Smart Death Planning
"but in this world nothing can be said to be certain, except death and taxes."
- Benjamin Franklin
A Revocable Living Trust is the foundation of a proper and complete estate plan that will protect your family and help keep you out of court if you become disabled or after you die. Here are some of the benefits of using a Living Trust:
Trusts Avoid Probate Court - If you die without a will OR with a will and your probate estate is larger than $150,000.00, the law requires that your estate pass to your heirs through the probate court. There are many reasons to avoid the Probate Court such as:
Trusts are private - no one will have access to a copy of your trust at the courthouse.
Trusts are less expensive than probate. The cost to purchase a trust and keep it up to date is less expensive than the court fees associated with the costs and headaches of a probate.
Trust administration after death is faster than the probate process. It takes only around 1 to 6 months depending on the issues and assets being administered. This provides a much faster inheritance for your kids.
Remarriage Protection. Trusts can protect your assets from future second husbands and wives.
Minimize Taxes. Trusts can help maximize tax savings.
Trusts can include "asset protection" for your kids inheritance to prevent your assets from being lost to their predators, creditors, divorcing spouses, bankruptcy and lawsuits.
Trusts protect children. You can ensure your descendants don't inherit your estate at age 18 which generally is a bad idea. You can reset the age of majority as you see fit.
Trusts help immediately. A will does not help you until you die. With a Trust, it begins working the minute you sign it. Wills have zero provisions for helping you if you become disabled.
Trusts give permission. Trusts can include provisions that give permission to your loved one who are helping you with your assets. This will protect them from being accused of identity theft, fraud, and elder abuse accusations.
Trusts Help With Medi-Cal Planning. Trusts can help if you need care in a skilled nursing facility and need Medi-Cal to pay. The trust gives flexibility to make transfers of assets in accordance with the rules of Medi-Cal. When your house is titled in a trust, it is protected from Medi-Cal Estate Recovery. That means the government cannot put a lien on your house.
A trust is the foundation of a great estate plan, but a complete plan requires some other necessary documents as well:
Expensive - Attorney fees are set by statute and are large. The "Executor" or person who hires the attorney gets the same amount as the attorney.
Lack of Privacy - the case is a "public record." Anyone can go down to the courthouse and see what you owned and the names of your beneficiaries (not safe for your kids!).
Long Time to Finish - A short probate takes 9 months. 2-3 years is common. It can take 3-20 years or more if contested.
A probate is easy to contest. If someone wants to contest your case in the probate court, all they need to do is hire an attorney and submit a petition.
Other Necessary Documents
for an Effective Estate Plan
Pour-Over Will - The only beneficiary of this will is your Living Trust. If you die with property outside of your trust that was supposed to be part of your trust, the pour over will acts as a "safety net." It can be used to make sure none of your property is distributed outside of your trust.
Powers of Attorney for Finances - This document gives your loved one the power to sign your name if you become disabled. It only works while you are living.
Advance Health Care Directive - This gives your loved one the power to make health care decisions for you if you are unable to make them yourself. Very important to put your wishes in writing that you do not want to be kept alive artificially if you have no hope of recovery. My document will help your loved one know exactly when it is appropriate for them to "pull the plug" which will help alleviate potential feelings of guilt that accompanies such a decision.
HIPAA Waiver - The rules of HIPAA are the privacy rules that govern health care providers. A doctor is unable to give medical information to anyone unless he has his patient's permission. The HIPAA Waiver is like a permission slip giving the doctor or medical personnel permission to talk to the people you list.
Living Will - Further evidence that you do not wish to be kept alive artificially if there is no hope of recovery. The Advance Health Care Directive controls this issue in California. This document is further evidence of your wishes and is required in many other states.
Asset Funding - Your trust won't work unless your assets are re-titled into the name of the trust.
Aging and Disability:
John L. Miller
Attorney and Counselor At Law
May 11, 1941 - May 20, 2018
"The only court process worse than a Probate is a Conservatorship"
- John L. Miller, Attorney and Counselor at Law
Conservatorship is a probate court procedure that happens while you are alive. If you become disabled without a proper estate plan in place, you could subject yourself to a humiliating, expensive, open to the public, time consuming court process that will last for the remainder of your life. However, this problem is easily avoidable for most people with a proper estate plan.
If you become subject to a conservatorship because you did not plan ahead, it takes many months of preparing the case and waiting for a court hearing date. At the hearing, the probate court will appoint someone to manage your personal health care decisions and your financial decisions. Also, the person being "conserved" must have an attorney appointed to represent them if they cannot communicate and hire one for themselves ($$$$). The person seeking appointment as the conservator usually must hire their own attorney. The process can easily be challenged in court by other family members. When the court finally appoints a conservator, EVERYTHING they do for the person they are helping must be approved by judge and a yearly accounting is required. This cumbersome process can easily be avoided with the preparation of a proper estate plan.
Aging and Disability:
Long Term Care Costs
The only time to plan is now!
Over 50% of Americans will require care in a skilled nursing facility before they die. The average stay in the nursing home for individuals age 65 and older is 2 years. In California, the average private pay rate for a stay in a nursing home is currently $9,337 per month (March 2020) and every year that cost increases! If you are diagnosed with a physical or mental condition that will require care in a nursing home and have an inadequate estate plan, you could lose everything. The biggest threat to your family and estate is the high costs of Long Term Care.
The Estate Plan that I provide will give your family the tools they need to properly prepare for paying the costs of a stay in a nursing home. It will prevent the State from putting a lien on your home. It will protect your children from unjust accusations of elder abuse, identity theft, and fraud. Your children who are trying to help you will need your written permission to help you to avoid these accusations. The costs of preparing a plan are nothing compared to the costs of failing to plan.