Our Estate Planning and Elder Law FAQs

How do I set up a trust? Does a will have to be notarized to be enforceable? Is my mother eligible for Medi-Cal? Who should I name as a guardian to my children in my will? In our FAQs, we offer answers to the most commonly-asked questions about wills, trusts, probate, and other estate planning topics.

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  • Who Qualifies For Medi-Cal?

    Medi-Cal is a combined federal and California state program designed to help people pay the costs of long term nursing care for public assistance recipients and other low-income persons. So it’s a needs-based program. Those who seek it must pass certain eligibility requirements. So you have to demonstrate that you have limited resources available. Notwithstanding the size of an estate however, with the right tools, and using our knowledge of the law and strategies that have been successful in the past, we may be able to…

    • Reduce or even eliminate your nursing home bills;
    • Protect your life savings and financial security;
    • Increase the amount of income the healthy spouse gets to keep; and
    • Safely pass on an inheritance to your children.

    A single person can have no more than $2000 of what we call countable resources. If an asset is not countable, it is considered exempt or unavailable. There are many assets that are exempt, such as the primary residence and retirement accounts (IRA’s). So really what we are talking about is cash – bank accounts, investment accounts, CD’s, etc.  There are also assets that can be classified as “unavailable” – which are considered exempt, because it can’t be easily disposed of, such as a timeshare.

    As for married couples, the healthy spouse may keep $126,420 (2019). This is referred to as the “community spouse resource allowance” (“CSRA”). However, if you retain an experienced attorney who specializes in Medi-Cal planning – they can typically increase the CSRA.

    As for medical condition, the elder must be limited in at least 3 activities of daily living (“ADL’s”)  -- such as needing assistance in walking, bathing, meal prep, or going to the bathroom.  

    What is the Look-Back?

    In the application process, Medi-Cal requires that you provide 30 months of statements for all financial accounts from the date of application. This is referred to as the “look-back” period. All other states have a look-back of 60 months from the date of application. At some point, California will also have a 60-month look-back. Medi-Cal is looking to see if any gifts were made (uncompensated transfers). For example, if you gifted $25,000 to an adult child within those 30 months, Medi-Cal will consider that an asset of the applicant’s, causing a delay in being qualified.  

    How Do You Spend-Down to Qualify?

    Let’s say that you are trying to get an elder qualified and they have about $30,000 cash that renders the elder applicant ineligible. Medi-Cal permits a “spend down” such as home repairs, purchasing a car (if you don’t have one), buying a burial plot, and attorney’s fees, among others.  This permissible spending down of cash would render you eligible for Medi-Cal.  

    How Do You Plan For Medi-Cal Qualification?

    In developing a comprehensive Medi-Cal plan there are three important areas to consider:

    • Eligibility Planning: First, we must get you qualified for Med-Cal.
    • Income Planning: Once qualified, we plan on reducing or eliminating your “share of cost” copayment. While Medi-Cal pays for a part of your care costs, you may pay the other part. With proper planning, we may be able to reduce your portion of those costs.
    • Asset Protection: Next we implement a plan to protect assets from Medi-Cal estate recovery (Medi-Cal Asset Protection Trust). See Can Medi-Cal Force Recovery From a Deceased Recipient's Estate?

  • How Can I File An Appeal Regarding My Medi-Cal Eligibility?

    If you don’t agree with the Medi-Cal determination of eligibility, you can appeal it and when a decision is made, you will receive a Medi-Cal Notice Of Action (“NOA”) in the mail. If you are approved, the NOA will include information of your eligibility and benefits. If you are denied, it will include information on your right to a hearing and have an appeal. That would be in the county where you applied so you’d get that appeal and if the appeal was denied then you can go to the Appeals Court.

  • What’s California Probate? How much does it cost? How long does it take?

    Probate is a legal proceeding that is used to wind up a person’s legal and financial affairs after death. In California probate proceedings are conducted in the Superior Court for the county where the decedent lived, and can take at least 8 months and sometimes as long as several years. The California Probate Code sets the maximum attorneys fees for a probate: 4% of the first $100,000 of the estate, 3% of the next $100,000, 2% of the next $800,000, and 1% on amounts over 1 million. It is noteworthy that the fees to the attorney are calculated on the gross fair market value of the property going through probate. Also note that the executor is entitled to the same amount of fees.

  • Are there assets that would not have to go through probate?

    Some kind of assets transfer automatically at the death of an owner with no probate or trust administration required. The most common kinds of such assets are:

    • Joint Tenancy; Tenancy by the Entirety; or Community Property With Right of Survivorship 
    • Beneficiary Designations – retirement accounts and life insurance policies have named beneficiaries.
    • Payable on Death Accounts/Transfer on Death Accounts

  • What’s California Trust Administration?

    After someone passes away who had a trust, trust administration must be completed by the Successor Trustee named in the trust. There is much to do. Generally a Successor Trustee will carry out his or her duties with the help of an experienced estate planning attorney.

    Even though there are many duties for the Successor Trustee to carry out (e.g. notice to beneficiaries, manage assets, file tax returns, pay off creditors, etc.), trust administration is less expensive (usually 1/5th the cost of probate) and easier than Probate.

  • Can Medi-Cal Force Reimbursement From a Deceased Recipient's Estate?

    Medi-Cal can demand to be reimbursed for all benefits paid after the Medi-Cal beneficiary’s death. This could include forcing the sale of the family home. However, there are several significant exceptions and methods to avoid this. Medi-Cal will delay recovery during the life of a surviving spouse. Most importantly, Medi-Cal can only recover against property that is in the estate of the Medi-Cal recipient (or surviving spouse) at the time of their death. There are planning tools we have that can assure that there is little or no property that will be considered to be in the Medi-Cal recipient’s estate, therefore, no recovery. There are technical pitfalls and significant tax impacts if this is not done correctly – so please give us a call!

  • Should I consider a special needs trust?

    As with any type of trust, a special needs trust is created when someone identifies property to be managed by someone else for the benefit of named beneficiaries. In the case of a special needs trust, the beneficiary usually has a disability that makes the beneficiary unable to manage his or her own money independently.

    If you would like to provide financial assistance to someone with special needs, then a trust may be a useful legal tool for achieving your goal.

    Benefits of a Special Needs Trust

    While each situation is unique, the following are some potential benefits of a special needs trust:

    • A special needs trust may allow the beneficiary to continue benefiting from government assistance programs. If the beneficiary qualifies for Medi-Cal, Supplemental Security Income (SSI), or other government benefits that are based on income, then the beneficiary may still continue to qualify for those benefits even if a special needs trust is established. It is the trustee, not the beneficiary, who has control over the trust assets. Therefore, the assets will not be considered for government assistance program eligibility. However, if you were to make a gift outright or leave a direct bequest in your will, then the beneficiary would own the property outright, and the recipient might be ruled ineligible for government assistance programs.
    • Someone else is in charge of the money. The trustee will make decisions about how the assets of the trust are invested and dispersed to the beneficiary.
    • You can decide how and when the beneficiary benefits from the trust. The terms of the trust, for example, could require that the trust money be used for necessities, for recreation, for medical care, or for a combination of things.

    It can be scary to think about what will happen to your loved one with special needs after you are gone. It is essential to be prepared, to think about all possible contingencies, and to continue to help your loved one for a long time to come.

    As with any type of trust, it is important to talk to an experienced estate planning lawyer before deciding whether or not to set up a special needs trust. Please contact us today via this website or by phone to schedule a free, confidential, no-obligation consultation about your unique needs.

  • How long does it take to settle a trust?

    The answer to your question depends on the complexity of the trust assets, whether any creditors have claims on the trust assets, the tax implications of settling the trust, and whether any of the beneficiaries contest the proposed settlement. A simple trust settlement could take as little as a few months, while other trust settlements may take significantly longer.

    Factors That Make Some Trust Settlements Take Longer

    A trust may take longer to settle if:

    • There are many assets. Every asset must be located and valued before a settlement occurs.
    • Assets are hard to value. Trustees have a fiduciary duty to the beneficiaries of the trust. This means that they need to get a reasonable value for each asset. This can take some time in a poor economy or if there is no ready market for a specific asset.
    • A beneficiary cannot be located. All named beneficiaries should be informed of the trust before a settlement is reached.
    • A family member or beneficiary is contesting the validity of the trust. This may occur if the person was not informed of an estate plan and believed it to be something other than what existed at the time of the decedent’s death. Sometimes, if children or grandchildren are treated differently or if significant assets are left to charity, then a dispute may arise.
    • Creditors claim a right to the trust property. Some creditors, such as the IRS and hospitals, may claim a right to the trust assets to satisfy existing debts.

    Any of these factors can stretch the settlement of the trust out by months or years, depending on the unique issue.

    How an Attorney Can Help a Trust Settle Fairly and Quickly

    If you are a trustee or a trust beneficiary and you believe that the trust is not being settled quickly enough, then you should consult with a lawyer. You may be able to go to court to force action to settle the estate, but there are pros and cons to this that should be thoroughly explored with an attorney before you do anything. Your goal may be a quick settlement of the trust, but that shouldn’t come at the expense of a fair settlement of the trust.

    To learn more about your rights and for help settling a trust, please contact us today via this website or by phone to schedule a free and confidential consultation.

  • Does a trustee need an attorney for assistance with the trust administration process?

    Trustees have important legal responsibilities. When you were asked to be a trustee, you may have been honored and eager to help. While those things may still be true, now you have an important job to do and certain legal responsibilities that must be fulfilled.

    What’s Expected of You

    As a trustee, it will be your responsibility to:

    • Identify all trust assets.
    • Treat all of the beneficiaries equally—unless the trust states that you can do otherwise.
    • Make trust distributions according to the terms of the trust.
    • Make sure that you do not use the trust assets for your own benefit or combine trust assets with your own.
    • Invest trust assets in a reasonable way that will allow them to grow with little risk.
    • Keep accurate trust records.
    • Report to the beneficiaries as required.
    • File all applicable tax returns.

    Other responsibilities may also be described in the trust document.

    You Don’t Have to Do This Alone

    Being a trustee can take a lot of time and a lot of effort. It can also put you at risk of being sued if you make a mistake. Accordingly, you may want to protect yourself by working with professionals who can make sure that you are doing everything correctly. For example, an accountant can help with tax returns, a financial planner can help you with investments, and a lawyer can make sure that you are complying with all applicable laws so that you, the trust grantor, and beneficiaries are all protected.

    While not every trust beneficiary needs a lawyer, many will benefit from the experience of a skilled attorney. If you are a trustee, then we encourage you to contact us today for an initial consultation about your rights. If we believe that you can handle your trustee duties independently, then we will tell you that. Likewise, if we believe that we can help you comply with applicable laws and administer the trust fairly, then we will also tell you that.

    In some situations, the trust itself may pay for the professional services needed by the trustee. Therefore, you have nothing to lose by scheduling a free consultation with us. Please contact us via this website or by phone today to learn more.

  • Isn’t Asset Protection Only For Those With A Very High Net-Worth?

    Even people with fewer assets than you might imagine could benefit from asset protection planning. Asset planning protection is not something that should only be considered by millionaires. Instead, anyone who owns assets that would be painful to lose should consider taking action now to protect those assets in case a problem arises in the future.

    A client with a net worth of $5 million won’t be nearly as affected by a $1 million lawsuit judgment compared to a client with a $1 million net worth. Right? The client with a $5 million net worth can pay the judgment and their life won’t drastically change whereas the other client would be bankrupt. It’s about peace of mind. Clients with a net estate of $1 million and up should consider asset protection.

    Why an Asset Protection Plan Is Important for You

    Without an asset protection plan in place, you are vulnerable to the unpredictability of lawsuits, bankruptcy, and other legal problems that could result in the potential loss of many of your assets. Something as simple and unpredictable as a car crash could mean that you lose everything that you’ve worked for or inherited.

    Accordingly, it is important to consider an asset protection plan if:

    • You own property.
    • You own a business.
    • You are a professional who may be sued, such as a doctor, lawyer, accountant, or real estate investor.
    • You have a lot of assets that could be vulnerable in a lawsuit.
    • You are close to retirement and want to make sure that your retirement funds are secure.

    The risk of losing your real estate, your business, or your other assets is just too great a chance to take when there are options available to protect these assets from loss.

    Get Help With Your Asset Protection Plan Today

    If you think you may need an asset protection plan, then it is important to consult with an experienced estate planning lawyer at your earliest convenience. There are many different legal strategies that could help you, depending on your unique situation. If you use the wrong strategy or if you fail to implement the strategy correctly, then your assets could remain at risk.

    An estate planning lawyer can help protect you from risk and can help you protect your assets for your use and enjoyment and for your heirs and beneficiaries. To learn more, please schedule a free, confidential, no-obligation consultation with the Estate Planning Law Center at your earliest convenience. You never know when a lawsuit or other unplanned event could put your assets in jeopardy.