September is National Alcohol & Drug Addiction Recovery Month. When you have a family member struggling with addiction, many things can seem more difficult. For instance, have you considered that, for those trying to support a family member struggling with addiction, estate planning can be particularly stressful? Let us discuss how to employ tools, such as trusts, to help plan for beneficiaries struggling with addictions.

When considering your plan for beneficiaries with addictions, there may be several things you should or should not do. For instance, you should think about how to avoid leaving an outright gift. An outright gift can be problematic because the assets could be used to acquire drugs or alcohol, or they could be garnished by creditors as repayment for prior poor financial decisions. This does not, however, mean you need to disinherit the struggling family member either. Beyond the emotional trauma to parents of excluding a child, disinheriting a family member can open the estate up to costly litigation.

Instead, consider using a spendthrift trust, which allows you to place spending authority with a trustee, or a trusted person, rather than the beneficiary. You can specify what kinds of expenses are authorized under the trust, so you can help ensure that the inheritance may only be spent on necessary things, like education, food, and shelter. Spendthrift trusts can protect the inheritance from creditors. If the beneficiary has to declare bankruptcy, the funds in the trust may be beyond the reach of creditors. Once funds are removed, however, they can be garnished by creditors.

Additionally, you may want to consider using incentive or conditional trusts, either combined with a spendthrift trust or as a stand-alone trust. Incentive trusts only make assets available to the beneficiary after he or she has completed certain requirements. For example, requirements could include completion of a certified treatment program, or remaining clean and sober for a year. You can also set up continuous milestones to help them maintain sobriety.

Using a professional fiduciary as the trustee may also be a good thing to consider. Placing authority for spending on a sibling or family member can strain the relationship between that person and the beneficiary who is battling addiction. It can be a big job for a family member serving as trustee.

If you are concerned about leaving an inheritance for a loved one who is experiencing a substance use disorder, contact us today.

Have you heard that World Alzheimer’s Day is September 21? It is an international campaign to raise Alzheimer’s and dementia awareness and challenge stigmas associated with these conditions. Every 3 seconds, someone in the world develops dementia. Dementia is a collective name for progressive degenerative brain syndromes which affect memory, thinking, behavior, and emotion. Alzheimer’s disease and vascular dementia are the most common types of dementia, responsible for up to 90% of cases.

For someone with dementia, it can be important to act quickly to set up a legal plan. The sooner plans are put in place, the more likely that the person living with dementia will be able to significantly participate in the process.

Fundamentally, a person with dementia should have at least these four legal tools in place. First, a health care surrogate should be established. A healthcare surrogate can give a trusted friend or family member the power to make healthcare decisions on the person’s behalf in the event he or she becomes incapacitated and unable to communicate such decisions. Speaking of important health care documents, the second legal tool a person with dementia should consider putting in place may be a living will. A living will can outline the person’s wishes regarding end of life care should he or she be incapacitated in a terminal, end of life situation.

Third, a durable power of attorney for finances may be established to allow a trusted individual to take over financial decisions and control bank accounts. This trusted individual, referred to as the “agent” of the durable power of attorney, has the legal ability to conduct business on behalf of the “principal,” the person who established the durable power of attorney. The durability feature means that the power of attorney survives incapacitation of the principal.

Fourth, a mechanism for distributing assets should be established. This may be a will, it may be a trust, or it may be a combination of the two. Whatever is put in place should address who will receive which assets upon passing. 

If you or a loved one has been diagnosed with dementia, we can help you. Make an appointment today. 

Planning for incapacity may not always be on the forefront of our minds.  Have you thought about what will happen should you unexpectedly become incapable of managing your own affairs?  It can be important to confront this question and look at what tools you can put in place to protect yourself in the future. A strong durable power of attorney can be one such tool. Let us discuss three reasons to have a strong durable power of attorney in place.

1. Accidents happen. Although it would be nice to be able to predict the future, something unexpected can occur that could put you in a position where you are unable to manage your affairs.  Maybe a car accident puts you into a coma.  Maybe you have a stroke.  Maybe you begin to suffer from dementia.  Whatever the circumstances, it can be important to help ensure that your affairs are managed as you would want them to be, even when you are unable to handle them yourself.  A durable power of attorney does just that.  “Durable” means that it can remain effective even in the event of your incapacity. Without the durability feature, a traditional power of attorney will not be valid once you are incapacitated.  Working with your lawyer, you can craft the document to give the agent as much or as little authority over your affairs as you decide.  You will likely want to pick someone you trust as your agent, as the agent will be your “fiduciary” and act only in your best interest.  

2. You may not want a court or social worker making decisions about your affairs. Without a durable power of attorney, your family may need to go through the expense and headache of having you declared incompetent and ask the court to appoint someone to act as your agent while you are incapacitated.  While the court process is pending, a temporary guardian, perhaps a stranger, may be appointed as your agent.

3. You may want to take things easy on your family. Spelling out your wishes in a legal document can make the already unfortunate circumstance of your incapacity easier to manage.  Rather than worry about how you would have wanted your affairs handled, your family can now be informed of your wishes.  Remember, you can always change the agent designated and the powers given. 

For more information on the importance of a durable power of attorney and related issues, please feel free to contact our office to schedule an appointment.

A strong durable power of attorney (DPOA) can be a powerful tool in managing financial decisions for those who are unable to do so for themselves. Did you know that “durability” means the authorization remains in effect after the principal is incapacitated? Let us discuss how a strong durable power of attorney can help you and your family. 

• Maintain control of your finances even when you cannot manage them. A strong DPOA appoints someone to manage your financial affairs when you become incapacitated.  

• This estate planning tool can make the transition of decision-making less disruptive.  Should you be unable to administer your own financial matters, such authorization assists in your continued ability to control them by your appointed agent.  He or she should continue carrying out your wishes in day-to-day banking, real estate transactions, and paying bills, among other financial matters.  When you face a sudden event rendering you unavailable, having a DPOA helps keep your finances on track.  

• Ensure decisions are made according to your preference.  A strong DPOA can help ensure that someone you trust and understands your preferences can make the right choices on your behalf.  A DPOA gives the agent, or “attorney-in-fact,” such an extended authority, so you should choose someone you trust.  You also should find an agent who may be knowledgeable to handle the matters enumerated in the DPOA, whether the DPOA is limited in scope or covers every aspect of your finances and legal matters.  

• Your agent should know your personal preferences to make the desirable decisions.  Close family members or trusted friends may be good candidates because they may be familiar with your personal preferences and needs. 

• Protect your family from outside decisionmakers. Lastly, a strong DPOA can help keep your financial decisions that impact your loved ones from being made by a stranger.  You likely want to avoid exposing your spouse and children to a decision that may not be what you want no matter how appropriate it may be.  

For more information on how a durable power of attorney can protect you and your family, please reach out to our office. We will be happy to schedule an appointment for you to come in and discuss this matter further.

July is finally here and summer is in full swing. For many, summer means that children are out of school, spending more time at home or engaging in extracurricular activities. While a fun and relaxing summer is important for minor children, unfortunately, minor children can be particularly vulnerable during this time of year. 

Accidents can happen at any time, and being prepared is one of the most effective ways to protect your children. To help keep your minor children safe and protected this summer, let us share with you a few key safety considerations. 

1. Understand the risks.

If your minor child is attending summer camp this year, it is important to be familiar with the types of activities he or she will be participating in. The summer heat can affect us all, especially young children. Be sure to provide your child with adequate sun protection, such as sunscreen, a cover-up, and a cap if he or she will be spending any time outdoors. Further, it is essential that your child stays hydrated to avoid suffering from dehydration. Purchasing a reusable water bottle and reminding him or her to regularly drink water and stay in the shade when possible are just a couple ways to help avoid this.

2. Be vocal.

You know your child better than anyone else. If your child has certain limitations, it is imperative that you share those with camp counselors or other staff. If your child is participating in water-related activities and is not a strong swimmer, for example, be sure to notify those supervising your child ahead of time. Additionally, make sure that he or she has the appropriate attire and gear to help them, such as floaties. 

3. Plan ahead.

You are your child’s best advocate. We encourage you to speak up if you are uncomfortable with a safety practice, or lack thereof, at your child’s camp. It is essential that you trust those who are supervising and caring for your minor children. Do not hesitate to ask the staff about their qualifications, including any safety measures that the camp implements. This will provide you with some peace of mind and will help ensure your child has a fun and safe summer filled with activities.

Selling a business requires careful planning. You may feel as if you have countless responsibilities which do not only include ensuring the sale takes place but also to get the best possible price for your business. Knowing why you are selling, when to sell, and for how much is critical.

Did you know, however, that there are additional things to consider? For example, planning sales and marketing push once you have developed an exit strategy could make your company much more attractive to buyers. You also want to know your market, your competition, and other location demographic information before you get started with the process.

Never hesitate to meet with your business law attorney to ask your questions first! He or she will be able to share valuable insight to help you navigate the sale of your business. In our blog today, we want to get you started by sharing five basic sale tips that we tell our friends, family, clients, and business partners.

1. Why. Know exactly why you want to sell. Get to the heart of your goals and be clear. Overworked? Time for a change? Retirement? This is usually the first question a prospective buyer will ask, and other selling decisions often usually stem from your “why.”

2. Valuation. How much is your business worth? It is not always what the seller thinks, but what the market will pay. Consider obtaining a third-party evaluation to ground your asking price. That does not mean you have to go with that price or that you have to disclose your research during a negotiation. An independent evaluation can help avoid asking too much or too little and even identify areas to improve upon.

3. Timing. Selling a business at the right time can make all the difference. While macroeconomic factors are largely out of one’s control, there are many things that can be built into an exit plan to seize the moment when an ideal time presents itself. Cleaning up financial statements, eliminating potential red flags, and transparently accounting for all income and liabilities are just a few suggestions.

4. Expertise. A broker can lend his or her expertise for a price. Whether you are selling on your own, or through a representative, do not wait to consider an impartial representative and discuss this option with your business law attorney.

5. Buyers. When fielding offers, find out whether a potential buyer is serious before giving out any information about your business. Do they have the means to buy? Develop a short list of top pre-qualified prospects, allow for some wiggle room, and stand firm on your asking price while building in your company’s future value.

Selling a business is a big “next step” for any of us. We know just how complicated this can be for you and your loved ones. Do not wait to contact us to ask us your questions on this or any other business related matters. We are your local law firm located right here in Dothan.

When you first think about a law firm, what is the first thing that comes to mind? Often, many of us think about associates or partners within the firm. Associates are attorneys who are paid as employees, and partners are senior attorneys with a financial stake in the firm. Do you know, however, what an “of counsel” attorney is? Many people have heard the term, but are mostly unfamiliar with what exactly an “of counsel” attorney’s role is within a law firm. 

An “of counsel” attorney refers to an attorney who is employed by a law firm but is not considered an associate or partner. The American Bar Association defines an “of counsel” attorney as 

1. A retired partner of the firm who, although not actively practicing law, nonetheless remains associated with the firm and available for occasional consultation.

2. A lawyer who is, in effect, a probationary partner-to-be: usually a lawyer brought into the firm laterally with the expectation of becoming a partner after a relatively short period of time.

3. A permanent status in between those of partner and associate, having the quality of tenure, or something close to it, and lacking that of an expectation of likely promotion to full partner status.

Typically, this type of attorney is a retired judge or government official transitioning into private practice or an attorney who is looking to downsize his or her practice. Lately, a growing trend involves smaller law firms partnering with attorneys who specialize in a particular practice area to provide additional and specialized services. Being an “of counsel” attorney provides a more flexible and less time-intensive schedule for those looking to still participate in the practice of law but with a reduced time commitment.  

We encourage you to ask us your questions about the types of legal services you need and gain insight on the steps you need to take. Remember, we are here to help you find and obtain the planning you need both now and in a crisis. If you have questions or are in need of further guidance, do not wait to reach out to us.

Once you have an idea for a business, there are many important steps to take before you can officially open your doors. Deciding which type of corporate set up is right for you is one of the first, and perhaps most important, steps.  

The Internal Revenue Code allows for two different levels of corporate tax treatment. Subchapters C and S of the code define the rules for applying corporate taxes. Subchapter C corporations include most large, publicly-held businesses. These corporations face double taxation on their profits if they pay dividends. C corporations file their own tax returns and pay taxes on profits before paying dividends to shareholders, which are subsequently taxed on the shareholders' individual returns. To help you learn more about this type of corporation, we want to share with you a few things to know when choosing to form a C Corporation.

First, it is important to understand that a C Corporation has limited liability. This means that the liabilities of the corporation are separate from those of the shareholders. Typically, the owners of a C Corporation are not held liable for the corporation’s actions. This does not apply across the board, however, and if certain rules are not followed, the owners may find themselves liable. Your business law attorney can discuss both the ramifications and significance of this type of corporate structure with regard to liabilities.

Next, the ownership of a C Corporation can be transferred. The “owners” of a C Corporation are those who hold the corporation’s stocks and actually exist separate from the corporation itself. C Corporations are typically larger businesses who are intended to publicly trade shares. Incorporating as a C Corporation generally suggests that you expect to significantly grow your business over time.

There are some disadvantages, however, to setting up a structured C Corporation. This type of corporation has a different tax structure than a Limited Liability Company (LLC) or an S Corporation,  as investors are taxed double when they receive dividends. There are also stricter regulations that must be met when creating and maintaining a C Corporation that other businesses do not have to follow. Discussing your business plans with an experienced business law attorney can help you better understand the laws and regulations you must comply with when setting up a C Corporation.

These are just some of the factors you should consider when choosing to form a C Corporation. Never undervalue the advice of an attorney on this, or any business matter. If you have questions or are in need of further guidance for your business, do not wait to reach out to us.

Tax season is almost over and the April 15th filing deadline is in sight. There is still time, however, to maximize your deductions and try to lower your tax bill or increase your refund before the deadline arrives. To help you accomplish this, we want to share with you a few ways to make last minute filing as efficient and effective as possible.

First, have you contributed to your traditional IRA lately? If you have a traditional IRA, you can still contribute to it for the 2018 tax year until the filing deadline. If you are under the age of 50, you can contribute up to $5,500, while if you are over 50, the amount increases to $6,500. If you do not currently have a traditional IRA but are considering opening one, there is still time to accomplish this before April 15th. Any amount contributed to the IRA up to the $5,500 and $6,500 caps may be deductible on your tax return.

Next, consider contributing to your health savings account (HSA). HSAs enjoy a unique tax benefit, as qualified participants can receive a tax deduction by contributing money to their HSA. These funds can be invested and can grow while being tax-deferred. Additionally, if you use any of the funds for qualified medical expenses, those withdrawals are not taxed, regardless of how much profit your investments have made.

Finally, we cannot stress enough the importance of filing your return in a timely manner. If you are worried about being unable to pay any taxes you owe, we encourage you to file your return anyway. The interest charged on an unpaid balance is 0.5% per month, while the penalty for failure to file is 5% on top of your balance. If your tax bill is higher than you were expecting, you may set up a monthly installment plan with the IRS to pay off your bill. You will still have to pay interest on any unpaid balance each month, but this may be an easier way for you to manage your tax bill.

Above all, remember that organization and preparation are key to successfully filing your taxes in a timely manner. Do not underestimate the value of an experienced, local tax attorney to help  guide you through the process. If you have questions or are in need of further guidance when preparing your taxes, do not wait to reach out to us.