California parents who have special needs children have unique challenges when they’re doing their estate planning. That’s why it’s essential to have an experienced California estate planning attorney guide you through the process and help you avoid some common mistakes.

Following are some of these mistakes and how they can impact the future not only of your special needs child, but of their siblings and other family members:

— Not having a revocable living trust: Many people establish a special needs trust for their child within their will. However, these can become public record and sometimes be accessed via the Internet. This can leave your children vulnerable to those who would take financial advantage of them. It’s important to establish a separate trust so that it can’t be accessed by anyone who doesn’t need to see it.

— Choosing a trustee from within the family: It’s common to choose family members as trustees in most situations. However, trusts for people with special needs are more complex. Mistakes in distributions can disqualify the person for government benefits. It’s better to engage a trust company or bank that knows the laws and keeps up with changes.

— Not providing sufficient assets for the trust: Remember that the funds in the trust may need to last your child for a lifetime. Often, parents purchase a permanent life insurance policy. The younger the parents are when they do that, the less expensive the policy will be. Don’t rely on your other children to provide financial support for their special needs sibling.

— Not inviting others to contribute to the trust: Although you normally shouldn’t place all of the financial burden of caring for your child on others in the family, it’s a good idea to invite them to make gifts to the trust or to name the trust as a beneficiary of their retirement accounts or life insurance policies.

Your California estate planning attorney can advise you on your special needs trust based on your own unique family and financial situation. He or she will also help you keep it up to date as circumstances and laws change.

Source: Yahoo! Finance, “6 Planning Mistakes You Can Avoid If You Have a Special Needs Child,” July 06, 2016

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Family issues and legal issues often intersect. When you have children with special needs, there are even more circumstances to consider than the average family. Most families can discuss how they should deal with unexpected incapacity or the administration of an estate.

A child with special needs often neither able to participate in this conversation or handle their own care when you are not there to help. In addition to adequately providing for the child in an estate plan, parents and caregivers must think about the child’s life without them and proceed carefully in order to protect the child’s eligibility for government benefits.

Divorce is a family issue that complicates estate planning even further. That is why it is important to consult with a legal professional for estate planning when financially preparing for the future.

Estate planning for special needs

If you have a child with special needs, it is important to ensure that his or her needs will be met if you or other caregivers pass away unexpectedly. Because many children with special needs require care and supervision throughout adulthood, this requires a lot of long-term planning.

An estate attorney can help you understand what documents need to be on file in order to safeguard your child’s future without endangering his eligibility for government benefits such as Supplemental Security Income and Medicaid.

A special needs trust can provide a layer of protection for your child. This is a trust that is created and funded by a third party such as an authorized non-profit organization. It can be administered by a family member or a court-appointed trustee. A special needs trust will not prohibit the individual from receiving government benefits.

There are other estate planning documents that are important for families with children who have special needs. An attorney can help prepare these documents, which include a will, a general durable power of attorney (GDPA), a durable medical power of attorney, and a living trust.

How does divorce affect the estate?

Divorce is a difficult decision, particularly for parents with a special needs child. You may worry about whether the child can handle the change or if you will have the funds necessary to be able to provide the same care. The second issue is one that your divorce lawyer can help you tackle, but it is a good idea to bring in an estate attorney as well during the process.

A special needs trust is particularly beneficial in the case of divorce, as it can be used to receive child support payments. The effect of child support on eligibility for government benefits can be mitigated if the special needs trust is properly implemented. This should be part of the property settlement agreement, a stage of the divorce proceedings.

Guardianship and custody is another significant concern in a divorce involving a child with special needs. In the case of a minor child, an agreement regarding parenting responsibilities should be part of the property settlement agreement. If the child has reached the age of majority, the court will undertake a guardianship proceeding to determine the type and quality of care needed.

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When you’re drawing up your estate planning documents, your California estate planning attorney will remind you that you need to ensure that you’ve designated the beneficiaries whom you want to receive the assets from your 401(k), other retirement accounts, life insurance policies and annuities with the company or institution where they’re housed. Many people think that just listing the beneficiaries for those assets in their will is sufficient. However, it’s not. The beneficiary designations on those accounts and policies supersede what’s in the will if there’s a discrepancy.

There are some important things to keep in mind when naming beneficiaries. For example, you should name a primary as well as a contingent beneficiary. This will save you having to make a change should your primary beneficiary pass away.

If your children are still young, it’s best not to name them under the assumption that they’ll be grown by the time you die. None of us knows when that will happen. One option is to set up a family trust and make that the beneficiary.

Review your beneficiary designations on your accounts and policies regularly to ensure that they’re still what you want. Some companies will send reminders once a year to do that. Of course, if a situation changes and you no longer want someone to receive your assets, make the change on your accounts and policies immediately. Your attorney can advise you on whether you need to make any amendments to your estate plan.

Each person’s situation is unique. For example, if you are leaving the bulk of your estate to charitable organizations, you may want to set up a revocable living trust and make that the beneficiary on your accounts and insurance policies. There are many options. Your California estate planning attorney can review those with you and help you develop an estate plan that helps ensure your assets are distributed as you choose after you’re gone, with as little hassle and expense to loved ones as possible.

Source: Rocky Mount Telegram, “Things you should know about naming beneficiaries,” Anthony Engrassia, July 15, 2016

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No one likes to think about their own mortality or that of their loved ones. However, many an estate has languished in probate for much longer than necessary because adult children of aging parents were not clear on their parents’ wishes.

Having an uncomfortable conversation now can save everyone a lot of unneeded stress, which could undoubtedly be compounded by grief. In fact, you may find that your parents are relieved you chose to broach the subject.

What you need to talk about

As we approach the end of our lives, unique expenses and financial situations tend to crop up. It’s best if your family already has a plan that was agreed upon while your parents were healthy and sound of mind. If you have one or more siblings, you need to establish who will be responsible for what duties and how – or if – those duties will be financially compensated by the estate.

Eldercare is one issue that is often neglected. Do your parents want to move to an assisted living facility when they are no longer able to care for themselves, or will the responsibility fall on the children? Statistically, the burden tends to fall unequally on one sibling, so if the family has hammered out expectations ahead of time, it can save a lot of resentment and strife down the road.

Other things your family needs to decide upon sooner rather than later include:

• Who will help the parents manage investments and retirement income?
• Who will oversee finances if the parents become incapacitated?
• Who will serve as executor or administrator of the estate?
• Who will have power of attorney?
• Who will make healthcare decisions?
• Where are important financial documents kept, and who will have access to them?

Preparing for estate administration

Estate administration can be a complex and emotionally charged task, but with some preparation and legal assistance, the estate can be settled in a fair and timely manner. An estate planning attorney can meet with your family and help you determine what type of estate plan is appropriate.

A legal professional can help you understand documents including wills, trusts, deeds, healthcare directives and more. They may even suggest plans for eventualities you hadn’t even thought of, such as pet guardianship.

Although it is often painful to think of life after your parents have passed on, adequate preparation can prevent hard feelings, family feuds and litigation. If you have aging parents, plan a time for your family to meet and discuss these issues with an estate lawyer as soon as possible.

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Generally, when people think about estate planning and administration, it’s in relation to how a person’s property, money and other assets are divided up and bequeathed to heirs and other beneficiaries. However, what happens to a person’s debts when they die? That generally depends on the type of debt, what state the person lived in and whether or not there is a surviving spouse.

Usually, a person’s debts are paid from his or her estate during the probate process. Some assets, however, do not have to be tapped to pay outstanding debts because they don’t go through probate. These generally include any type of account or insurance policy that has beneficiaries. Retirement and brokerage accounts are two examples.

California is a community property state. That means that if a person is married at the time of death, any debts acquired after marriage are the responsibility of the surviving spouse. That’s true even if the debt was only in the deceased person’s name.

If you are doing your estate planning, it’s important to discuss any outstanding debts with your attorney, particularly if you don’t believe you’ll have the assets in your estate to cover them.

If you are a surviving spouse or family member administering an estate, you should discuss the handling of any outstanding debts with an estate planning attorney. Unfortunately, some unscrupulous collectors go after surviving family members to try to get money that they may not be legally entitled to collect. Every state’s laws are different, so it’s essential to seek guidance from an experienced California estate planning attorney.

Source: Forbes, “What Happens To Your Debt After You Die?,” Steven Richmond, Next Avenue, accessed July 15, 2016

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You’ve spent a good chunk of time and probably no small amount of money executing a detailed estate plan. Then you move to another state. Will you have to do the whole thing over again?

Likely, you won’t. As long as it was a valid will under the laws of the state in which it was executed, it will probably be valid in your new home state — with some caveats.

Estate planning and property laws vary among states. Therefore, it’s essential to consult with an estate planning attorney as soon as possible once you’ve settled in to confirm that the will remains valid and to determine whether any changes need to be made to ensure that it conforms with the laws of your state.

For example, while few people have handwritten wills these days, it’s important to know that these aren’t valid in all states. They are recognized here in California. However, they must meet certain requirements. A California estate planning attorney can provide guidance regarding any changes that may be required if you’re moving here.

Whether you’re moving in or out of California and if you’re married, remember that California is a community property state, but many states aren’t. Marital assets are considered differently in community property states than in those that aren’t. This isn’t just something to concern yourself with if you get a divorce. It can also be relevant to your estate planning documents.

Another area of estate planning law where states vary is who can be the executor. Some states have restrictions on non-relative executors living in other states. If you’re moving far away from family members or others whom you’ve chosen to be your executor, power of attorney or health care proxy, ensure that it’s still feasible for them to handle those responsibilities. If you’ve moved to Los Angeles from Maine and your family is back there, ensure that they’re able and willing to handle the necessary duties if needed.

The best thing to do is find an experienced estate planning attorney in your new state, even if you’re maintaining your current residence as well. Your estate planning attorney may be able to recommend someone. Your new attorney can thoroughly review your documents to ensure that they comply with the law and are still the best choices under your new home state’s laws for documenting your wishes.

Source: New Jersey 101.5, “Is that will still valid if you move?,” Karin Price Mueller, NJMoneyHelp.com, June 17, 2016

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The estate of a Pacific Palisades man who died last summer without a will is making news. However, it’s not because family members are battling with each other over his money (some $250,000 in cash alone) or other assets.

The story has garnered media attention because the family has announced that it plans to destroy millions of dollars in firearms and ammunition that he had accumulated. The stockpile included over 1,500 guns and 6.5 tons of ammunition, all purchased legally.

However, according to an attorney for the family, they want no part of them. He says, “They want these instruments of death to be destroyed. They don’t want [them] out on the street.” He says that they made the decision to destroy the stockpile rather than sell them and potentially make millions of dollars because “[t]hey don’t want them to contribute to the carnage. Especially in light of San Bernardino and Orlando, as ordinary citizens they feel like a stand should be taken.”

The attorney said that the family hopes to send a message to elected leaders at a time when gun control is being hotly debated in Congress, and proposed gun safety measures have been voted down.

The inheritance is still being litigated. Since there was no will, his closest relatives would be the heirs to his estate.

Although the 60-year-old man’s death last July was determined to have been from natural causes, the circumstances around it, just like those surrounding his life, were strange. His decomposing body was found in his SUV in a Bristol Farms parking lot in Santa Monica. He had reportedly told neighbors as well as a woman identified as his fiance that he had worked for the CIA or other government agencies.

While this is certainly an unusual case and an unusual person, it actually does hold a lesson for everyone. If you have particular wishes for how your assets should be used, distributed or donated after your death, it’s important to specify that in your will. Your estate plan provides you the ability to ensure that your intentions, plans and wishes are carried out when you’re no longer around.

Source: ABC News, “Family Plans to Destroy Stockpile of Inherited Guns and Ammo Worth Millions, Lawyer Says,” Catherine Thorbecke, June 22, 2016

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Any person who has administered an estate knows that, even in this digital age, the amount of paperwork can be overwhelming. Once the estate is settled, it can be tempting to shred all of the documents that have been taking up room in your filing cabinets, drawers or wherever you’ve stashed them. Not so fast.

Even if an estate has been settled, the Internal Revenue Service may have questions or issues years later. Generally, as long as all of the appropriate tax returns for the deceased person were filed correctly, the IRS isn’t going to audit the estate after seven years have passed. However, you should still keep the tax returns. You may be able to shred the supporting documentation. It’s always a good idea to scan it first so that you have a copy if you need it. A California estate planning attorney can advise you on that.

Another issue that may warrant hanging onto documents is the potential for contests to the will. In California, only certain people, generally those who would reasonably have been considered potential heirs or beneficiaries, can contest a will. They must be a valid reason for doing so, such as a later will or belief that there was undue influence or fraud involved in drafting or changing the will. There are statutes of limitations for will contests. Therefore, again, it’s best to consult an attorney who’s knowledgeable about California estate planning law.

If you were working with a knowledgeable estate planning attorney when you were administering the estate, distributing assets, paying creditors and handling taxes, the chances of anything coming back to haunt you years later are lower than if the estate wasn’t properly settled. However, you should always consult with an attorney before destroying any documents related to the estate.

Source: Los Angeles Times, “How long should you keep paperwork about an estate?,” Liz Weston, June 19, 2016

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Most Californians have some familiarity with the Medi-Cal program. It’s basically our state’s version of Medicaid, and it helps cover low-income Californians’ medical care.

What many people may not realize is that if a loved one who was enrolled in Medi-Cal passes away, the state (specifically the Department of Health Care Services) may try to seek payment from the person’s estate for the premiums paid to the person’s health plan from the time they reached 55 — even if the enrollee never sought medical treatment. It’s called the Estate Recovery Program. If there’s not enough money in the estate to pay this bill, heirs may be asked to sign a “voluntary lien” on their home until they can come up with the money due.

The number of Medi-Cal enrollees increased significantly with the Affordable Care Act and the state’s Covered California program. It rose from about 3.5 million to over 12 million.

There are some exceptions in which DHCS won’t attempt to collect money. It won’t attempt to collect if the deceased person is survived by a spouse, a child under 21 or any child who has a disability or is blind.

There’s not a lot of recourse available if you’re hit with a bill by DCHS for a loved one’s Medi-Cal premiums. However, you should receive an itemized list of benefits that were paid, so it’s important to review that to make sure that it is accurate and that no exempt benefits, such as those for in-home support services, were included.

The state (and all states) are required to recoup some medical costs paid under the federal Medicaid program from beneficiaries’ estates. However, those are mostly benefits paid for nursing home care.

One California state senator has introduced a bill that would limit the amount of money that the DHCS could seek to recover. Similar legislation has been vetoed in the past by Gov. Jerry Brown. However, the current bill (SB 33) is before the legislature in the 2016 session.

If you have an elderly or ill loved one who is enrolled in Medi-Cal and/or is receiving Medicaid benefits for which recovery may be sought, it might be beneficial to consult a California estate planning attorney. He or she can provide guidance to help you determine how much of a recovery claim you may be hit with and how to deal with it.

Source: Center for Health Reporting, “More Californians face Medi-Cal death fee,” Emily Bazar, accessed June 17, 2016

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Some people are fortunate to stay physically and mentally sharp as a tack until their very last days, but many people just aren’t that lucky. As they get older, they may become more forgetful, disorganized, and physically weak. All the details that go into managing their every day lives may start to get overwhelming, and it can be up to their adult children to step in and help — whether the parent has asked for that help or not.

Introducing the idea to your own parents

For most people the idea that their parents – the people that helped them learn to care for themselves and their families – will need them to take control of personal health and financial accounts is not easy to think about. It’s hard for the parents too, to relinquish control to their own child.

If possible, don’t wait to talk about the idea of helping parents with finances and health care decisions until it is too late, and they are unable to participate in the discussion.

One way to keep topics such as finance on the table is to discuss some of your own plans.

Another is to jump in when there are related stories in the news.

Talking in a more generalized manner first, keeps many people from feeling defensive. Make as many plans together as possible with your parents’ full consent and understanding. Obtaining a power of attorney is less complex than being forced into court to win guardianship.

Determining what you will need to know

If you do take over financial and/or health care decisions for your parents, there are many details about their lives you’ll need to have at your disposal, such as:

• Where they hold their bank and other financial accounts
• Any plans they have made for their final resting place
• The location of safety deposit boxes
• Their sources of income and expenses
• Information on insurance policies
• Account numbers and passwords
• Any previous wills, trusts, or general estate planning that has already been done

Making decisions

Once you have information at your disposal, it is possible that you may discover some unwise decisions your parents have made. They might be building excess debt or may not have been living within their means. There may be accounts or services that need to be discontinued or started up.

You’ll also need to keep an eye out for people who my try to take advantage of your parents. Make sure creditors and solicitors know that you are overseeing your parent’s accounts.

Even when your parents’ finances have been simple, it isn’t unusual for adult children to uncover surprises. A qualified estate planning attorney can help you sort through the details or assist in obtaining a conservatorship so that taking over is as positive an experience as possible.

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