An Estate Plan has a lasting effect on you and your family and is extremely important. Planning ahead now, affects physical and financial care issues when you become incompetent and what your family may have after you die. Your plan may include any or all of the following:
Last Will and Testament ("Will"); Power of Attorney and Advance Directive for Health Care (“Living Will”); Revocable Living Trust (“RLT”): You must plan carefully and that requires you think about your situation, family, and desires. Do so now while you have the time to reflect.
Please make sure you also review any beneficiary designations on life insurance, retirement plans, annuities and IRAs to make sure they are correct and up to date. Look at them at least every two-three years. If you die with a spouse and child but forgot to change your beneficiary designations that named your parent or former partner – the fact that you married and have a child does not change the distribution of those assets. The asset will go to the person named – the parent or former partner – instead of those you would now name
Despite what you may see on the internet, there is no such thing as a one-size fits all estate plan and it is imperative that you have an attorney help you with drafting legal documents. If not done correctly, they may not be enforceable and since most issues aren't discovered until after death, its usually too late.
Below you will find general information on common estate planning tools. If you have any question or would like to discuss drafting a will, a Trust or any other estate planning tools, contact the Law Office of Neil C. Johnston, Jr., LLC, and I will be happy to help.
The Last Will and Testament
A Last Will and Testament (or "will") is a document which provides the manner in which a person's property shall be distributed when he or she dies. If a person dies without a will (called "intestate"), the laws of the state will determine how his or her assets are divided and to whom they go. - A lot of times this is very different from a person's wishes.
A Will also contains other specific directions from you concerning who is to implement your instructions (your personal representative) and, perhaps, who will care for any minor or disabled children (your guardian) you may leave behind. A Will is especially important for parents with young children. You should name a guardian (and preferably a successor) for your children in case the other parent also dies while a child is a minor (under age 19).
Having a will in place can alleviate some of the burdens of the probate process on the family members who will be administering your estate after you pass away. For example a will can exempt the personal representative from the requirement of obtaining a bond, which can be expensive. A will can also exempt the personal representative from having to file an inventory or accounting with the probate court. A will gives you the ability to control who gets what, oftentimes avoiding conflict among family members and allows you to decide who will serve the role of distributing your assets. Wills are just as important for small estates as they are for large estate.
Why should I have a will? If you die without a valid Will, Alabama law determines what happens to your assets. Your wishes will not be considered and therefore your assets may not go where you want them to go.
Who may make a will? In Alabama, the maker of a will must be: (1) At lease 18 years old, (2) of "sound mind," and (3) free from improper influences of other.
Trusts: Revocable Living Trust
A Revocable Living Trust (“RLT”):