Jan Neal Law Firm LLC

Alabama Estate, Elder and Special Needs Law


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Welcome

Welcome to Jan Neal Law Firm LLC, located at 207 N. 4th Street, Opelika, Alabama 36801 where you can find the latest news concerning Elder and Special Needs Law in Alabama.  Contact Jan at 334-745-2779 or toll free 1-800-270-7635 or email her at neal@janneallaw.com, jbneal@icloud.com, jbneal@me.com.

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Stimulus Payments for Seniors Update

Late yesterday, after much congressional protest, the administration reversed course and announced that tax filing will not be required for Social Security recipients to receive their stimulus payments. 

It is not clear if this course reversal applies to those on Veteran’s Benefits and SSI, but it would be surprising if it did not. We will keep you posted.


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Stimulus Payments for Seniors

Pursuant to the CARES ACT (Coronavirus Aid, Relief, and Economic Security Act), individuals with income up to $75,000 for a single person or $150,000 for married and filing jointly are eligible to receive $1,200 for a single person or $2,400 for a married couple filing jointly. An additional $500 per qualifying  dependent child  under the age of 17 will also be provided to families.

For individuals who filed federal income tax returns in 2018 or 2019, you do not need to take any further action at this point. You will either receive the stimulus via direct deposit based on the information the IRS has on file or you will receive a physical check in the weeks to come.

More than 20 million taxpayers over the age of 65 do not file a federal income tax return each year – likely because their only source of income is Social Security benefits. For persons who may not have filed a 2018 or 2019 tax return, there does not appear to be clear directions at this time on how to ensure that they receive the stimulus. According to the CARES Act the filing of a tax return should not be necessary, and the payment could be direct deposited along with monthly benefit payments.  However the IRS has issued a notice that appears contrary to the actual CARES Act indicating that seniors on Social Security will need to file a simple tax return (which has not been made available at the end of March). There is also discussion of a web based portal at the Treasury Department through which people could enter their information (this has yet to be designed or implemented).

Regardless of the mechanism which will be used for “non-filers” the IRS will have to have the Social Security numbers of all parties to include any dependent children in order to generate the stimulus payment as well as information on bank accounts for direct deposit.

At this point, if you did not file in 2018 or 2019 you may want to  file a return either by hard copy or e-file. If you do not want to file the tax return for 2018 or 2019 you have the option to wait and see what action will be required of you. The stimulus payment is available through 2020, and tax payments for 2019 have been delayed until July, so you do not have to rush to file a tax return.

Be advised that the receipt of the stimulus payment will not be treated as a resource for one year and will not affect eligibility for federal means tested programs such as Medicaid, SSI or SNAP.

We will stay on top of this issue and continue to provide information as it develops in an effort to assure that all eligible seniors obtain their stimulus payments.    


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Teleconferencing Witnesses and Notaries

Power of attorney

Here is a shout out to Alabama Governor Kay Ivey. She issued a proclamation yesterday including the following authorization for witnesses and notaries to perform their duties through videoconferencing:

III. Notaries and witnesses

Because person-to-person contact increases the risk of transmitting COVID-19, I find that it would promote the safety and protection of the civilian population to adopt measures that reduce the necessity of in-person meetings. To that end:

A. Notaries in Alabama who are licensed attorneys or operating under the supervision of licensed attorneys may notarize signatures through videoconferencing programs and confirm signatures of witnesses who participate virtually through videoconferencing as though they were physically present at signing.

B. Any person who witnesses a document through videoconference technology may be considered an ‘in person’ witness, provided that the presence and identity of such witnesses are validated by the notary at the time of the signing by the same identifications required under current law.

C. The official date and time of the notarization shall be the date and time when the notary witnesses the signature via the videoconference technology. All documents must be returned to the notary for certification and execution.”

New times and new challenges call for new measures. I am glad to see Alabama stepping to the plate to make signing documents safer for the people of Alabama.


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Taking Care of Business

Our office is open for business, though things may look a little different these days. We are limiting in office appointments to accommodate plenty of distance and offering Zoom conferencing for those who either cannot or do not wish to leave home. We have years of experience conducting business over the telephone and email when those needing our services live at a distance or when caregiver children live out of state, so we are positioned to continue providing services during this time of social distancing. Contact our office if we can help in any way.


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2020 Change in Laws Governing Retirement Plans

A new law has passed as part of the federal budget bill that makes major changes to retirement plans. The new law is designed to provide more incentives to save for retirement, but it may require workers to rethink some of their planning. 

The Setting Every Community Up for Retirement Enhancement (SECURE) Act changes the law surrounding retirement plans in several ways:

  • Stretch IRAS. The biggest change eliminates “stretch” IRAs. Under current law, if you name anyone other than a spouse as the beneficiary of your IRA, the beneficiary can choose to take distributions over his or her lifetime and to pass what is left onto future generations (called the “stretch” option). The required minimum distributions are calculated based on the beneficiary’s life expectancy. This allows the money to grow tax-deferred over the course of the beneficiary’s life and to be passed on to his or her own beneficiaries. The SECURE Act requires beneficiaries of an IRA to withdraw all the money in the IRA within 10 years of the IRA holder’s death. In many cases, these withdrawals would take place during the beneficiary’s highest tax years, meaning that the elimination of the stretch IRA is effectively a tax increase on many Americans. This provision will apply to those who inherit IRAs starting on January 1, 2020.  
  • Required minimum distributions. Under prior law, you have to begin taking distributions from your IRAs beginning when you reach age 70 ½. Under the new law, individuals who are not 70 ½ at the end of 2019 can now wait until age 72 to begin taking distributions. 
  • Contributions. The new law allows workers to continue to contribute to an IRA after age 70 ½, which is the same as rules for 401(k)s and Roth IRAs.
  • Employers. The tax credit businesses get for starting a retirement plan is increased and the new law makes it easier for small businesses to join multiple-employer plans.
  • Annuities. The newly enacted legislation removes roadblocks that made employers wary of including annuities in 401(k) plans by eliminating some of the fiduciary requirements used to vet companies and products before they can be included in a plan.
  • Withdrawals. The new law allows an early withdrawal of up to $5,000 from a retirement account without a penalty in the event of the birth of a child or an adoption. Currently, there is a 10 percent penalty for early withdrawals in most circumstances. 

Given these changes, workers need to immediately reevaluate their estate plans. Some people have used stretch IRAs as an estate planning tool to pass assets to their children and grandchildren. One way of doing this has been to name a trust as the IRA’s beneficiary, and these trusts may have to be reformed to conform to the new rules. If a stretch IRA is part of your estate plan, it may be time to reconsider your existing plan.

To read the legislation, click here.  For more on the new law, click here and here.


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Vehicle Transfer Without Probate

Sometimes the only property in an estate that is not jointly titled is a vehicle. To solve the problem of getting the vehicle transferred and to keep from having to open a formal estate administration, if the vehicle is paid off, the next of kin may file an Affidavit for Assignment of Title for a Vehicle from a Deceased Owner Whose Estate Does Not Require Probate(Alabama Department of Revenue MVT 5-6).   

Title can be transferred by filing the affidavit at the tag and title office of the local probate court. If the vehicle is not paid off it will likely need to be refinanced, and the lender needs to be put on notice of the death.


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Alabama Medicaid for Long Term Care

To assist caregivers who are making arrangements for long term care a booklet concerning Alabama Medicaid is being made available to provide clarity for some of the issues that may arise and to provide basic information about the application process. The booklet is made available here and will remain available in the Publications section of our website. It can be read online or downloaded and printed.