WILLS

​            Most people know that a Will is something they need and should have yet so many times people never get around to making one. They put it off or try to avoid the inevitable and then one day it’s too late. When that day comes in Alabama all of your wishes for your family and friends are left up to the Court and they make the decisions you could have made. Creating a Will does not have to be a difficult task and in the long run will save your family time and money. Let’s face it, nobody wants to think about a will and all that comes along with it but it may be one of the most important things you can ever do for your family.

 

We are experienced in drafting all types of wills to ensure that your last wishes are heard by not only your family but also the Courts. A will accomplishes several things, among those are:

 

• Naming guardians for your children- A will is a great tool to designate someone to act on your behalf with regards to raising your children in the event something should happen to you. If you do not do this the State of Alabama will nominate someone on your behalf and that may not be the best choice for your children. It is your job to protect your kids, make sure you do the right thing by having the the Birmingham Probate Attorneys draft a will for you.

 

• Designating who gets what- A lot happens once a family member passes away, one of those things is family fighting about who gets what in the estate. This does not have to be a problem with a well drafted will. Once you designate who the Beneficiaries are in your will that will relieve a lot of the stress that comes along with probating a will or following the wishes of the decedent.

 

• Your final wishes- What happens after you pass and there are no clear instructions on what should be done? Your family members begin arguing over what they feel is the best thing to do for you in your honor. This may mean quickly trying to make funeral arrangements or deciding on cremation. All of these final request should be spelled out in a will or letter of instruction. Again, this saves your family time, money and the hassle of trying to figure all this out at a time they should be grieving and not arguing over what you would have wanted.

 

• Establishing trust- A great estate planning tool is creating a trust. A trust is a way to avoid the probate process and leave money, property, valuables or anything else to a loved one. A will is a great method in which to establish a trust. Maybe you want to set up a college fund for the kids or ensure they are taken care of later in their life. You can accomplish all of this through a well drafted will that includes a trust provision.

 

For assets that do not allow for the naming of beneficiaries (such as some bank accounts and real estate), the will is the place to designate who will get them, as well as any related special instructions.

Some types of assets allow for the naming of beneficiaries (such as IRAs and investment accounts), which enables a direct transfer of the asset without involving the will and has greater authority than the will. These types of assets usually avoid probate and the associated fees and may avoid certain taxes, helping you maximize what you leave to your beneficiaries.

Assets that pass through the will must undergo the probate process.

 

What Is a Letter of Testamentary?

A Letter of Testamentary is a certificate specifying the name of the individual who has been authorized by the court to deal with the assets of an estate, which includes bank accounts. In order to obtain a Letter, you must apply to the court to open a probate proceeding (if there was a Will) or to open an administration proceeding (if the deceased died without a Will, also called Intestate).

Before a Letter of Testamentary can be issued, the court must hear evidence to determine:

• That the decedent is actually dead
• Whether the decedent had a Will
• If there is no Will, the identity of the legal heirs of the decedent
• That the applicant is qualified to obtain the Letter (they have never found guilty of a felony crime, been found mentally incompetent or convicted of the misdemeanor crime of theft)

 

 

 

 

 

 

 

TRUSTS

 

What is a trust? Basically A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.

Since trusts usually avoid probate, your beneficiaries may gain access to these assets more quickly than they might to assets that are transferred using a will. Additionally, if it is an irrevocable trust, it may not be considered part of the taxable estate, so fewer taxes may be due upon your death.

 

Often cited as a key reason for establishing a trust, avoiding probate can mean substantial savings in time, legal fees and paperwork. If your assets and property are to be distributed according to your will, probate is the process by which a judge determines the will’s validity. A trust allows your descendants to bypass this process and gain access to the assets and property more quickly. Plus, your family can avoid probate fees, which can be as much as 5 percent of the value your estate. The probate process is also a long one, and can take up to a year or even two to finalize, during which time your family can’t touch their inheritance. In some states, however, the courts allow beneficiaries a certain amount of money for living expenses while they wait for their inheritance to become available.

 

Another common reason trusts are established is to pay for education. Whether the grantor is paying for one child or several, a college trust fund offers flexibility in how and when money is disbursed for educational expenses. Typically, an education trust will specify that each child’s full tuition and college expenses be paid, after which any remaining assets in the trust can be split evenly among all of the children. In some cases, the children will have different financial needs — for example, if one child attends medical school, while another simply earns a bachelor’s degree. The person setting up the trust may decide to give each child the same amount, regardless of the cost of their education, or provide varying amounts depending on each child’s educational costs

Assets in a trust may also be able to pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well. Other benefits of a trust may include:

 

• ​Control of your wealth- You can specify the terms of a trust precisely, controlling when and to whom distributions may be made. You may also, for example, set up a revocable trust so that the trust assets remain accessible to you during your lifetime while designating to whom the remaining assets will pass thereafter, even when there are complex situations such as children from more than one marriage.

 

• ​Protection of your legacy- A properly constructed trust can help protect your estate from your heirs’ creditors or from beneficiaries who may not be adept at money management.

 

• ​Privacy and probate savings- Probate is a matter of public record; a trust may allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.

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Revocable vs. irrevocable

There are many types of trusts; a major distinction between them is whether they are revocable or irrevocable.

Revocable trust: Also known as a living trust, a revocable trust can help assets pass outside of probate, yet allows you to retain control of the assets during your (the grantor’s) lifetime. It is flexible and can be dissolved at any time, should your circumstances or intentions change. A revocable trust typically becomes irrevocable upon the death of the grantor.

You can name yourself trustee (or co-trustee) and retain ownership and control over the trust, its terms and assets during your lifetime, but make provisions for a successor trustee to manage them in the event of your incapacity or death.

Although a revocable trust may help avoid probate, it is usually still subject to estate taxes. It also means that during your lifetime, it is treated like any other asset you own.

Irrevocable trust: An irrevocable trust typically transfers your assets out of your (the grantor’s) estate and potentially out of the reach of estate taxes and probate, but cannot be altered by the grantor after it has been executed. Therefore, once you establish the trust, you will lose control over the assets and you cannot change any terms or decide to dissolve the trust.

An irrevocable trust is generally preferred over a revocable trust if your primary aim is to reduce the amount subject to estate taxes by effectively removing the trust assets from your estate. Also, since the assets have been transferred to the trust, you are relieved of the tax liability on the income generated by the trust assets (although distributions will typically have income tax consequences). It may also be protected in the event of a legal judgment against you.