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Sacramento CA Estate Planning Blog

Sunday, July 8, 2012

Five Little-Known Facts About Veterans' Benefits

There are benefit programs ("Aid and Attendance") through the Department of Veterans Affairs (the VA) that can help wartime veterans and their spouses pay for care, including assisted living, memory care and nursing homes. Here are some little-known facts about these benefits:

1. The veteran does not need to have been involved in actual combat, only to have served during a period considered wartime. Wartime dates can be viewed here:  Periods of War for VA Benefits Eligibility

2. The approval process for VA benefits usually takes five to six months, but it pays retroactively. That means if an application takes six months to be approved, the first award includes a lump-sum payment for the six months that the application was pending.

3. Applicants 70 and over can request that the review process be expedited.

4. Those who intend to apply but don't have all necessary documents ready can submit a one-page form (VA Form 21-4138) to get the process started. Retroactive benefits will then be based on the date that this "intent to apply" form was received, rather than the date the final documents are submitted.

5. There are maximum allowable incomes for VA benefit applicants, but medical and personal care expenses can be deducted from applicants overall income to calculate "countable income." Even applicants with above-average incomes may be eligible when medical and care expenses become high.

The maximum benefit payable to the veteran or veteran's spouse is about $1950 per month.  The benefit is paid directly to the veteran or spouse, and not to the nursing home or care provider.  

Veteran's Aid and Attendance is different that Medi-Cal (Medicaid in other states) in that it does not require that you impoverish yourself before qualifying.  As soon as your out-of--pocket medical bills (including nursing home or in-come care) exceed your gross income, you are qualified.

If you have questions about Veterans Benefits, planning for long-term care, or general estate planning, please call us at (916) 729-1307, or email info@sacramentoestateplans.com.

 


Sunday, July 1, 2012

Beware of "Simple" Estate Plans

“I just need a simple will.”  It’s a phrase estate planning attorneys hear practically every other day.   From the client’s perspective, there’s no reason to do anything complicated, especially if it might lead to higher legal fees.  Unfortunately, what may appear to be a “simple” estate is all too often rife with complications that, if not addressed during the planning process, can create a nightmare for you and your heirs at some point in the future.   Such complications may include:

Probate - Probate is the court process whereby property is transferred after death to individuals named in a will or specified by law if there is no will. Probate can be expensive, public and time consuming.  A revocable living trust is a great alternative that allows your estate to be managed more efficiently, at a lower cost and with more privacy than probating a will.  A living trust can be more expensive to establish, but will avoid a complex probate proceeding. Even in states where probate is relatively simple, you may wish to set up a living trust to hold out of state property or for other reasons.

Minor Children - If you have minor children, you not only need to nominate a guardian, but you also need to set up a trust to hold property for those children. If both parents pass away, and the child does not have a trust, the child’s inheritance could be held by the court until he or she turns 18, at which time the entire inheritance may be given to the child. By setting up a trust, which doesn’t have to come into existence until you pass away, you are ensuring that any money left to your child can be used for educational and living expenses and can be administered by someone you trust.  You can also protect the inheritance you leave your beneficiaries from a future divorce as well as creditors.

Second Marriages - Couples in which one or both of the spouses have children from a prior relationship should carefully consider whether a “simple” will is adequate. All too often, spouses execute simple wills in which they leave everything to each other, and then divide the property among their children. After the first spouse passes away, the second spouse inherits everything. That spouse may later get remarried and leave everything he or she received to the new spouse or to his or her own children, thereby depriving the former spouse’s children of any inheritance.  Couples in such situations should establish a special marital trust to ensure children of both spouses will be provided for.

Taxes - Although in 2011 and 2012, federal estate taxes only apply to estates over $5 million for individuals and $10 million for couples, that doesn’t mean that anyone with an estate under that amount should forget about tax planning. Many states still impose a state estate tax that should be planned around. Also, in 2013 the estate tax laws are slated to change, possibly with a much lower exemption amount.

Incapacity Planning – Estate planning is not only about death planning.  What happens if you become disabled?  You need to have proper documents to enable someone you trust to manage your affairs if you become incapacitated.  There are a myriad of options that you need to be aware of when authorizing someone to make decisions on your behalf, whether for your medical care or your financial affairs.  If you don’t establish these important documents while you have capacity, your loved ones may have to go through an expensive and time-consuming guardianship or conservatorship proceeding to petition a judge to allow him or her to make decisions on your behalf.  

By failing to properly address potential obstacles, over the long term, a “simple” will can turn out to be incredibly costly.   An experienced estate planning attorney can provide valuable insight and offer effective mechanisms to ensure your wishes are carried out in the most efficient manner possible while providing protection and comfort for you and your loved ones for years to come.

 


Monday, June 25, 2012

Your Statutory Right to Name a Guardian for Your Children

California gives parents the statutory right to name a guardian for their children.  If no guardian is named in your will or other estate planning documnts, and tragedy strikes, it will be up to the Court to decide who will raise your children.  The Court may appoint someone that you would not have chosen yourself.

This issue is especially important when dealing with international families, i.e., parents who are non-citizens of the United States, or who hold dual citizenships, or whose closest family members do not live in the United States.  In some states, the Court will not name as guardian a person who is not a citizen of the United States.  

Courts are reluctant to lose jurisdiction over children in their courtrooms because they want to ensure their safety and care.  This may be a problem if you wish your children to return to their/your country of origin.  If your child is a citizen of the United States, but not a citizen of your country of origin, a court may be reluctant to grant guardianship to someone who will remove the child from the United States.  

Even if your child is a U.S. citizen, you should apply on behalf of your child for dual citizenship in your home country.  This will indicate your wish that your child have a connection to your home country.  If you wish that your child live in the U.S., but you name a non-citizen guardian, it is highly unlikely that the non-citizen guardian will be permitted to remain in the United States on this basis alone.  Parents should name a legal resident of the United States, or a person who would could emigrate or other reasons other than the guardianship of your children.

 


Monday, June 4, 2012

Advance Directives or Living Wills: Essential Documents for Everyone

Do I Really Need Advance Directives for Health Care?

Many people are confused by advance directives. They are unsure what type of directives are out there, and whether they even need directives at all, especially if they are young. There are several types of advance directives. One is a living will, which communicates what type of life support and medical treatments, such as ventilators or a feeding tube, you wish to receive. Another type is called a health care power of attorney. In a health care power of attorney, you give someone the power to make health care decisions for you in the event are unable to do so for yourself. A third type of advance directive for health care is a do not resuscitate order. A DNR order is a request that you not receive CPR if your heart stops beating or you stop breathing. Depending on the laws in your state, the health care form you execute could include all three types of health care directives, or you may do each individually.

If you are 18 or over, it’s time to establish your health care directives. Although no one thinks they will be in a medical situation requiring a directive at such a young age, it happens every day in the United States. People of all ages are involved in tragic accidents that couldn’t be foreseen and could result in life support being used. If you plan in advance, you can make sure you receive the type of medical care you wish, and you can avoid a lot of heartache to your family, who may be forced to guess what you would want done.

Many people do not want to do health care directives because they may believe some of the common misperceptions that exist about them. People are often frightened to name someone to make health care decisions for them, because they fear they will give up the right to make decisions for themselves. However, an individual always has the right, if he or she is competent, to revoke the directive or make his or her own decisions.  Some also fear they will not be treated if they have a health care directive. This is also a common myth – the directive simply informs caregivers of the person you designate to make health care decisions and the type of treatment you’d like to receive in various situations.  Planning ahead can ensure that your treatment preferences are carried out while providing some peace of mind to your loved ones who are in a position to direct them.

Please contact us:  Sacramento Estate Planning Attorney Joan Medeiros (916) 729-1307 to get started on Advance Directives for you and your family.

 


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