Though estate planning frequently can be a difficult topic to broach, it remains vitally important that adults give the matter careful consideration because proper planning allows your loved ones to sidestep protracted, expensive legal hassles, and helps ensure that your final wishes are adhered to. Most states have enacted similar statutes, though Alabama law does differ in some details.
Compiling a Will
Your will is a compilation of written instructions that direct survivors as to how you want your assets distributed. If you have minor children, the document should address arrangements such as their care and guardianship. Couples sometimes write reciprocal wills that mirror one another. Your will must designate a personal representative who becomes legally responsible for ensuring that debts are paid and assets are distributed as you wish. Alabama law does not recognize unwitnessed handwritten wills because all final testaments in this state must be witnessed by two adults. It is not essential for you to consult an estate planning attorney to write a will, but having a lawyer thoroughly review the document can ensure it is worded properly and legally valid so it will accomplish your goals. For individuals who die without valid wills, state law determines how their property will be distributed.
Even if you do create a will, your estate will have to go through the probate process to ensure that your debts and taxes are settled and the assets are distributed. If any of your property is in your name alone, probate is unavoidable. You can cut down on the time and expense your loved ones are required to put forth by taking certain actions while you are alive, such as creating trusts, transferring property and establishing joint ownership. The probate process in Alabama requires a minimum of six months.
Power of Attorney
Granting a power of attorney to a trusted individual allows that person to take care of your affairs if you are unable to do so. How much power you permit is left to your discretion. The power of attorney document can be limited in scope, confining powers to handling routine financial matters, or far-reaching, allowing assets to be purchased or disposed of. Either way, make sure the individual you appoint is informed about the general philosophy you adhere to when conducting business.
Health Care Decisions
You also can create a medical power of attorney that instructs someone to make healthcare decisions if you are incapacitated. Advance directives are legal arrangements that allow decisions to be made about your health care if you are unable. Alabama recognizes two varieties of advance directives: A living will that outlines what type of medical measures you desire and under what circumstances, and a health-care proxy, which designates someone to make decisions for you if you are incapacitated.
Enumerate funeral wishes, such as cremation, burial, or donating your body for research in your will or letter of final instructions. Inform loved ones of your decision if you are a registered organ donor. Prepaid funeral arrangements sometimes are convenient for loved ones, but controversies can arise if the funeral home ceases its operations or if the payments do not account for inflation.
It will not be necessary to address the issue of federal estate taxes unless your assets are valued at more than $5.25 million. If you operate a small business, creating a succession plan ensures that operations will continue after your death. A life insurance policy can assist a surviving spouse by temporarily replacing lost income. You also can ensure that pets are cared for by writing specific provisions into your will.
This article is a general overview of estate planning. Federal and state laws change often. Contact an Alabama estate planning attorney for questions about your specific situation.