When your elderly parents need more help than an in-home caregiver can provide, A Place for Mom recommends taking these six steps to learn about assisted living before committing to relocating your parents. If you are unsure if your parents need help, check for any of these eighteen signs that indicate it is time to intervene for their benefit and safety.

1. Have a Conversation With Your Family.

Where applicable, include all siblings in the first discussion no matter how far away they may live. If you are the driving force behind calling the meeting, be clear about your capacity to participate and provide care.

If you are already your parent’s caregiver, be honest about how challenging the job is and remind them you cannot perform the duties indefinitely without support. Work at the outset to settle any disagreements. Securing family members’ support is key to providing a smooth transition and reducing your workload. Your siblings may surprise you with input or solutions you may not have imagined.

If your parents are unwilling to listen to your proposed shift in their care, find a quiet moment when you can relay your feelings, observations, and concerns. Though your parents may be in denial, you must listen to them and document their apprehensions as well as their preferences. If they remain unmoved, perhaps employ the services of a professional mediator who can provide all involved a voice in a safe and constructive environment.

2. Understand What Assisted Living Can Do to Help.

Big life changes can bring about significant stress, particularly with the elderly, who tend to be resistant to change. You can evaluate your parents’ needs with an assessment of their activities of daily living (ADLs). Recognize that assisted living encompasses far more than many people realize, although it is not as involved as memory care or nursing homes. Please do some research to understand what assisted living offers and match it to your parents’ requirements. And while healthy skepticism is reasonable, don’t forget to consider the potential benefits assisted living offers. Finally, speak to a local senior living advisor who has expertise in senior care. A Place for Mom offers free advisor services providing personalized advice and recommendations.

3. Make a Plan to Cover Costs for Your Parents’ Care.

Cost may be the most significant determining factor when looking for senior living options. Assess what your family can afford monthly and seek out assisted living communities that match your budget. If you are fortunate, your parents may have savings or long-term care insurance that will help defray the costs. Many families must explore other avenues.

Speak candidly to your parents about their finances. The most successful transition plans are born from open, honest dialogue about the critical factors in their move. Assisted senior living can be costly, so bring everything into the open to reduce stress and avoid surprises. Help your parents to understand the prices and costs of assisted living communities. Understand options for care payment, whether private funding or health care insurance, Medicare, or VA benefits.

4. Virtual Tour or Pay a Visit to a Senior Living Community.

Nothing can replace a trip through an assisted living community. It is better than brochures, photos, reviews, and floor plans. Tour a minimum of three communities that make your short-list. Try to schedule time for your parents to tour as well. Mealtimes can be an excellent time to tour as you can gauge residents’ satisfaction and interaction and the onsite staff. Print out this Community Touring Notes checklist for easy comparison.

5. Consult Several Varied Sources to Determine the Best Assisted Living Community.

Talk to as many people as you know to learn from their experiences. Relying on a narrow range of information can lead to bad outcomes. Read senior living community reviews. Learn about your parents’ state regulatory environment, background check requirements, and appropriate agency licensing. Please take advantage of federal programs and speak to the long-term care ombudsman. Their job is to resolve issues related to safety, health, and residents’ rights in senior living communities. Setting up a meeting with an elder law attorney as new resident contracts in assisted living communities can be confusing. Understanding the scope of an assisted living community contract is crucial to identifying what is provided and avoiding unforeseen or hidden costs. An elder law attorney is best for this contract review as they will typically aspire to higher levels of professional conduct as they serve a vulnerable population.

6. Prepare Your Parents for the Transition to Senior Living.

Once discussions with your parents are underway, do not delay the move. The more time your parents have to mull things over, the more uneasy they can become about the unknown. Become action-oriented and help them to downsize by consolidating their possessions. Plan and coordinate the move carefully to minimize stress levels for all involved. Senior move managers know what to expect and can help your move run smoothly. Be sure to gather and manage your parents’ legal, medical, financial, and other essential documents to ensure they are not misplaced or lost during the move.

Being compassionate to your parents is vital during this life transition. Involving all family members in a constructive dialogue to create a positive approach to the move is critical. Some parents may make a move with relative ease, while other parents may present more challenges. For the best possible experience, follow these six steps to help your parents move to an assisted living community.

If you or your parents would like to discuss options for paying for long-term care, we would be happy to help. We help families plan for the possibility of high long-term care costs and to understand payment options available, like Medicaid or programs offered by the Veterans Administration. It’s important to understand these options to avoid running out of money while paying for long-term care. We can also help by reviewing facility contracts when admitting a loved one to assisted living or a nursing home.

We hope you found this article helpful. If you have questions or would like to discuss a personal legal matter, please contact us today at (408) 371-6000 to schedule a free consultation.

Can You Skip Probate Altogether?

Revocable Living Trusts (RLT) avoids probate proceedings and allows assets to transmit to beneficiaries faster. The assets in the trust bypass the probate court and usually take precedence over any property you designate in your will. A clear determining indicator of the need for probate is the value of the decedent’s property. If the valuation is less than $100,000, the assets qualify for a simplified procedure in most states. As one example, to act without court intervention for settlement in a simplified procedure:

• The estate will have adequate assets to pay taxes and debts
• If there is a will, the executor petitions the court
• Without a will, the surviving spouse petitions the courts if the estate has community property and the decedent has no children or grandchildren from a prior relationship
• The court determines bypassing probate would be in the best interests of creditors and beneficiaries, and the executor is not a creditor

This small estate affidavit procedure is helpful if the probate asset valuations, excluding any property interest to surviving spouses or domestic partner’s community, minus liens, and encumbrances, is no more than $100,000. In the absence of a will, the probate process must ensue, and the distribution of whatever assets may exist do so under the state intestacy law. There are ways to avoid probate even with a sizeable estate through careful planning. Probate avoidance not only will reduce legal fees in the long run, but it can mean avoiding estate tax, which can be significant in a very wealthy estate.

Can Assets Be Passed Outside of Probate?

Aside from an RLT, life insurance policies pass outside of probate. POD accounts (payable on death) can pass to your beneficiary without probate for your checking and savings accounts, money markets, CDs, and US Savings bonds; however, each account will require a complete beneficiary registration. Retirement accounts such as a 401(k) or IRA also pass to an adequately designated beneficiary outside the probate court.

Most pensions that are inheritable are under a form of trust and, as such, will also maintain their valuation outside of the probate process. In military benefits, a death gratuity, a lump sum payment to survivors made by the US Department of Defense, is $100,000 and is tax-exempt. If there is real estate as joint tenant ownership, the property will pass outside of probate as well.

What Happens if a Revocable Living Trust Is Not Established?

In the absence of an RLT, using named beneficiaries in POD accounts and retirement accounts, or the probate process, there is almost no way to own inheritable property legally. A quasi exception exists in Florida, where a family may own property in a decedent’s name if they do not sell it and continue paying taxes. Each state has differentiation in inheritance laws, so it is essential to retain an elder law attorney for the state where you live.

Most families will contact the probate court whether or not the bulk of the estate will pass through the probate process. The will executor must file a request for probate in the county where the decedent was living and provide a death certificate. At this time, the probate court likely approves the executor named or designates one and provides letters of testamentary which legally permits the findings and processing of the decedent’s financial and other property accounts. To get specific answers to your estate questions regarding passing your probate and non-probate assets to your heirs, speak with an estate planning attorney. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

The first order of business is to plan the finances so the parents can enjoy a comfortable standard of living in their later years. They may need long-term care in the future, so they should consult an elder-law attorney about how to plan most effectively. If they don’t plan, they could lose the farm later to a lien, to reimburse the government if they end up needing Medicaid assistance.

Elder law attorneys can also advise about how to avoid problems if a parent re-marries after the first one passes. There’s no telling what can happen to the family property when one spouse is left lonely and finds someone else. Sometimes the results are terrible for family harmony.

Next, it’s necessary to allocate the value of the farm among all the children, so that each child is accounted for once the parents pass. This is by no means an easy process. For a transition plan to be successful, a great deal of planning, preparation, and communication is needed.

Here, it’s best to do some research. There are a host of useful publications that can guide the exploration. Kansas State University provides a twelve-step analysis of questions to be answered.

Farm Bureau Financial Services offers several detailed guides covering various aspects of the planning process.

The Beginning Farmers website is loaded with links to farm-succession courses, blogs, toolkits, farm management advice, and cooperative extension assistance in various states.

For real-life success stories, consult the Successful Farming website, here and here.

When you’re ready to start planning for your farm and other valuable property, we’ll be ready to help. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

Yes. Come into the office, and we will have you sign a “Certification of Validity.” You will swear under oath that your uncle is still alive; you know he intends the 2002 document to still be good, you know he has never revoked it, and no other events have intervened to make the old power of attorney invalid. That should work to get you the authority your uncle wanted you to have.

Keep in mind that you have run into this problem because institutions like banks and insurance companies, and healthcare providers too, take very seriously their duty to transact business with only those people who are specifically authorized. When, as in your situation, that person is you and not your uncle, they often prefer to take the “better safe than sorry” approach and refuse you. After all, they, like most people, are not lawyers!

Still, this problem can be encountered frequently, so some states have stepped in to help. Some have enacted a specific law, recommended nationally by what’s called the “Uniform Power of Attorney Act,” that permits the use of certificates of validation to encourage acceptance of powers of attorney in situations like yours. This kind of validation can also be permitted, or even required, of agents by banks and insurance companies.

Of course, you don’t need to tell your uncle this right now, but when he recovers, please remind him that he, too, should come in for a thorough review of his estate plan. This experience you’re having shows how important it is to keep those documents current.

The rule of thumb is that an attorney should review estate plans and powers of attorney for any significant life change like illness or divorce. Even if none of those things have happened (yet), it’s wise to come in for a “check-up” every five years. Avoid depending on the validation certificate, so the plan will work for you when you need it most. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

The National Science Foundation has provided a one million dollar grant to Brown University and Hasbro Inc. to develop furry animatronic cats and dogs coupled with artificial intelligence to assist seniors in their daily lives. The project’s team is tasked with designing a smart companion within three years that is capable of helping older people with the simple yet sometimes challenging tasks of everyday life. The project is called ARIES (Affordable Robotic Intelligence for Elderly Support), and in addition to providing support for daily tasks, the smart companions will also provide comfort and joy for older adults, particularly those with mild dementia problems.

Some of the goals of the ARIES project include sensor systems that allow the smart companion to identify and track important objects in day-to-day living such as keys, glasses, pillboxes, and can also remind the individual of essential tasks and events and even enhance their safety. Communication between the smart companion and the senior will be fully developed so that gestures such as a nudge, or a purr can guide the user toward a misplaced object or be a reminder that it is time to take medications. The current animatronic model of cat or dog retails for a reasonable 100 dollars, but when artificial intelligence is added into the product, the costs can skyrocket to five or six thousand dollars. As with all technology over time the market for smart companions will become more competitive and thus more affordable. Beyond task-driven assistance, these smart companions provide some stress relief and companionship to the senior reducing the problems of social isolation and loneliness.

The startup Intuition Robotics Ltd. has more than twenty million dollars in venture capital funding of which Toyota AI ventures is a major investor and has launched ELLI.Q, an “aging companion.” This artificial intelligence elder care robot uses machine learning and vision enabling ELLI.Q to make suggestions to its senior friend, recommending entertainment and activities in addition to monitoring the overall wellness of the senior in their environment. ELLI.Q is a more robust system than the currently available “Okay Google” Assistant or Apple’s “Siri” as it has the added benefit of vision and capability to tailor information to the needs and schedule of the senior it supports.

There are many other examples of corporate research and development into the applications of artificial intelligence to benefit the aging population. As these systems become more prevalent in senior care, ethical questions will have to be addressed as well as technological ones. For instance, if an elderly care robot is reminding their senior to take their medication and yet the senior refuses to comply with the instruction, what happens next? Without a system to contact a human nurse counterpart, the patient could merely ignore the reminder. What if the patient has dementia and immediately forgets what they were instructed to do? Will the smart companion have redundancies to address this or will that feature make a senior confused and take their medication twice? What would happen in the scenario if a diabetic patient is told not to have a high sugar content food but they ignore the warning? Will there ever be a time when a remote caregiver uses an automated robot to restrain an older adult? What are the moral and legal precedents for this type of artificial intelligence/robotic interaction and what happens if someone is hurt because of it?

The future of artificial intelligence application in senior care is intriguing but practical applications are currently limited. While the basic capabilities for in-home companion products are functional, provide oversight, and are ready for the marketplace, the more complex artificial intelligence smart systems are still in development. The increasing aged population will continue to drive the necessity for these smart systems.

If you have questions about anything you’ve read or would like to make an appointment to discuss planning needs for you or a loved one, please don’t hesitate to reach out. Please contact us today at (408) 371-6000 to schedule a free consultation.

How would you answer the following questions:

• Do you have a will, and has it been updated in the last five years?
• Are your assets protected in the event you require home care or nursing home care?
• Do you have a living will, including a health care proxy and durable power of attorney?
• Is your home protected, perhaps in a trust?
• Are you willing to spend half or even all of your assets on the cost of your elder care?

If your answers are no to any of these questions, it is time to consult with an elder law attorney.

The Importance of Medicaid Planning With an Elder Law Attorney

As you age, early planning is the key to enjoy a successful, secure, and less stressful lifestyle. Currently, the look-back period for Medicaid nursing home benefit qualifications is five years, and it is 2.5 years for Medicaid home care benefits. Early planning can protect many of your assets and still secure eligibility for government benefits.

The truth is, regardless of your age or wealth, you should have an estate plan. Your will sets forth instructions regarding which heirs will receive your property upon your death, name a guardian(s) for minor children, and protect assets in a special needs trust benefiting any disabled loved ones. An estate plan will tackle tax planning, power of attorney, health care proxy, and a living will in the event of unforeseen incapacity.

Engaging in Medicaid planning and asset protection can ensure you or your loved one will receive the care they need and afford it. Medicaid planning can protect a healthy spouse who wishes to remain in your home with the financial resources to do so. Proper planning for Medicaid benefits can protect your assets from Medicaid’s estate recovery program, genuine estate liens.

How an Elder Care Attorney Can Help You or a Loved One?

Hiring an experienced elder care attorney can be the most significant financial safeguard a person can make for their life or the life of a loved one. Specific services of an elder care attorney include but are not limited to:

• Planning and managing of long-term care services – Your elder law attorney will compile financial information, insurance, and assets, including medical and housing needs, in addition to evaluating and implementing estate planning. Geriatric care, veterans benefits, financial and tax planning, and preparation are part of the process.
• Planning and qualifying for Medicaid eligibility – Elder law attorneys understand the differences between Medicare and Medicaid. They can show how income levels and current asset holdings may affect your future benefits.
• Guardianships and conservatorships – In this process, a judge will appoint a person to manage another’s financial affairs known as a guardian, particularly for those who can no longer care for themselves or have Alzheimer’s or other forms of dementia. Elder law attorneys can guide a family through the process of obtaining guardianship for their loved one’s benefit.
• Administration of the estate, probate and trust(s) – This service benefits the estate holder and the designated trustees or executors. An elder law attorney can outline the rights and responsibilities of those with fiduciary appointments.
• Estate and disability planning and preparedness – Many seniors have questions regarding the impact of their will on their family and other tax and legal issues. Your elder law attorney can explain these impacts and help guide choices that ensure your legacy and benefit your heirs.

A well-crafted estate plan is invaluable to you and your beneficiaries. Your elder law attorney will help guide you through the estate plan process, customizing it to meet your needs, and prepare the legal documents reflecting the laws of your state. Early proactive planning will yield the best results to protect your assets and your well-being. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

Can You Skip Probate Altogether?

Revocable Living Trusts (RLT) avoids probate proceedings and allows assets to transmit to beneficiaries faster. The assets in the trust bypass the probate court and usually take precedence over any property you designate in your will. A clear determining indicator of the need for probate is the value of the decedent’s property. If the valuation is less than $100,000, the assets qualify for a simplified procedure in most states. As one example, to act without court intervention for settlement in a simplified procedure:

• The estate will have adequate assets to pay taxes and debts
• If there is a will, the executor petitions the court
• Without a will, the surviving spouse petitions the courts if the estate has community property and the decedent has no children or grandchildren from a prior relationship
• The court determines bypassing probate would be in the best interests of creditors and beneficiaries, and the executor is not a creditor

This small estate affidavit procedure is helpful if the probate asset valuations, excluding any property interest to surviving spouses or domestic partner’s community, minus liens, and encumbrances, is no more than $100,000. In the absence of a will, the probate process must ensue, and the distribution of whatever assets may exist do so under the state intestacy law. There are ways to avoid probate even with a sizeable estate through careful planning. Probate avoidance not only will reduce legal fees in the long run, but it can mean avoiding estate tax, which can be significant in a very wealthy estate.

Can Assets Be Passed Outside of Probate?

Aside from an RLT, life insurance policies pass outside of probate. POD accounts (payable on death) can pass to your beneficiary without probate for your checking and savings accounts, money markets, CDs, and US Savings bonds; however, each account will require a complete beneficiary registration. Retirement accounts such as a 401(k) or IRA also pass to an adequately designated beneficiary outside the probate court.

Most pensions that are inheritable are under a form of trust and, as such, will also maintain their valuation outside of the probate process. In military benefits, a death gratuity, a lump sum payment to survivors made by the US Department of Defense, is $100,000 and is tax-exempt. If there is real estate as joint tenant ownership, the property will pass outside of probate as well.

What Happens if a Revocable Living Trust Is Not Established?

In the absence of an RLT, using named beneficiaries in POD accounts and retirement accounts, or the probate process, there is almost no way to own inheritable property legally. A quasi exception exists in Florida, where a family may own property in a decedent’s name if they do not sell it and continue paying taxes. Each state has differentiation in inheritance laws, so it is essential to retain an elder law attorney for the state where you live.

Most families will contact the probate court whether or not the bulk of the estate will pass through the probate process. The will executor must file a request for probate in the county where the decedent was living and provide a death certificate. At this time, the probate court likely approves the executor named or designates one and provides letters of testamentary which legally permits the findings and processing of the decedent’s financial and other property accounts. To get specific answers to your estate questions regarding passing your probate and non-probate assets to your heirs, speak with an estate planning attorney. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

Ginny and George should consult their elder law attorney. She could help them create trusts designed to leave their property to their children and descendants. The trust could also require that if either spouse were to remarry, the second spouse must sign a prenuptial agreement. In that agreement, either spouse would promise to keep Ginny’s and George’s property separate.

The prenuptial agreement would have to be carefully drafted, to make sure it was fair to both remarried partners. But the advantages would be important. First, the prenup could protect Ginny’s and George’s children from losing their inheritance to a new partner or step-siblings. Second, the prenup would require each second-marriage spouse to create comprehensive powers of attorney, to avoid guardianship proceedings if either spouse become incapacitated. Third, the prenup would require both spouses to make sure that any new estate plans would not disturb the provisions of Ginny’s and George’s existing trusts.

A prenup should also consider the possibility that second spouses might someday become ill or incapacitated and might need Medicaid assistance to pay for nursing home or long-term care. The government can disregard prenups and, regardless of what the prenup says, can count some income and assets against both spouses. The well spouse might have to pay for some nursing home costs incurred by the ill second spouse. Ginny’s and George’s estate might also have to be spent on the second spouse’s medical expenses. These are heavy costs that could drain most or all of the inheritance Ginny and George had set aside for their children. An attorney well-versed in elder law knows how to protect that inheritance to a significant extent.

Do-it-yourself prenups are not the way to go. These contain none of the provisions needed to plan for Medicaid. They also might not work in community property states where creditors have considerable power to access the property of one spouse to pay the other’s debt.

Are you thinking of a second marriage? Please give us a call to discuss your options. Remember: A prenup is not just for Hollywood divorces.

Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

A personal property memorandum is designed to cover who should receive items owned that don’t have an official title record. Personal property includes furniture, jewelry, art, and other collections, as well as household items like china and silverware. Personal property memoranda may not include real estate or business interests, money and bank accounts, stocks or bonds, copyrights, and IOUs.

When writing your memorandum, it is best to keep things simple. Personal property memoranda generally resemble a list of items with the attached names of the inheritors. It can be handwritten or typed but should always be signed and dated.

All items should contain sufficient detail so that argument and confusion can be avoided. Complete contact information including address, phone, email, and a backup contact if possible should be included. Do not include items that you have already explicitly left in your will or trust.

The beauty of a separate list of personal items and their planned distribution is that if you later decide to change who receives what, you simply update your current list, or replace the list altogether. You can destroy an old record or maintain signature and dates on each of your personal property memoranda so that it is easy to identify your most current set of wishes.

A personal property memorandum for your tangible personal effects is a simple way to address how you want your personal property to be distributed. We would be happy to help you create a legal personal property memorandum along with any other estate planning documents you may need. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

One of the most common mistakes a parent or loved one makes is disinheriting their family member with special needs. The reason is often that the family believes other siblings will step in and take care of the disabled family member. However, this can lead to numerous problems, especially if the non-disabled sibling gets sued, divorced, or otherwise loses the money left to them.

Another common mistake is failing to create a properly drafted trust to qualify the disabled family member for government benefits that can help pay for costly medical and/or living expenses. Qualifications for government benefits like Supplemental Security Income (SSI) or Medicaid dictate that the disabled individual has no more than $2,000 in assets. If your disabled loved one has assets above this threshold, they will have to be “spent down” to qualify for government assistance or otherwise protected in a properly drafted trust.

Well-meaning friends and extended family may not understand the complexity of disability benefits and give a disabled loved one money or assets that would disqualify them for state and federal benefits. It is especially difficult if the disabled person already has benefits and becomes disqualified because the “needs-based” review discovered additional funding putting them over the $2,000 asset limit. It is best to avoid this situation as it is a big hassle to re-qualify your dependent for government assistance.

Be wary of crowdfunding sites like GoFundMe to benefit your loved one with special needs. In the absence of qualified legal planning, these donations can disqualify SSI, Medicaid, food stamps, and section 8 housing. A well-meaning fund campaign could cut the benefits of a disabled person and make their living circumstances worse than before.

What to do? Plan ahead! There are several ways to provide for your special needs dependent and stay within government guidelines for additional benefits. One of the best ways is to establish a special needs trust that has the specific purpose of supplementing federal and state assistance programs. By doing so, a disabled loved one can benefit from government programs and have additional money to supplement what those programs provide.

There are strict rules when it comes to creating special needs trusts for a disabled family member. There are also restrictions on what the money can be used for. We can help you determine what type of trust is best based on you and your loved one’s particular circumstances. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

To over-simplify it, an estate plan is a more comprehensive way than a will to instruct how your estate is to be distributed after your death, and how your assets should be managed if you become disabled and unable to make financial or health care decisions. Estate plans can save you and your successor substantial amounts of money in court costs, legal fees, and taxes. Consider the following items when creating an estate plan:

Do you have/are you expecting children/grandchildren? This is one of the most important factors to consider when creating an estate plan. Beyond appointing a guardian to take care of minor children, you may also need to appoint a conservator who will manage the assets your successor(s) will inherit when they reach the age of majority.

You may have assets that already contain a beneficiary designation such as a transfer on death (TOD) account. If not, then your will may be used to instruct who will receive such assets.

Minimize probate and maximize privacy. An estate plan that uses a living trust will allow your heirs to move through the administration process as quickly and efficiently as possible. With only a will, a process called probate must be used at your death. Information brought forward in probate court is public knowledge and all of the terms of your will plus the assets you own will become part of the public record. Also, probate can be very expensive. Even an uncontested probate could take longer than a year to pass through probate court and attorney’s fees and court costs can start to add up. Constructing an estate plan with an attorney before probate can help avoid most of these costs and loss of privacy.

Consider your digital information. One thing that’s often forgotten, but necessary in today’s digital age, is what happens to your online information after you die? Many of our day-to-day activities are conducted online and this may present issues for your family after you die. For example, if you invest or bank online, it can be an incredible hassle for your heirs to decode your online financial life. Consider storing your passwords in a safe place and then give access through a power of attorney to someone you trust who will be able to help your family manage your online footprint. An estate planning attorney will be able to sit down with you and go through your online accounts and help you decide which ones will need attention in the event of your death or disability.

Location and size of your estate. The Tax Cuts and Jobs Act of 2017 doubled the size of the federal estate tax exemption to $11.2 million for a married couple. That means unless your estate is larger than $11.2 million, you may be exempt from paying federal taxes on it. However, depending on where you live you may be subject to state-level estate taxes. There are currently 17 states, and the District of Columbia, that impose some sort of estate or inheritance tax.

There are many other factors to consider when constructing an estate plan, some of which can be complicated. Please do not hesitate to reach out to our office if you wish to meet with an estate planning attorney to discuss how best to protect your legacy. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss your legal matters.

Can You Have Medicare and Private Insurance?

People may have Medicare and other insurance simultaneously for several reasons.

• Some Medicare enrollees have retiree health coverage through their (or a spouse’s) former employer.
• Others remain in the workforce past 65 and are on employer-backed insurance or are enrolled in their working spouses’ insurance.
• Younger people with disabilities can receive Medicare coverage while also on their employer’s insurance.
• Active and retired service members and their families can get health coverage through Tricare while also enrolled in Medicare.
• Qualifying individuals with limited income and resources can obtain Medicare and Medicaid coverage at the same time. This is called being dually eligible.

Allocating Coverage

People with more than one insurance provider may receive more coverage, as the providers allocate costs. Depending on the situation, Medicare might be the primary payer, or the other insurance provider may act as the principal insurer. Once the primary payer has covered the maximum amount, the secondary payer contributes to the remaining costs. Each insurance source will determine what and how much coverage it provides for services and treatments.

Though the coverage can be greater with multiple providers, you may be responsible for outstanding fees that neither program fully includes.

For those with two insurance providers, the “Medicare & You” handbook as well as the guide to “Who Pays First” (both in PDF format) explain the protocol that determines which provider is the primary payer.

In general, Medicare pays first when people have retiree health coverage or receive coverage from a smaller organization. An employer’s coverage typically takes precedence when it originates from current employment at a larger organization.

• Covering costs first, Medicare is the primary insurance for those who also have retiree health coverage.
• Medicare is also the first insurer for older adults with current employer health coverage when the company has less than 20 employees.
• It is also the primary payer for younger people with disabilities with current employer coverage from establishments with fewer than 100 workers.

In other instances, Medicare is the secondary payer.

• The employer’s insurance pays first for those who receive insurance because they or their spouse currently works at a larger business (more than 20 employees). Then Medicare covers the remaining costs.
• For disabled people with coverage based on their or their family member’s current employment at a larger organization (more than 100 employees), the employer’s insurance is the primary payer.
• Tricare is the primary insurer for individuals on active duty or those receiving care in a military hospital, clinic, or federal health care provider. Others on Tricare get Medicare coverage first.

How Medicare and Medicaid Work Together

Those who qualify for Medicare as well as Medicaid can receive assistance from both programs. When people benefit from both programs, Medicare is the primary payer. If both Medicare and Medicaid cover the same service or treatment, Medicare pays first, and Medicaid contributes to any remaining costs.

Sometimes, Medicaid will pay for expenditures that Medicare does not cover. Medicare Part A bears hospital fees, Part B extends to outpatient medical costs, and Part D applies to prescription drugs. However, Medicare generally does not take care of nursing home expenses, which Medicaid can cover.

Please feel free to reach out to us at (408) 371-6000 or info@SowardsLawFirm.com with any questions or concerns.

Additional Reading

• Should I Enroll in Medicare If I’m Still Working?
• Questions to Ask When Enrolling in Medicare (PDF)

Your level of health care is usually based on:

• Your need for help with two or more activities of daily living, including bathing, toileting, dressing, eating, and mobility.
• Your frequency of medical care for things like IVs or other injections, medications, or other treatments.
• Your behavioral problems such as aggressiveness and wandering from home.
• Your cognitive ability may be impaired by Alzheimer’s disease or another form of dementia, creating problems with making decisions and correctly processing information.

The state evaluates the health of each Medicaid applicant and, in many cases, will require a doctor’s diagnosis. The assessment generally requires the applicant to answer a series of questions about their abilities, behavioral issues, or cognitive problems. They will also ask about family members and their ability to provide physical and financial support.

Understanding Medicaid Basics

Medicaid covers medical services beyond nursing care when you are over 65, blind, or disabled and meet the income eligibility requirements. When applying for Medicaid benefits, consider the following:

• If you are married and both applying for Medicaid, the program combines your assets and income. If only one of you is applying, you can transfer a certain amount of countable assets and income to a trust to protect your spouse’s standard of living from the costs of long-term care and Medicaid Estate Recovery.
• You will still be able to keep a portion of your income, and the amount varies by state. Local Medicaid offices can provide more information, or you can talk to an elder law attorney to understand how much of your income will pay for nursing home care.
• There is a Medicaid look-back period of up to five years in most states. When determining your eligibility, your state will count any assets you have transferred or gifted to others in the past five years. If Medicaid determines any transfers violate eligibility rules, you may be penalized. They may only pay a portion of your nursing home stay or none at all. This is why legal guidance can be extremely important.
• Owning your home affects Medicaid eligibility and coverage. An elder law attorney can explain how the equity in your home may count as an asset. They will present options, such as trusts, to protect your property and keep it for your family after you have passed.

Using Medicaid for Nursing Facility Care at Home

Medicaid is initially designed to help those with low incomes afford the cost of long-term care. If you or a loved one still have some autonomy but are no longer completely independent, you may seek services for in-home care and assisted living facilities. Keep in mind that Medicaid benefits cover costs for skilled nursing or home health care, but not assisted living costs. If you have long-term care insurance and other financial resources, assisted living may still be an option. As independence declines, you will be facing a nursing home facility eventually.

Since nursing homes often have limited capacity, the waitlists can be years. Check out local facilities as soon as possible. In the meantime, Medicaid has adapted to provide nursing home level of care at your residence instead. Medicaid evaluates applicants to ensure they don’t pose a danger to themselves or others in a home environment. You may be able to use this solution until a nursing home facility becomes available.

There are many medical and financial aspects to consider when applying for Medicaid benefits. Filling out applications on your own can lead to rejection due to insufficient or incorrectly filed forms. This can create delays and diminish your estate as assets are used to pay for care. Timing is critical.

Proactive Medicaid Planning

An elder law attorney can help you navigate your state’s eligibility requirements, properly fill out forms and supporting documents, and prepare you for health assessments and reviews. They evaluate your estate, inventory assets, preserve assets for family members, and discuss powers of attorney should you become unable to handle your financial and medical decisions. The more time they have to develop your Medicaid and long-term care strategy, the better the outcome.

The potential need for long-term care in a nursing home is high. Your elder law attorney will help you qualify for care when you need it and achieve your family goals. We hope you found this article helpful. Please contact us today at (408) 371-6000 to schedule a free consultation to discuss Medicaid Planning and long-term nursing home care.

Today, understanding which digital information and accounts you can legally leave to heirs is crucial to protecting your asset values. Laws governing these online assets are changing rapidly; however, legally gaining access to digital assets and encoded financial data can present challenges for anyone other than the original owner.

Four main obstacles will hinder access to a family member’s vital personal data and digital assets:

1. Passwords

Without knowing your passwords, personal representatives and family members may not be able to access your data and property stored on a computer, smartphone, cloud, and online accounts. While experts can easily bypass some passwords, others can be practically impossible, like cryptocurrency.

2. Encryption

Your digitally stored data is often encrypted for an additional layer of protection. Encryption can happen at many levels, from a single file on your device to large amounts of stored information in the cloud. In particular, new smartphone technology may be very difficult to decrypt, so if you have not transferred your data to an external hard drive or USB and shared it with other family members, the digital information may not be accessible.

3. Privacy laws

In general, federal data privacy laws prohibit turning over electronic communications by online account service providers unless you are the owner or have the owner’s legal consent. Therefore, social media sites and digital storage companies may lock down content without legal documentation sharing the circumstances under which trusted friends or family members can access it. Taking a digital service provider to court to retrieve treasured data is generally cost-prohibitive, so lawful consent from the owner is critical.

4. Criminal laws

State and federal laws do not allow unauthorized access to computer systems and private data. These laws protect consumers against identity theft and fraud, but additionally, they create insurmountable obstacles for loved ones to gain access to a decedent’s digital information and assets. If you do not give express permission to your fiduciaries, representatives, or family members in your estate plan, they may never be able to access it.

Ways to Access Digital Assets After a Death

Make a list of your digital assets and include important online accounts (social media, banking, bill pay), passwords, and digital property, including cryptocurrency, money transfer apps, and domain names. Store this list in a secure place and maintain its accuracy. There are free password management apps available to simplify your effort.

Many digital assets you think you own, you may not. For example, we tend to carelessly accept end-user license agreements (EULAs) without understanding that a “purchased” item is a non-transferable license to use but not own the asset.

If you store data in the cloud, it is wise to back it up in another location. Secure online safe deposit boxes or digital vaults tied to your banking institution store identification, legal documents, business contracts, finance, tax, and insurance information. By adding emergency contacts, you allow those individuals to access your documents. After a specific time limit, they will be automatically approved. You may also scan electronic copies of paper records to store on an external hard drive and store in a secure location to keep items updated and permit fiduciary, representative, and family access with fewer obstacles. Relying only on the cloud for backup can create future problems.

Consult with an Estate Planning Attorney

Working with your estate planning attorney, develop legal documents that give consent for online providers to divulge your electronic communication content to legally named individuals. You may want to tailor which people have access to chosen online information rather than a blanket approval.

You may have more digital assets than you think. Aside from social media, banking, and other more common digital assets, remember to include any:

• Digital videos and photos
• Digital rights to theatrical works, motion pictures, musical, and literary compositions
• Blog content
• Income-producing websites and their domain names
• Cryptocurrencies
• Non-fungible tokens (NFTs)
• Online video channels that monetize content and produce advertising revenue
• Online gaming avatars offering services on goods online that may be worth actual money

It has become essential to account for your digital property in your estate plan as online lives are pervasive. Laws regarding digital properties and their inheritable promise continue to evolve. Your estate planning attorney can help you understand which online assets need to be part of your plan and how to permit fiduciaries, representatives, and family access legally. We hope you found this article helpful. If you have questions or would like to discuss a personal legal matter, please contact us today at (408) 371-6000 to schedule a free consultation.

Once probate is underway, the named executor will take the necessary steps to complete probate and notify beneficiaries named in the will. This legal notice typically limits the time when a beneficiary can contest the validity of the will. Generally, a beneficiary (and even a person not named in the will) has thirty to ninety days to bring legal action against the decedent’s will.

Know that the vast majority of wills pass through probate without issue. The courts rightly view the will as the author’s (testator), last voice. Because the testator can no longer speak to their wishes, the courts try to adhere to the legally filed will stringently. Because of the narrow timeline for filing a will contest and the odds stacked against winning the legal challenge, most challengers will find it a fruitless and costly endeavor.

Under what circumstances then would you want to contest a will? Legally, only a person or entity with “standing” can contest a will. Standing is when the party involved in the will contest will be personally affected by the case’s outcome. Most often, this means an heir or beneficiary already named in the decedent’s last will or any preceding will. It may also include any person (usually a spouse or child) not named in the will, but because of state intestacy laws would be eligible to inherit in the absence of a will. Typically, four grounds are viable for contesting a will:

• The will’s signing lacked the proper legal formalities
• The mental capacity of the decedent to make a will is in question
• Someone leveraging undue influence over the decedent into making or changing a will
• The will’s procurement is fraudulent

Certain fact patterns may lead to a successful will contest. As an example, if a testator writes their own will, some legal formalities may be overlooked, rendering the will invalid. In particular, the “do it yourself” method for creating a will may not include all of the “what if” scenarios making the will incomplete. In another example, if the testator is experiencing isolation from family and friends, the primary beneficiary’s influence and motives regarding the estate may come into question. If the executor is trying to enforce an outdated will, the newer one should supersede the older one as long as no coercion was involved in writing the most recent version. Finally, some medical evidence may suggest the testator lacked the requisite mental ability to make a will. Occasionally the challenger to an existing will can negotiate a settlement with the estate instead of enduring a court proceeding.

Some wills include a no-contest clause, also called an “in terrorem” clause. This provision states that if anyone files a lawsuit challenging the will’s validity, they will receive nothing from the estate. While this may a powerful deterrent, it may not be allowed in the state where the will is probated.

To protect your will from being contested, even if you have limited assets, your best strategy is to have your will professionally drafted by an attorney well versed in estate planning. Using an attorney can help protect you and your estate from future legal challenges while helping you think through who you want to inherit your money and property, and how each person should receive what they inherit.

If you would like to discuss whether a will is appropriate for you or whether you should update an existing will, we would be happy to speak to you at your convenience. Please contact us today at (408) 371-6000 to schedule a free consultation.

• Protect against and treat COVID-19
• Prepare for new variants
• Prevent economic and educational shutdowns
• Continue to vaccinate the world

Protect Against and Treat COVID-19

Since January 2021, Americans have had more tools to use to protect against COVID-19. The Biden Administration has worked with states, local governments, and public and private partners to deploy these tools. The most effective tool has been vaccination. People who have been vaccinated and have received a booster shot are forty-one times less likely to die from COVID-19 than unvaccinated people.

The Biden Administration has also expedited the development, manufacturing, and procurement of COVID-19 treatments, such as the one offered by Pfizer. Today, there are millions of courses of Pfizer’s life-saving antiviral pills available. These antiviral pills have been shown to reduce the risk of hospitalization or death by 89%.

The ability for Americans to get tested for COVID-19 has increased dramatically since the early months of the pandemic. There are now thousands of free testing sites across the country, and there are millions of at-home test kits available for free.

The Administration will continue to employ these helpful tools while enhancing them in preparation for new variants and outbreaks. The Centers for Disease Control and Prevention (CDC) will continue to monitor the spread of the coronavirus and adjust its guidelines according to developments.

Prepare for New Variants

While we continue to protect ourselves from COVID-19, we need to prepare for new variants as they come along. To this end, the Biden Administration has developed a comprehensive plan for monitoring the virus, adapting the tools to quickly combat new variants, and deploying emergency resources to help communities.

Since the first days of the Biden Administration in January 2021, the Administration has enhanced data collection, production, and analysis. It has also expanded electronic case reporting to all 50 states, Washington, D.C., Puerto Rico, and thousands of health care facilities. The CDC is now tracking a range of key COVID-19 response metrics, including cases, tests, vaccinations, and hospital admissions in real-time.

The Administration has also built a robust emergency response infrastructure. Headed by the Federal Emergency Management Agency (FEMA) and the U.S. Department of Health and Human Services (HHS), we have capabilities to set up over 100 federal mass vaccination sites and surge testing sites; distribute millions of critical supplies; and deploy thousands of federal clinical and non-clinical personnel to support states, tribes, and territories.

The Biden Administration, in partnership with the CDC, will continue to improve data collection, reporting, and analysis, so America is well informed and ready to respond to new variants.

Prevent Economic and Educational Shutdowns

In early 2021, America was experiencing widespread school and business closures. Only 46% of K-12 schools were open for in-person learning, and millions of businesses had closed, costing tens of millions of Americans their jobs. The Biden Administration has provided schools, childcare providers, and businesses with the necessary tools to open and operate safely.

About 99% of K-12 schools are now open for in-person learning. Since President Biden took office, we have seen historic job growth. The U.S. economy created 6.6 million jobs and grew 5.7% in 2021. Thanks in part to efforts to lessen the effects of the COVID-19 pandemic, the U.S. was the first major economy to exceed its pre-pandemic economic output.

To keep the economy thriving, we need to make sure schools and businesses have the resources and guidance they need to prevent shutdowns.

Continue to Vaccinate the World

Since the pandemic’s effects are being felt around the globe, we need to extend our mitigation efforts beyond our borders. The Biden Administration has committed to donating over 1 billion vaccine doses to other countries. So far, we have donated over 475 million free doses to 112 countries.

In addition to donating vaccines, the U.S. government has delivered life-saving resources, such as oxygen, treatments, PPE, and other essential supplies to countries experiencing outbreaks. U.S. government public health experts are working side-by-side with on-the-ground providers to provide technical assistance in vaccine program implementation, care provision, and outbreak investigation. We have fostered an enabling environment for innovation and have increased the world’s capacity to manufacture vaccines.

The Biden Administration is committed to continuing the successful National COVID-19 Preparedness Plan and using reliable data, tests, vaccines, and treatments to further reduce the spread and severity of the SARS-CoV-2 coronavirus. We hope you found this article helpful. If you have questions or would like to discuss a personal legal matter, please contact us today at (408) 371-6000 to schedule a free consultation.

1: Decide What Services Your Loved One Requires

All home care is not identical. The amount of care your parents require determines the availability and cost of the services. If your parent only needs temporary care a few hours a day, you may need to employ a different provider than if they are recovering from surgery.

Observe your parents’ needs before you commit to paying for a home care plan. Home care services can range from an aide coming into your parents’ home and sitting with them to providing medical services like ensuring that they take their daily medications. You may find this needs assessment worksheet from the National Caregiver Library helpful in assessing the level of care your loved one needs.

The more intensive the services your parents need, the more money the service will cost. If Medicare does not cover your parents, you may end up footing the bill for the service. Make sure the services are within your budget before committing to a home care plan.

2: Do Your Research

It is important to have all the facts about a home care agency before you bring one into your parents’ home. A part of your research should include interviewing different agencies about what services they offer. You should streamline your search based on what services your parents require.

Make sure to ask the agencies you connect with about what they offer or what services they claim as specialties.

3: Get It Paid For

Medicare covers services for patients’ home care needs if the patient meets eligibility criteria. Patients eligible for home care coverage include those meeting the following criteria:

• Patients currently under the care of a doctor
• Patients whose doctor certifies that they are homebound
• Patients in need of physical, speech, or occupational therapy who are under the care of a doctor, have a plan of care that is continually reviewed by a doctor, and require intermittent skilled nursing care

Coverage is for services that are necessary and reasonable to treat an illness or injury, including such services as:

• Physical therapy
• Skilled nursing care
• Certain durable medical equipment
• Medical supplies for in-home care
• Medical social services
• Injectable osteoporosis drugs specifically for women
• Speech therapy

Medicaid, meanwhile, varies by state, and each state may have multiple Medicaid programs. Medicaid State Plans in most states will pay for some form of home care.

Invest in Home Care Today

Having all the facts about possible services is important before you commit. Consider the above steps to ensure that you make the best decision for your family so that your parents are cared for during their golden years.

Please feel free to reach out to Sowards Law Firm with questions or concerns at (408) 371-6000 or info@SowardsLawFirm.com.

For those who wish to maintain their independence and continue living at home as they grow older, taking certain steps to protect their physical, mental, and financial welfare is essential.

What Does It Mean to Age in Place?

The Centers for Disease Control and Prevention defines aging in place as a senior’s “ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level.” According to 2021 data from AARP, more than three-quarters of adults 50 and older say they would prefer to age in place.

Health Considerations for Older Americans Aging in Place

Older adults must consider their physical, emotional, and social well-being when deciding where to spend their later years. They may consider adding supplemental services over time to help improve their quality of life.

To ensure that you will have the support you need for safely aging in place, take the following into consideration:

Resources to Manage Chronic Diseases

Disease management is vital for anyone, especially an older person with a chronic illness. Many older people suffer from at least one chronic illness. If a senior has a chronic disease and wants to age in place, they and their caregivers should focus on:

• Ensuring that spaces in the home are safe and easily accessible to make getting around easier;
• Learning about proper nutrition; and
• Increasing access to dental health services. Research has found that proper oral care can help prevent the progression of many chronic diseases.

Eating Well While Aging at Home

Proper nutrition is a vital part of caring for yourself at home. In facing potential changes to your financial situation after retirement, you may need help buying nutritious meals even after budgeting.

If you find yourself in need of meals, community resources may be available. Neighborhood senior centers, places of worship, and charities may provide a hot meal while you make new friends. If you cannot leave your home, some meal delivery services drop off food at your door for little or no cost.

Support for Mobility

Exercise and maintaining your mobility can increase overall physical and mental health even as you grow older. Seniors aging in place need to be able to move around their homes and neighborhoods safely. Aging in place is a much more realistic goal if you can walk for exercise, access transportation to medical appointments and errands, and maintain a safe environment at home, free from increased fall risks.

If you desire to age in place, consider simple changes you can make to your home to promote your safety. Examples of helpful modifications around the house include handrails, temporary ramps, no-slip bath rugs, and assistive seating.

Mental Health, Substance Abuse, and Memory Care Services

There is an increased need among older adults for mental health, substance abuse, and memory care services. An estimated 20 percent of older adults have a mental health disorder, and the total number of seniors with a mental health or memory care diagnosis is likely to increase over time.

Suggestions for addressing mental health concerns among older people include:

• Focusing on preventative care. Seniors and their caregivers should work with their primary care physician to identify warning signs of depression, anxiety, other mood disorders, and memory care problems. Preventative care can help mitigate the progress of these disorders and improve quality of life.
  
• Looking for common signs of a substance abuse problem. This is an often overlooked area of older adult mental health care. Older adults may turn to substances to deal with unresolved childhood problems or to avoid a feeling of loss of meaning and purpose. Some common signs to watch for include reduced hygiene, unexplained bruises, erratic behavior, and the smell of alcohol on their breath.

If you are a senior’s caregiver and suspect substance abuse, you can find resources and support through the Substance Abuse and Mental Health Services Administration (SAMHSA).

The Need for Social Connection Among Aging Adults

Older adults benefit tremendously from social connections and interaction. People over 65 are likely to live alone, so creating a community outside the home is necessary. Feeling a sense of purpose is beneficial to mental and physical health. For seniors looking to create a sense of community and purpose, they may benefit from such activities as:

• Joining an organization or social club
• Volunteering for a cause close to their hearts
• Learning a new hobby
• Attending a religious institution
• Adopting or fostering a pet
• Using technology to stay in touch with friends and family

Wearables and Smart Monitoring Devices

Technology can help us not only remain connected to one another, but also monitor our health and that of our aging loved ones. Many devices make detailed health information readily available at our fingertips. These devices benefit seniors because they can learn more about their health and make the most of doctor’s visits by communicating effectively about their medical needs.

Examples of wearable health and smart-home monitoring devices include:

• Smartwatches and smartphones, which can track your cardiac health, fitness activity, and sleep patterns
• Medical alert bracelets and personal alert necklaces, which can aid in detecting falls or contacting emergency services when necessary
• Contact sensors and smart locks, devices that can alert caregivers when their loved one living at home leaves a window, garage, or door open, or has forgotten to lock them
• Smart plugs, which can automatically turn on and off lights, space heaters, thermostats, security cameras, and more

Money Management While Aging in Place

Money management can also be an area of concern for seniors and caretakers. Seniors want to make sure they have sufficient financial resources to remain in their homes and communities comfortably, eat well, care for their medical needs, and have fun.

Creating a budget with the help of financial counselors and geriatric care managers can benefit someone on a fixed income. There may even be volunteers in your area that offer a similar service. Being aware of how to prevent and avoid common types of scams that target the senior population is equally as important.

How Can Caregivers Help Seniors Age in Place?

Seniors often choose to age in place to remain independent and avoid becoming a burden to their family. Caregivers can support their goal by teaching them to use technology to communicate and track their health, helping them establish a budget, and setting them up with a routine that may include visiting their doctor, running errands, and making time to socialize.

There is nonmedical support that your loved one will need, too. Caregivers may opt to support their aging loved ones by pitching in with or hiring services for lawn care, cleaning, cooking, laundry, or pet care.

Is Aging in Place Right for You?

Careful planning is the best way to accomplish your goal of staying home as you age. If you are considering plans to age in place and want assistance, elder law planning help is available in your area.

Please feel free to reach out to Sowards Law Firm with questions or concerns at (408) 371-6000 or info@SowardsLawFirm.com.

There are currently nine community property states. They are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A few other states (for example, Alaska) allow couples to opt into community property arrangements.

Community property is property acquired by a spouses during marriage. In community property states, property held in only one spouse’s name can still be community property. For example, the paycheck that a spouse brings home every week is community property even though only one spouse’s name is on the check. If that check is used to buy an asset, then that asset is community property, regardless of whose name is on the account or the asset.

Property that is not community property is property that one spouse brings to the marriage, inherits, or is gifted. A spouse can turn separate property into community property by putting an asset owned by one spouse into both spouses’ names.

Depending on the state, partners may be able to change whether property is separate or community via pre-nuptial agreement, post-nuptial agreement, or exceptions in the law. Changing community property into separate property may be appropriate in second marriages or when one spouse is bringing significant separate property into the marriage. For example, if, at the time of the marriage, one spouse receives significant income from owning a business, the spouses may decide that it is appropriate that the business remain that spouse’s separate property and the income from that property will remain that spouse’s separate property.

One advantage of community property is with regard to capital gains taxes. If one spouse dies, the cost basis of the community property gets “stepped up.” The current value of the property becomes the cost basis. This means that if, for example, the couples’ house was purchased years ago for $150,000 and it is now worth $600,000. The surviving spouse will receive a step up from the original cost basis from $150,000 to $600,000. If the spouse sells the property right away, he or she will not owe any capital gains taxes. In non-community property states, if one spouse dies, only the deceased spouse’s interest (usually 50 percent of the value) is stepped up.

When estate planning in a community property state, it is important to fully review assets to determine which assets are community property and which are separate property. A surviving spouse in a community property state is entitled by law to half of the community property, regardless of what the spouses may have wanted to do with the property (such as pass it on to children). Community property can be a factor even in non-community property states if the couple owns property in a community property state.

If spouses move from one type of state to another, it is especially important that they have their estate plan reviewed by an attorney in the new state to make sure the plan still does what they want.

Please contact us today at (408) 371-6000 to schedule a free consultation to discuss if a community property agreement is right for you and your family.

Unlike a will, a trust will help keep your estate from going through an expensive, time-consuming, and public probate process. If you set up a trust, you still create a will, but it becomes a pour-over will, which moves (pours) your assets into your trust. You can choose from different types of trusts, depending on how and when you want your assets dispersed.

Types of Trusts

There are many types of trusts, but they all establish a financial arrangement between three parties: the trustor(s), the trustee(s), and the beneficiary(ies). The person creating the trust is known as the trustor, grantor, or trustmaker. Trusts can be created by more than one person. The trustor chooses one or more persons or entities to serve as the trustee. The trust is for the benefit of one or more beneficiaries, which can be people or entities, such as charities. For some trusts, the trustor, trustee, and beneficiary are the same person.

The Role of a Trustee

The role of a trustee can vary widely, depending on the nature of the trust, wishes of the trustor, and needs of the beneficiaries. Generally speaking, a trustee manages the trust and the assets it holds and disperses income or principal from the trust in accordance with the terms of the trust. A trustor may grant the trustee broad latitude in distributing assets to the beneficiaries or may impose strict guidelines. For example, a trustee may be allowed to make funds available for the general wellbeing and happiness of the beneficiaries or may only be able to disperse funds for educational purposes.

If the trustor has a beneficiary who has special needs and is receiving benefits from Medicaid, Medicare, or another government program, then the trustee needs to make sure they are dispersing assets without disqualifying the beneficiary from the government program. Some trusts have a special or supplemental needs provision in them, and some are wholly for the person with special needs.

In addition to dispersing the funds of a trust, the trustee also pays any taxes that are owed, records expenses and income, and oversees the physical assets owned by the trust, such as real estate. The trustee may be required to report taxes, expenses, and income to the beneficiaries on a scheduled basis. All these duties will be dictated by the language in the trust.

Choosing a Trustee

In most cases, the trustee of a trust can also be a beneficiary of the trust. One notable example of when a beneficiary cannot be the trustee of their trust is with a special needs trust. For the beneficiary of a special needs trust to qualify for government assistance, they cannot have any control over the assets of their trust or how they are managed and dispersed.

When considering who will be the trustee of your trust, choose a person you can rely on to follow the instructions you lay out in the trust. This person can be a reliable family member or friend, or an entity, such as a bank or trust company. For some trusts, such as a living trust, you can be the initial trustee and select someone else to be the trustee if you become incapacitated or when you die.

More than One Trustee

More than one person can serve as trustee at a time. This can be a good option for when beneficiaries are young. For example, a trustor can allow a young beneficiary to serve as a co-trustee of their trust along with an older trustee until a certain age when the beneficiary can serve as sole trustee.

Choosing the trustee of a trust is an important decision. When you are making this decision, consider the purpose of the trust now and in the future. Consider who will be able to best manage the trust’s assets and the beneficiaries’ needs. An experienced estate planning attorney can help you create the trust, or trusts, that will best suit your needs and select the right trustees.

This article offers a summary of aspects of estate planning law. It is not legal advice, and it does not create an attorney-client relationship. For legal advice, you should contact an attorney. We hope you found this article helpful. If you have questions or would like to discuss a personal legal matter, please contact us today at (408) 371-6000 to schedule a free consultation.