Brenton C. McWilliams
Brenton C. McWilliams, Orange Beach Lawyer Attorney


Discussing Relevant Law Topics

Estate Planning Topics: Is a Revocable Living Trust Right for You?

Is a revocable living trust right for me? In this article, I’ll help you make that decision by answering the question “What is a revocable living trust?” and providing a list of the pros and cons of using a revocable living trust as part of your estate planning.

What is a revocable living trust?

Sometimes called a living trust or just a revocable living trust, the term revocable living trust generally refers to a trust setup during a person’s lifetime for the purpose of distributing that person’s estate at their death. When you think of a trust, you make think of the long-term dynasty trusts designed to carry wealth through multiple generations of a family that are commonly part of television and movie plots. Although that’s a common use of trust, a trust can also be a useful planning tool for more simple estate plans.  The person creating the trust is referred to as the grantor or settlor of the trust. A typical scenario would be a trust that becomes irrevocable at the grantor’s death, provides for a new trustee at the grantor’s death, and instructs the trustee how to distribute the property within the trust to the trust beneficiaries. To take full advantage of the benefits of a revocable living trust, the property of the grantor should be placed in the trust at creation. Then, a pour over will is created in case any later acquired property is omitted from the trust. If there are assets outside of the trust without a defined beneficiary, the executor can probate the pour over will to move those assets into the trust to be distributed according to the terms of the trust.

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Estate Planning Topics: Is my Last Will and Testament from Another State Valid in Alabama?

On the coast, we regularly have new residents who move in from another state, particularly our neighboring states: Florida, Georgia, Mississippi, Louisiana, and Texas. I’m frequently asked “Is the will I created in the State of ________ valid in Alabama?” The answer is found in Alabama Code § 43-8-135, which states: “A written will is valid if executed in compliance with section 43-8-131 or if its execution complies with the law at the time of execution of the place where the will is executed, or with the law of the place where at the time of execution or at the time of death the testator is domiciled, has a place of abode or is a national.” In short, if the will was valid when it was created (executed) according to the law of the state where it was created (executed), then the will is valid in Alabama. 

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What do you do if your application for Medicaid long-term care benefits is denied by the Alabama Medicaid Agency?

What do you do if your application for Medicaid long-term care benefits is denied by the Alabama Medicaid Agency?

If you apply for Medicaid and are denied Medicaid benefits, you may appeal the determination by filing an appeal with the Alabama Medicaid Agency within 60 days from the date of the determination.

After sending in an application for long-term care benefits to the Alabama Medicaid Agency, the applicant will receive an award letter. The award letter explains the decision made on the application including whether the applicant will receive benefits, when the applicant will begin receiving benefits, whether there is a transfer penalty imposed on the applicant as a result of an uncompensated transfer (link to other blog), and any other limitations on benefits. If you disagree with the Alabama Medicaid Agency’s determination, you are allowed to appeal the decision through what’s generally referred to as a fair hearing.

The Appeal Procedure – Fair Hearing

The appeal must be in writing and filed with the Alabama Medicaid Agency within 60 days of the agency’s initial determination. The appeal must be filed on time or the agency will not grant a hearing.

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What is a personal care agreement?

A personal care agreement is an agreement to pay a caregiver. The term is usually used in the context of discussing an agreement to pay someone for caregiver services who traditionally would not expect payment, such as a family member. Gifts to family members, if made during the lookback period, may result in a transfer penalty when an application is made for Medicaid. However, by using a personal care agreement, a family caregiver may be compensated for the time they spend and the services they provide caring for their loved one.

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What is the income cap for Alabama Long Term Care Medicaid?

What is the income cap for Alabama Long Term Care Medicaid?

The income cap for Alabama Long Term Care Medicaid is $2,313 as of 2019 (the excess over this amount may be put into a Qualified Income Trust).

Medicaid is a means-based benefit program. To receive benefits under Medicaid, individuals applying and renewing must meet certain financial criteria to qualify for benefits. One of those requirements is a cap on the income the applicant receives each month. The income an applicant may receive each month is capped at $2,313 as of 2019. However, if an applicant is ineligible because the applicant receives income over the cap, the applicant can become eligible by placing the excess income in a Qualified Income Trust.

For married couples, unlike the asset requirements, the spouse’s income is not considered for eligibility. Only the applicant’s income is considered. If only one spouse is applying for or receiving Medicaid benefits, the spouse not applying for or receiving benefits (the Community Spouse) may be entitled to receive a portion of the applicant spouse’s income.

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What are the asset eligibility requirements for Alabama Long Term Care Medicaid?

For a single applicant: $2,000 in countable resources

For a married couple where both spouses are receiving Medicaid benefits: $3,000 in combined countable resources

For a married couple where only one spouse is receiving Medicaid benefits: One half of the couples combined countable resources with a minimum of $25,284 and a maximum of $126,420

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Medicaid Planning: What is the Medicaid lookback period?

When application for medicaid nursing home benefits is made, medicaid requires the applicant to disclose any gifts made during a certain period leading up to the application. In Alabama, that period of time is 60 months (5 years). This 60 month period of time is commonly known as the medicaid lookback period. Any gifts or transfers of assets for less than market value made during the lookback period may result in a transfer penalty.

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Alabama Limited Liability Company Benefits: Limitation of Liability

The limitation of liability provided for the owner (member) is probably the number one reason businesses choose to form a limited liability company. Subject to some limitations, a limited liability company owner is not personally responsible for liabilities incurred by the LLC.

A contract or loan made by the LLC is a simple scenario to use as an example. The LLC has obligated itself to perform the contract or pay back the loan. The LLC functions as an entity separate from its owner. If the LLC defaults on the contract or loan, the LLC must pay any judgment using the assets or income of the LLC. However, if the LLC does not have sufficient assets or income to pay the judgment (or for the judgment creditor to collect from) the owner or owners (members) normally would not be required to use personal assets held outside the LLC to pay the judgment.

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How is an Alabama Limited Liability Company Managed?

In Alabama, the rights and obligations of the limited liability company owners are typically set out in two separate documents. The certificate of formation, formerly referred to as the articles of incorporation, is filed with the probate office and secretary of state to form the LLC. Very little information is required for the certificate of information. Since the certificate of formation becomes public record after filing, it usually includes nothing more than the required information including the name of the LLC, the organizer, the name of the registered agent, the address of the registered and whether the LLC is a series LLC.

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What is a Limited Liability Company?

A limited liability company or LLC is a business entity created by state law. Limited liability companies are similar to corporations such as the companies traded by stockholders on Wall Street. However, the rules for limited liability companies are much more flexible allowing the complexity of individual LLCs to be easily adapted to fit the needs of each business. For example, a start-up LLC with a single member could be created with complete authority vested in the single owner and minimal reporting requirements. A more complex business with multiple owners could design its LLC with a board of directors, executive officers and non-voting economic interest owners.

Limited liability companies also offer flexibility in taxation. The IRS classifies a single-member LLC as a disregarded entity and treats it as a sole proprietorship for income taxes. An LLC with multiple members is treated as a partnership by default with a share of the income passed through to each individual member for reporting on their personal income tax return. In some circumstances, a limited liability company can also make an election to be taxed as either a C-corporation or an S-corporation.

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Federal Wage and Hour Laws: Unpaid Lunch Breaks

In this article, I’ll discuss the topic of whether an employer is required to pay its employees for a lunch break under the federal wage and hour employment laws. 

Let’s start off with a hypothetical situation. A group of non-exempt employees from a company regularly go out of town to work an entire day on a project. In the middle of the day, all the employees go to lunch together at a restaurant. The company pays for the lunch and they all sit together at a table. The project manager uses the lunch time to talk with the other employees about the work already completed in the morning and how they’ll coordinate the remaining work in the afternoon. The employees are paid by the hour, but the company does not pay the employees for this lunchtime. 

The question is, should the employer pay for this lunch break? My first thought would be “an employer normally isn’t required to pay employees for a lunch break, so why should it make a difference if they’re out of town or not? And, it’s pretty gracious of the company to cover the meal since going to eat is about the only option.” I also see how the employees could consider it unfair. Sometimes, on my lunch break, I like to run errands, play with my dogs or go buy a new tie. If an employee is stuck at a restaurant, out of town with their employer, they aren’t free to do any of these things. Both of these thoughts aren’t necessarily wrong, but they aren’t headed in the right direction.

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What is an Easement?

An easement, also sometimes referred to as a right of way (which may refer to a specific type of easement), is defined as an interest in real property owned by another that gives the owner of the interest a specific limited use or enjoyment. A road is a common example. The person who owns the easement has the right to travel over the other person's property. The property owner still owns the property underlying the easement, but the property owner’s use of their own property is secondary to the rights of the easement owner. In other words, the property owner’s use of the property is bound by the easement.  

Easements for utilities typically come to mind as common examples: power line easements and pipeline easements for water and sewer lines. However, easements come in a variety of less common forms. In Orange Beach and Gulf Shores, easements for access to the beach are common. Developers use many different easements forms to create the condominiums and modern developments which have been common along the Gulf Coast. 

Some states recognize easements which guarantee a piece of property the right to access light and air. Conservation easements limit the use of a land for conservation purposes such as the promotion of outdoor recreation or the establishment of a wildlife habitat. Some of the earliest types of easements involved the right to graze cattle on another person’s property and to take water from a pond or spring.

Easements are typically acquired by deed, but there are at least seven different ways to acquire an easement in Alabama. “These are: (1) by express conveyance, (2) by reservation or exception, (3) by implication, (4) by necessity, (5) by prescription, (6) by contract, and (7) by reference to boundaries or maps.” Helms v. Tullis, 398 So. 2d 253, 255 (1981). I have some disagreements with a couple of these, but I’ll save them for another article.

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