How Does an Annuity Work, and is it Right for You?

If you have ever considered setting up a retirement account, then you have probably come across the term “annuity.” If you are over the age of 50, there is a good chance that a financial advisor or other commissioned sales rep has tried to sell you whole life insurance or an annuity. Do you really know how an annuity works or whether it is a safe bet for your retirement?

At Five Points Law Group, our estate planning attorneys not only help prepare wills and powers of attorney, but we can also advise you on how these plans may work in tandem with your financial plan. As attorneys, we are not on a commission. When you hire us, you are paying us to act as fiduciaries, meaning we are required to put your interests first and advise you on what is best for you, not what will be best for our bottom line.

Annuities are a Trade

Ultimately, an annuity is nothing more than a complicated trade agreement. You pay an investment company, and in return they agree to give you regular monthly payments that you can count on regardless of how the money performs in their investments. It removes the risk (to an extent) and gives the retiree a level of certainty. While this may sound like a good plan, when you do the math, many people decide that annuities are not really a good financial choice.

Drawbacks of Annuities 

In theory, an annuity sounds safe. However, there are four big drawbacks you need to consider before taking all of your retirement funds and moving them to one of these accounts.

• Insolvent Insurance Carrier: If the annuity company (insurance carrier) goes broke and dissolves, you will lose your principal. This is a big risk with some companies, so you need to make sure you are using a super credible and highly rated company. Of course, with those higher ratings come higher costs and fees.
• High Fees: Annuity companies often charge annual or even monthly fees to receive your payout. Therefore, you are taking your own money, giving it to someone else, then paying them to give it back to you in monthly payments. You can easily do this with a stable bond or mutual fund account. You can place it in a decent, well-performing fund and set it up to distribute dividends or just take regular distributions from your principal over time until the funds are depleted.
• Bad Investment: To have an annuity, you must give up your right to the principal. So, you actually give up control over your retirement funds. You are taking a gamble that you may live longer than your money, while the annuity company is counting on the money being worth more and lasting longer once pooled in investments.
• Ineligibility for Government Benefits: Annuities are a countable resource when determining eligibility for SSI, VA Benefits and Medicaid for long-term care.  Because the payments are often set up many years before an individual needs the assistance of government benefits, little thought is paid to how they can impact long-term care.  Contacting an Elder Law or Estate Planning Specialist is the prudent course when considering these products.

What Happens to Your Principal When You Die? 

You generally do not get to leave your annuity to others, although some allow a spouse to continue receiving money. Therefore, most estate planning professionals who are really interested in your family’s long-term wealth will advise you to invest well and draw dividends or principal. That way your money continues to earn interest. Plus, if you die sooner than anticipated, that principal remains in your control for your children, spouse, or other loved ones. Call Five Points Law Group to get skilled advice with your estate plan.

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Coronavirus and Estate Planning

During the COVID-19 pandemic, it may feel like there are few aspects of your life that you can control, beyond hand washing and social distancing. However, estate planning – which is more vital now than ever – can help you reclaim some control during these uncertain times.

Estate planning with 5 Points Probate involves the creation of three essential documents:

• Power of attorney
• Advanced directive for healthcare
• Will

These documents are crucial if you should fall ill, and they can help ease the burden on your family during the worst-case scenario. This guide will explain why you need estate planning in light of the coronavirus, the benefits of setting up these documents, and how an attorney can help.

 

Estate Planning and COVID-19: What You Need to Know

Estate planning begins with a power of attorney and an advanced directive for healthcare. Together, these documents will serve a crucial role in the event you fall seriously ill. In the worst-case scenarios, a will can outline how your assets are to be distributed after you pass.

Let’s take a look at these documents in more detail:

 

What Is a Power of Attorney?

A power of attorney gives family and/or trusted acquaintances the legal right to make key financial decisions on your behalf. For example, let’s say you’re the head of your household, and your health has taken a turn for the worse. If you’re hospitalized or even put on a ventilator, your physical ability to access your finances and, perhaps, your mental capacity during this time may be severely affected. Meanwhile, the mortgage is still due, your business needs to be managed, and bills must be paid.

While you’re temporarily unavailable and/or incapacitated, who will take care of your business, pay your bills, or handle other financial obligations? With a power of attorney, you can choose a responsible person you trust to handle these affairs on your behalf.

A power of attorney can grant your family member or trusted friend access to your bank accounts to pay bills, manage the day-to-day affairs of your business, and act on your behalf in nearly any fiduciary capacity. This grant of authority is why it’s important to choose someone who you fully trust to make the best decisions on your behalf.

When choosing someone to serve as your power of attorney, they should be:

• Someone with good attention to detail and capable of comprehending legal documents and contracts.
• A person who is financially responsible and has a good understanding of business and finances.
• Someone who is cooperative and willing to listen to the advice of attorneys or accountants, if needed.

 

What Is an Advanced Directive for Healthcare? 

An advanced directive for healthcare is essentially a guide for first responders, healthcare workers and your loved ones regarding the kind of care you want to receive if you cannot make these decisions yourself. It is sometimes referred to as a “Living Will.”

An advanced directive for healthcare can also prevent your loved ones from having to make difficult decisions. For example, if you state that you do not want to receive life sustaining treatment, this personal choice can prevent situations that would otherwise cause undue stress for your family.

During the ongoing COVID-19 pandemic, this document is more important than ever, especially for non-married couples. For instance, let’s say you have told your specific preferences for medical care to your significant other. If you are not legally married, your significant other will not be able to make medical decisions on your behalf. But with an advanced directive for healthcare, you can set out your wishes for medical care to act as a guide for healthcare workers, and specifically appoint your partner as healthcare proxy so that they legally have a say.

An advance healthcare directive may cover the following:

• Whether you’d like to be put on life-support treatment, if needed. And if so, what kind and to what extent.
• Your preference for certain medical treatments, such as ventilators and other devices to aid breathing, use of feeding tubes, dialysis, blood transfusions, surgery, antibiotics, and more.
• Decisions regarding whether you will receive palliative care.
• Whether you want a Do Not Resuscitate (DNR) order.
• If you want any resuscitation efforts to be made in the event you stop breathing or your heart stops.
• Whether you’d like to be an organ donor.

In addition to outlining your wishes for medical care, an advanced directive for healthcare also allows you to name a healthcare proxy to speak for you, if you are unable to communicate your preferences.

 

What Is a Will? Why Do I Need One?

A power of attorney and an advance healthcare directive can help you get the medical care you want, and ensure your financial affairs are in order if you’re incapacitated.

But what if the unthinkable occurs? While it’s difficult to think about, many people find that creating a will actually helps them feel more in control during these difficult times. In the event you pass, a will fully outlines how your assets are to be distributed.

You can also appoint an executor of your will. An executor is the person who oversees the distribution of your assets and any related matters in probate court.

A will can decide:

• Who will be appointed as a guardian to care for your minor children or adult children with special needs. Without a will, the court will decide who will act as guardian.
• The allocation of assets in trusts for minor children, adult children, other loved ones, or even cherished pets.
• How your cash will be distributed, which includes liquid cash, money market accounts, checking accounts, savings accounts, and more.
• How intangible property will be distributed, such as intellectual property, royalties, stocks, bonds, and business ownership.
• The distribution of real estate and valuable objects, such as artwork and jewelry.

An attorney will help facilitate the process of creating your will, and you’ll have the peace of mind of knowing that a plan is in place.

 

Do You Need an Attorney to Help with Estate Planning During COVID-19?

It’s not mandatory to hire an attorney for estate planning. However, without legal experience, there are many parts of the estate planning process that you might miss. Proper estate planning with a seasoned local attorney can save your family a significant amount of money and time.

When you choose 5 Points Probate to handle your estate planning, you can expect:

• Thorough Legal Services: It’s important to understand that proper estate planning encompasses more than just filling out forms. You may need help with titling vehicles and other assets, and naming beneficiaries. Our attorneys are Alabama natives licensed to practice law in or great state.  They will ensure all loose ends are tied up, so you and your family don’t have to worry.
• Expertise in Probate Law and Estate Planning: Our law firm has a dedicated Birmingham based legal team that handles estate planning and Alabama probate law. We have in-depth knowledge in these areas, and can navigate complicated probate matters, contested wills, and more. Whether you need help with your initial estate planning or your circumstances have changed since your last estate plan was made, we can help during every step of the process.
• Superior Customer Service: From our support staff to our legal team, you can expect caring, local service customized to your needs. We will always take the time to listen to your concerns, and we will fully explain the estate planning process so you can make the best decisions for your future.
• A Worry-Free Experience: We understand that estate planning can be a stressful process, and we value your time. This is why we’ve updated the process using technology to eliminate your worry and stress. We can use video conferencing and online collaboration if you prefer, so you can sign documents from the comfort of your own home.

 

Get Started With Estate Planning Today

The COVID-19 pandemic has left many of us feeling uncertain about the future. During these uncertain times, estate planning is one of the best ways to reclaim control and protect you and your family.

Estate planning can let healthcare workers know what kind of care you want in the event you are incapacitated. It can also ensure your financial affairs are properly managed, and that your assets are allocated according to your wishes, if needed.

Get started by scheduling a confidential consultation with one of our local attorneys at 5 Points Probate. Contact us today at (205) 235-9658.

We look forward to meeting you in our offices conveniently located in 5 Points South in Birmingham or on the internet.  Stay safe and be well!

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Divorcing for Mental Health Reasons

According to the American Psychological Association (APA), between 40 and 50% of all American marriages end in divorce. This is despite increased awareness of the challenges of divorce, as well as numerous resources available to help couples deal with the mounting pressures of modern life. While financial distress remains one of the leading causes of marital discord, mental health is also becoming a large factor in many divorces.

At Five Points Law Group, we take a compassionate approach to helping couples deal with the breakdown of a marriage. If a partner’s mental health concerns are creating stress in the marriage or have led to a situation in which divorce is the only option, contact us today to schedule a private consultation with an attorney who can provide skillful and empathetic advice and recommendations.

 

How Mental Health Affects a Marriage

Mental health is a much wider issue than many people wish to admit. In fact, the National Institutes of Health (NIH) estimate that approximately 44.7 million Americans (about one in five people) are living with some form of mental health issue. This can range from minor transient depression or post-traumatic stress disorder (PTSD) to serious personality disorders, such as bipolar disorder or affect disorders. Regardless of the specific condition, the challenges that people face can spill over into their relationships and marriages.

The spouse of an individual dealing with serious mental health disorders may end up feeling alone and burdened, as though the relation has morphed from a loving spousal relationship into more of a clinical relationship, where the spouse is constantly trying to “fix” or “counsel” the affected partner. In some situations, behaviors can create fear, panic, or even resentment. These feelings can stir and build for years – even decades – before a person finally decides that they cannot continue to tolerate the situation.

 

Does Leaving Mean You do Not Care?

Not at all. Many spouses who choose to divorce over mental health issues are very loving, and in fact they may care deeply for their spouse. However, there may be a host of reasons why divorce makes sense. Consider these brief scenarios in which despite a loving relationship, a person may decide it is better to divorce:

• Children are being negatively affected
• Family finances are being negatively affected
• The person with a mental health condition needs help that the spouse can not provide
• Institutional care is needed
• The mental health disorder is creating a danger to others
• Behaviors are leading to high-risk conduct, like promiscuity or drug and alcohol dependence

Getting Help Early

Often with the help of a compassionate divorce attorney, you can communicate with the affected spouse and help them see the benefits of divorce. Often, when children are involved, it may make sense to give space and distance to allow the person who is facing mental health challenges time to get the help needed. It also may be necessary to give children a break from the frequent challenges and events that so often accompany mental health disorders.

 

If you are dealing with a partner with mental health challenges in Birmingham, call Five Points Law Group today, and speak with a skilled family law attorney who can review your situation and look for efficient yet practical approaches to helping you resolve your divorce.

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Can My Employer Fire Me for Getting Sick?

This is probably one of the top three most commonly asked questions at employment and labor law offices. The concern is that a person may become ill or have an injury that takes him or her away from work. Maybe you broke your leg at home or came down with the flu three times in one year. It is bad luck, for sure, but most people do not consider these things reasonable grounds for terminating employment. After all, you really cannot help getting sick, and you certainly do not want others contracting your illness. So, what does the law say about this age-old question?

At Five Points Law Group, our labor law attorneys frequently help clients who have been discriminated against or unlawfully terminated. Give us a call if you need help.

 

How Big is Your Employer?

If your employer has fewer than 50 employees within a 75-mile radius, then you have no protections under FMLA (Family Medical Leave Act). For those with larger employers, FMLA allows them the ability and the right to take off up to 12 weeks of unpaid leave for medical conditions that prevent them from working. Here is how FMLA works:

• You must have been continuously employed by your employer for at least 12 months
• Your employer can require you to use all paid time off (including vacation and sick time) before using unpaid FMLA time OR require to use all paid time off concurrently with your FMLA leave
• You can take time for your own medical conditions or to care for a child, spouse, or other family member who needs your care
• The condition is considered “serious,” as defined by FMLA
• Special rules apply for service members

Sadly, new employees are rarely allowed to take FMLA leave because of the 12-month rule. However, if you are in-demand and your employer would have trouble replacing you, it may be worth negotiating this issue a bit to see if they will be flexible.

 

Do You Suffer from a Recognized Disability?

If you suffer from a diagnosed medical condition that is considered a disability, you may qualify for limited protections under the federal ADA law (Americans with Disabilities Act). Again, however, this only applies to employers with more than 15 employees. Yes, it covers a wider range of employees, but there are a lot of small businesses in Alabama that simply are not required to comply.

If you are covered, your employer must make “reasonable accommodations” for you to be absent in order to seek disability-related medical care. The ADA requires that the employee start the conversation about a request for a reasonable accommodation, which may include questions related to the following:

• Appointments to get prosthetic devices fitted
• Rehabilitation or speech, occupational, or physical therapy appointments
• Medical appointments
• Surgical or outpatient procedures
• Hospitalizations
• Occasional and reasonably anticipated recovery times (chemotherapy, time after a surgery, etc.)

There are complex rules that govern when a condition stops being covered by the ADA and when a procedure or hospitalization may require FMLA protections.

If you suspect that your employer is covered by these laws and is intentionally denying you the right to seek medical care, exercise your rights under federal law, or is refusing to make reasonable accommodations for a disability, call Five Points law Group today.

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Your Obligations as a Personal Representative of a Probate Estate

If you recently discovered that a loved one named you his or her personal representative, you may be dealing with some conflicting emotions. On one hand, it is an honor to know that a parent, spouse, or other close relative trusted you enough to name you as their executor under a will. However, at the same time, you may be feeling a little overwhelmed and worried about what it actually means.

At Five Points Law Group, we work closely with personal representatives, administrators, executors, trustees, and other fiduciaries to make sure that fiduciary obligations are met and estates are properly administered from start to finish. Here are a few quick tips you need to keep in mind about your obligations as a representative for an estate.

 

Action is Voluntary

 

The first thing to remember is that you are in no way forced to act. Just because someone named you as their representative or executor does not mean you have to do the job. You always have the right to decline the job. But beware: If you decline, the next individual named in the will is going to be in a position to make important and critical decisions on behalf of the estate. If you do not like how that person handles things, you might not have the option of changing your mind later.

Fiduciary Obligations

 

Once you do accept the job and decide to act, you are bound by a set of fiduciary obligations. In other words, you must treat the estate’s property as separate and apart from your own. You can not appropriate or use the estate’s property for your own purposes. Examples of inappropriate breaches of fiduciary duties include:

• Commingling your money with the decedent’s money
• Using the decedent’s cars, boats, or other vehicles for your own purposes
• Moving into the decedent’s house without paying a reasonable rent

Accounting

 

Next, under Title 43 of the Alabama Code, you may be required to provide a regular accounting of the estate’s assets and liabilities. This means letting other relatives and heirs know exactly what is available, what debts may apply, and how the funds are being distributed. The more complex the estate, the more difficult this can be.

Opening the Estate and Administering it Properly

You do not want to get into legal trouble for accidentally misappropriating estate funds. If the estate has enough value to require probate, you will need to file the original will with the local court and petition to open an estate. This will give you the legal authority to:

• Collect assets
• Deal with creditors
• Resolve and pay debts and claims
• Defend the estate against lawsuits
• Prosecute lawsuits on behalf of the estate
• Distribute remaining funds to heirs and legatees based on the decedent’s wishes
• File final tax returns
• Sell or auction property
• Transfer real estate ownership
• Close the estate

How a Birmingham Probate Lawyer can Help

 

As you can probably imagine, there are a lot of ways a probate matter can get complicated quickly. In many cases, the surviving heirs all agree and get along. If so, it will go a long way to easing the process. But in other cases, family members fight bitterly over assets and heirlooms.

If you need help administering an estate in the Birmingham area, give Five Points Law Group a call today.

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Does My Employer Have to Give Me Paid Breaks?

Technically no, your employer does not have to give you paid breaks, at least not in Alabama; but there is more to it than that. Like all issues of fair labor, you have to first start by looking at federal law. If there is a federal requirement, then the states must either follow it or create stricter and more protective rules. States are not allowed to have requirements that provide fewer protections than the minimum standards set forth by the federal government. Breaks are one of these areas in which the federal rule is applied in Alabama, because the state does not have a more protective law in place.

If you suspect your employer is stealing your hard-earned money through unfair wage violations, call Five Points law Group today.

Federal Rules for Breaks and Meals

Under federal labor laws, your employer in Alabama is required to pay you:

• For all work performed
• No less than the minimum wage set by the federal government
• Overtime compensation for hours worked in excess of forty in a work week.

Under the federal rule, employers are actually not required to give you rest time for breaks and meals; however, “rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. …. They must be counted as hours worked.”

Lunch breaks, however, can be unpaid if they last longer than 30 minutes.  Employers often deduct thirty minutes from an employee’s clock-in and clock-out time worked for a meal period.  However, the employer must ensure that “the employee must be completely relieved from duty for the purposes of eating regular meals. Ordinarily 30 minutes or more is long enough for a bona fide meal period. A shorter period may be long enough under special conditions. The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating.”  If your employer is deducting time from your recorded work hours, but you are working through your meal period or not completely relieved from your job duties during a meal period, call Allen D. Arnold of the Five Points Law Group, as your employer may be denying you overtime compensation.

Nursing Mothers

In 2010, with the passage of the Affordable Care Act, federal law was amended to require employers to provide reasonable breaks so that mothers could pump breast milk for a nursing child. This requires employers to allow this for up to one year after birth of the child. The law also requires:

• A private place other than a restroom
• The location for expressing milk should be private and not visible to other employees or the public

When Things Go Wrong

Even though Alabama has some of the least restrictive wage and employment laws in the country, some employers still feel the need to violate their employees’ basic rights under federal guidelines. While meals and break time may not seem like a big deal, they can become a big deal quickly. Consider what happens when an employer makes you count your break time as off-the-clock. You may be working an extra 30 – 60 minutes every day beyond your standard eight-hour shift. If, based on your unique circumstances, this causes you to work an hour of overtime each day, then at the end of a standard work year (261 business days), you could be owed as much as 261 hours of overtime pay, which for many people must be paid at time and a half — and this is just a conservative estimate.

If you feel your rights are being violated at work, give Five Points Law Group a call, and speak with our employment attorneys today.

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When a Caregiver Gets Too Close

If you live in Alabama and you have an aging parent or other relative, you likely are already aware of the many ways people attempt to exploit or abuse seniors every day. One of the more common scenarios is when a caregiver or home health worker gets very close to the senior and quickly begins assuming roles that are normally reserved for family. For instance, after a few months of providing in-home care, an elderly person may decide to change powers of attorney or other estate planning documents to include this new trusted friend. While this may be nothing more than a kind gesture, in most cases there is something more insidious going on.

At Five Points Law Group, our attorneys have decades of experience protecting seniors and their families from exploitation and abuse. If you suspect a caregiver is trying to gain access to your loved one’s money or other assets, call us right away.

Basic Legal Protections

First, we begin with the assumption that a senior has appropriate planning documents in place, namely a Last Will and Testament and durable powers of attorney for health and finances. If these are not already in place, a senior is at risk. Not having these legal protections means that if the senior becomes cognitively impaired (i.e. stroke, dementia, etc.), a court process known as guardianship or conservatorship would be necessary just to handle the person’s affairs.

If the elderly individual is still mentally capable of executing these documents, he or she should schedule an appointment to meet with an experienced attorney right away. If not, there is still hope.

Changes to Estate Plans and Powers of Attorney

Under Alabama Law (Section 26-1A-301 of the Alabama Code), a statutory power of attorney form can be crafted to allow a loved one to make decisions regarding things like:

• Real estate transfers
• Tax documents
• Bank accounts
• Investments
• Insurance policies
• Retirement accounts
• Just about any other financial asset

While this can be a powerful instrument to help family members manage the finances of an aging senior who may be losing the mental ability to do so on his or her own, it can also be a dangerous weapon for unscrupulous caregivers looking to steal from a senior.

Restrictions on Healthcare Providers Being Named as Agents Under Powers of Attorney

If your aging parent or other loved one is considering granting these types of powers to a stranger or healthcare provider, you should be aware that public policy generally prohibits healthcare providers from being named as agents under powers of attorney. The reason stems from the obvious potential for a conflict of interest. Anyone who is performing a service for money should likely not be the agent in control of paying that money.

How a Lawyer from Five Points Law Group Can Help

If you have recently discovered that a healthcare worker is getting “too close” to your aging relative and you suspect they may be trying to gain access to assets and finances, you should talk to an attorney. Find out if your loved one has the necessary documents in place and learn whether the relative is capable of revoking them. You may need to get a court-supervised process, like guardianship or conservatorship, established to protect your loved one. Whatever the best course of action, we may be able to help. So give our firm a call today to learn more.

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