A special needs trust, sometimes referred to as a supplemental needs trust, is a specific type of trust used to provide support for a special needs individual. This exceptional estate planning tool should be considered by anyone who has a child or loved one who qualifies. So what is a supplemental needs trust and why would I want to create one?

• A Special needs trust, or SNT, may be used for an individual who is physically or mentally disabled or who suffers from a chronic or acquired illness.
• A parent, grandparent or guardian may set up an SNT.
• A SNT is intended to provide supplemental care above and beyond that which is provided by government sponsored programs such as Medi-Cal (Medicaid), SSI or public housing.
• A SNT will not disqualify the beneficiary from government assistance programs. A SNT is specifically intended to allow a beneficiary to qualify for these programs while still having access to additional means of financial support.
• Absent an SNT, any funds used to care for the individual could jeopardize his or her eligibility for government assistance programs.
• A SNT will continue to operate after your child reaches adulthood.
• A SNT will also continue to operate after your death if you wish.
• Although you may appoint yourself to be the trustee of the trust, this is not the same as being your child’s legal guardian.
• Very specific language is required to draft a proper SNT. Be sure to consult with an experienced and qualified planning attorney if you are interested in creating a SNT.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Everyone knows that an estate plan can ensure your chosen beneficiaries receive the right inheritance. But did you know there are other benefits too? Here’s five things a good estate plan can for you.

1. Protect Against Disability – No, your estate plan can’t prevent disability from striking but it can certainly ensure that you and your estate are protected if it happens. Using an Advanced Health Care Directive and General Durable Power of Attorney can ensure that your medical wishes are followed and that your finances are handled by someone you trust.
2. Provide Incentives to Your Heirs – With the right planning tools, you can do much more than leave your heirs a lump sum estate. Instead, you can create incentives for them to excel and achieve by offering inheritance bonuses for graduating college, getting married or other milestones. You can also set it up so that your heirs’ inheritance matches whatever income they earn each year. If they want a bigger inheritance, they must find a way to earn a better living.
3. Avoid Probate – Yes, with the right tools, your estate plan can help your heirs stay out of probate court. This makes the whole property distribution process much smoother and ensures that the details of your estate remain private.
4. Sponsor A Charity – There are certain types of trusts that allow you to structure assets so that they benefit both your heirs and your favorite charity.  Donating this way also provides significant tax breaks to all parties involved.
5. Protect Dsabled Dependents – A Special Needs Trust can ensure that your disabled loved one continues to qualify for important public benefit programs while still enjoying the benefits of his or her inheritance.

Of course, that’s not all an estate plan can do, but it’s a good start. To learn more about how a good estate plan can make your life easier, contact an experienced and qualified estate planning attorney.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

If you’re thinking about getting a will, know that it may not be your best option.  A will allows you to have control over future decisions.  However, you should know that it’s important to consider other planning techniques, in addition.  A will is not the only planning tool that you need.  Take a look at the following information, to learn more.  If you have any questions, contact an estate planning attorney.

• You can’t plan for incapacity.  Your will is only effective after you die, so if you have no other estate planning documents in place, your wishes and needs won’t be met during incapacity.  This means your family may not have the authority to help make decisions on your behalf, and they may need to go to court to get approval.
• You can’t plan for the care of a loved one with special needs with a basic will.  If you leave assets to an individual with special needs with the use of a simple will without special provisions, there’s no protection. You likely want to ensure that your loved one is still able to receive Government benefits, in addition to the assets that you leave behind.
• You can’t avoid probate.  If you’re looking to avoid probate and you have more than a modest sized estate, you will need to use special estate planning techniques.  This can allow you to save time, money, and keep your affairs private.  It can also allow you to pass on your assets to beneficiaries more quickly.  With only a will and individually owned assets, probate is guaranteed except for estates that are modest in size.

Take a look at our next blog post (part 2 of 2), to learn more about the importance of your will.  If you’d like to create a will or discuss other estate planning tools, consult with a qualified and experienced estate planning attorney.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Probate can be an extremely costly, lengthy, and public process.  Many people take the time to carefully plan their estate in order to avoid probate.

If you’re looking to avoid probate, you will need to utilize the right techniques.  Take a look at some more great ways to avoid probate.  If you have any questions or if you’re ready to discuss your probate avoidance needs, meet with an experienced, qualified estate planning attorney.

• Gift during your lifetime.  If you’re able and willing to gift throughout your lifetime, you can begin to transfer ownership of your assets. This can be a useful way to avoid the probate process.  It’s important to only gift if you no longer need the assets.  You should also consider the gift tax and capital gains tax consequences of such gifts.  Seek competent tax advice before proceeding.
• Name your beneficiary for your life insurance policy.  This is one of the assets in which you will be required to name a beneficiary.  Designating a beneficiary will allow you to make sure that the right person receives your assets and will also avoid probate.  Your life insurance policy proceeds can’t be controlled by your will or other estate planning device.  Due care should be used in making the designation as it could cause problems with young, troubled or disabled persons named as beneficiaries.  If you have a living trust, it could be named as a beneciary. However, once again, there are numerous pros and cons to consider and competent, experienced legal advice, not just suggestions from an insurance agent, should be obtained.
• Designate your beneficiary for your retirement accounts.  This is another asset that allows you to designate a beneficiary with the use of a beneficiary designation form.  This asset isn’t subject to the probate process. Your retirement account funds can’t be controlled by your will or other estate planning device. As with life insurance, annuities and other assets which allow for beneficiary designations, one must carefully consider the correct designations as it could cause problems with young, troubled or disabled persons named as beneficiaries.  If you have a living trust, it could be named as a beneficiary.  However, there are pros and cons to consider and competent, experienced legal advice, not just suggestions from the benefits person, should be obtained.

Remember that by creating a will or choosing to ignore your estate planning needs altogether, your assets will be subject to the probate process.  Take the time to carefully plan so that your goals are met and your loved ones are able to receive their inheritances quickly.

If you have any questions about the probate process or if you’d like to utilize some probate avoidance techniques, consult with a qualified estate planning attorney.   You can avoid probate.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Are you looking to avoid probate?  Luckily, there are steps that you can take to ensure that your assets avoid the probate process.  Avoiding probate will allow your loved ones to get their inheritances quickly.  Avoiding probate can also save time, money, and keeps your affairs private.

Take a look at the information below to learn more about some of the probate avoidance options.  If you have any questions or if you’d like to discuss a probate avoidance plan, meet with an experienced, qualified estate planning attorney.

• Create a revocable living trust.  With this estate planning tool, you will title your assets in the name of your trust.  These assets will be distributed to your beneficiaries based on the instructions outlined in your trust document.  While it will take some effort to establish a revocable living trust, it is a beneficial option to consider for most persons who have more than a very modest estate.
• Consider joint ownership.  You may decide to jointly own property with another individual.  In this case, the property will be transferred to the co-owner after your death. This probate avoidance tool is commonly used by married couples.  However, this can be a risky decision to make in terms of, among other things, loss of control and unwanted taxes, so you should seek advice from an experienced, qualified estate planning attorney before using this option.
• Open a pay-on-death account.  With this option, the assets held in your  bank account will be transferred to a beneficiary of your choosing after your death.  This is a simple way to transfer money and avoid the probate process.  However, it also has some serious drawbacks, e.g., it does not address what happens when you become incapacitated and it can lead to avoidable problems concerning distributions to young, troubled or disabled beneficiaries.

With the right estate planning decisions, you can keep your assets and your loved ones out of the probate process.  Take a look at our next blog post (part 2) for more helpful suggestions.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

Each of these 13 disturbing estate planning facts is true; but, each situation can be avoided with a strong, individualized, comprehensive, and up-to-date estate plan.

• If you don’t name a guardian in your will, your minor children could end up with persons you either don’t like or don’t know.
• If you don’t provide for your pet in your estate plan, your pet may be euthanized when you die.
• If you put assets in joint tenancy with a second spouse, your children have a 50/50 chance of being disinherited.
• If you put the family vacation house in joint tenancy with a sibling, your children will not inherit your share of the house if you die before your sibling.
• A troubled child’s inheritance could make a drug, alcohol, or gambling addiction worse or even kill them.
• After you die, your spouse may loan or give the assets you left for the family to a new friend/spouse.
• Your gift to a family member may disqualify him or her from receiving Medi-Cal or Veterans benefits to pay for long term care expenses.
• Powers of attorneys may get “stale” and should be updated every few years.
• If your spouse gets into a serious car accident after your death, all of the assets that you left for him or her and the children can be seized in a law suit.
• Your child’s spouse could get his or her hands on all of the money you give to your child outright.
• If you put your child’s name on your house or bank account, his or her creditors may be able to seize those assets.
• If you transfer your house to your children during your lifetime, they get your original tax basis and could pay much higher capital gains taxes when they sell it than if you transferred the house to them at your death.
• Assets given outright to a special needs beneficiary are likely to disqualify him or her from receiving vital governmental assistance.  So, your money goes down the drain and causes a logistical hassle.

Indeed these 13 estate planning facts are completely avoidable with good planning.  Be sure to consult with a qualified, experienced estate planning attorney.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

If you’re in a blended family, such as a second marriage with children from a previous relationship, you can do much to keep the peace in your family with your estate plan.  One way to keep the peace, using your estate plan, is to specifically consider and plan for your children.  This could include not making your children wait until your second spouse dies before they will inherit.  Waiting and putting the children second may cause hurt feelings and a breakdown of relationships that you’ve likely worked hard to foster.

Use Life Insurance to Create Inheritances, if Needed

If you have sufficient assets, you may wish to provide an inheritance for both your children and your spouse at your death.  If assets are scarce, purchasing life insurance to create an inheritance may be an option.  Consult with an experienced, qualified estate planning attorney before making such a purchase.

If You Own Assets Jointly, You Disinherit Your Children

Many married couples own assets jointly, such as in joint tenancy, so the surviving spouse inherits everything at the death of the first spouse to die.  This means that the surviving spouse gets all of the assets; and, the children, from a previous relationship, get nothing.

Don’t Make Your Children Remainder Beneficiaries

If your children are from another relationship, careful planning is needed if they will be the remainder beneficiaries of your spouse’s trust.  After your death, this could cause a breakdown in the relationship between your spouse and your children; there could well be an inherit competition regarding how trust assets are spent and how they’re invested.

Instead, providing for totally separate inheritances for your children and your spouse might be consider.  Have any remaining assets in your spouse’s trust go to charity or to the beneficiaries of your spouse’s choice.

If you’re in a blended family, you can keep the peace by carefully considering how your children will be included in your estate plan.  If you are in a second (or third) marriage, consult with a qualified, experienced estate planning attorney for assistance.  Don’t expect to find this type of sophisticated planning on do-it-yourself, internet or bargain basement

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.

If you have a loved one with special needs and you want to include him or her in your planning, you need to take advantage of special needs planning tools. Such planning allows you to leave assets for the care of your loved one, without disqualifying him from receiving vital governmental assistance.  Take a look at how a special needs trust can fit in with your overall estate plan.  Another alternative may be the use of what is commonly called a “pooled trust”.  If you have any questions, or if you’d like to discuss the use of special needs planning, contact a qualified and experience estate planning attorney who understands and works in the special needs planning field.  This is a highly specialized area in which most attorneys, including many estate planning attorneys, do not have experience.

• A special needs trust is essential in order to protect your loved one

If your loved one relies on government benefits in order to pay monthly bills, you likely want to ensure that he or she will always be entitled to these benefits.  By leaving assets outright in your loved one’s name, you may prohibit him or her from receiving future benefits.

With the use of a special needs trust, you’re able to give assets and appoint a trustee to manage these assets.  The trustee is responsible for using the assets in order to benefit your loved one.  Since these assets are titled in the name of the trust, it will not affect your loved one’s eligibility to receive government benefits.

• Care of your loved one, even when you’re not around

With a special needs trust, you can know that your loved one will be provided for and comfortable.  Trust assets can be used in many ways in order to benefit your loved one and provide care such as a special trip, new television, massage, or new chair.  By choosing a responsible, loving, reliable, and honest trustee, you will know that trust’s assets are in good hands.  There are professional trustees who are experienced and available to assist with special needs trust administration.

If you have any questions about the use of this powerful estate planning tool, or if you’d like to create a special needs trust, consult with a qualified estate planning attorney.

Northern California Estate Planning Counselors, LLP is a member of the American Academy of Estate Planning Attorneys.