmingham divorce lawyer can often speed things up and help you avoid costly mistakes.

Step 1: Prepare Mentally

This is going to be tough. Build a support group, talk to a Chaplain or other trusted individual who can help you build up your emotional and psychological reserves for what lies ahead. You need to be focused 100% on your military objectives, so if you are unfocused or in emotional turmoil, you only put yourself and others at risk.

Step 2: Talk to a Lawyer Immediately

This may be tougher for some than others, but in today’s high-tech world, most service members have fairly frequent access to the Internet or telephone communications. Contact an experienced divorce lawyer near your home in the U.S. There are several reasons you want to do this early:

• Jurisdiction: You need to make sure you know exactly what jurisdiction applies. Do not assume that you can file for divorce in the state where you are stationed.
• Cost: By speaking to a lawyer early, you can begin to put together a plan for paying for your divorce. This may require you to budget your funds carefully while overseas.
• Information: An attorney can help you develop a plan for gathering the necessary paperwork and information you will need in order to file for divorce.

Step 3: Paperwork

Perhaps the single most difficult part of preparing a divorce while stationed overseas is that you do not have access to everything you need. For instance, you may be depending on your spouse back home to handle the budget, pay the bills, and make financial decisions while you are away. You may have limited access to banking information, investments, retirement plan documents, and other important items that will be necessary while filing for divorce. Now is the time to begin making a list of the important documents you will need, and maybe even have your attorney or a trusted friend back home gather these on your behalf.

Step 4: Privacy

Depending on your situation, it may be wise to get off of social media for a while. Or, at a minimum, enhance privacy settings. Also, make sure that you change any and all passwords on the following:

• E-mail addresses
• Social media accounts
• Online banking or retirement plan accounts
• Any other online accounts or logins that you want to be private

Never communicate with an attorney via e-mail unless you are 100% sure that your spouse cannot access that email account. Assume your spouse knows your login and change it immediately.

Step 5: File Your Petition

Once you have got everything in place, you can often use a power of attorney to handle much of the legwork back home. An experienced attorney can often help you file for divorce even while you are still stationed overseas. In some cases, such as when a trial may be necessary, you will have to wait in order to complete the divorce when you get back.

If your permanent duty station is located in Alabama or you and your spouse are from the Birmingham area, contact a local divorce lawyer from Five Points Law Group to discuss your options today.

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Three Common Sense Reasons You Should Consider a Trust

When people hear the term “trust fund,” they usually think of the super-wealthy, but trusts are not just for those with incredibly high-asset estates. Many middle-class to upper middle-class families would benefit from a trust. Anyone who is contemplating their estate plan in the near future should at least consider some of the ways that a trust might help your family. With this in mind, here are just three simple common sense reasons why you should consider creating a trust for your estate plan.

Reason #1: Tax Benefits

Alabama does not have an estate or inheritance tax, meaning that you and your heirs are not taxed by the state on the value of an estate. Likewise, the federal estate tax has been doubled as of 2018. Therefore, unless you have an estate valued at more than $11.2 million per person or $22.4 million per married couple, you should not face an estate tax. Although this eliminates some of the tax benefits of creating certain kinds of trusts, one should keep in mind that the new tax law has a sunset provision. These increased thresholds are only good until 2025. So, the limits could quite possible revert back to their prior limits of approximately $5.5 million per person and $11 million per couple. A trust can be established to protect assets, if this is a concern.

Reason #2: Life Insurance Trusts

Some states make you name individuals as beneficiaries for life insurance. Fortunately, Alabama allows you to also name a trust as a beneficiary. By doing this, you can protect future life insurance proceeds. For a young middle-class worker with a $1 million term life insurance policy, consider the benefits. If you are the sole earner for the family and you die, leaving a large amount of insurance money to your spouse and children, you have little control over how the money is used. If your spouse were to remarry and later die, all of the money intended to take care of children might go to the new spouse or that person’s children. When you die, you lose control over how money is used. A trust can help protect against that.

Reason #3: More Options

Simply put, Alabama trusts have more options than wills. Although they do require a little more planning and work to prepare, a trust gives you many options that a basic will cannot offer. For instance:

• Spendthrift provisions. Protect against wasteful heirs or those with drug or criminal issues.
• Incentives for heirs. Create financial incentives for heirs to be successful.
• Privacy. Keep your family’s affairs out of public court records.
• Probate avoidance. Avoid costly court administration.
• Much more

Get Help Planning Your Estate

In Birmingham and the surrounding areas, the attorneys of Five Points Law Group want to help you protect your estate from unnecessary taxes and ensure that you understand all of your options. Trusts are not just for the super wealthy anymore. Anyone who wants privacy and wishes to avoid probate should consider a trust. Likewise, if you want more control over your assets and wish to protect your legacy, then there is probably a trust that is right for you. Call or visit us online to schedule an appointment to review your options today.

 

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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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