Last month we discussed generally how trust planning can be very useful in Medi-Cal Long Term Care planning. This month we’ll focus on specific types of trusts that can be useful in planning relating to Medi-Cal Long Term Care. They are: Medi-Cal Gifting Trust: This irrevocable trust is used to preserve clients' assets while still letting them qualify for Long Term Care Medi-Cal. With this trust, the person who creates the trust and puts his or her assets in the trust can't access the … [Read more...]
The Use of Trusts In Medi-Cal Long-Term Care Planning (Part I)
As many of our clients know, we regularly assist families facing daunting long term costs with planning aimed at obtaining available financial benefits from both the Veterans Administration and the Medi-Cal program. This planning is often very complicated but, nevertheless, extremely worthwhile for families struggling with these expenses. Valuable tools commonly used in our planning are various Medi-Cal Trusts. In this series of articles we’ll introduce you to these various trusts, and how … [Read more...]
Handling an Inheritance
If you are the fortunate recipient of an inheritance, be it small or large, from someone else’s estate, it is prudent to pause to evaluate the consequences. Tax Issues In the past, inheritances often came with tax consequences. Fortunately, this is not a problem for most Californians who inherit money or assets from other’s estates. The two most common tax issues related to inheritances are the estate tax, sometimes referred to as the “death tax” and the inheritance tax. The estate … [Read more...]
Planning for Medi-Cal’s Look Back Period
As clients of our firm well know, we are strong advocates for planning for not only our inevitable passing but also for the possibility for the need for some form of long term care. It’s a fact of life that the longer we live, the greater is the likely need for long term care. Paying for that care can be very expensive. The five basic methods to pay for such care are: 1.privately with one’s one assets; 2. with long term care insurance; 3. with Medicare, which is a limited benefit; 4. with … [Read more...]
What is a Testamentary Trust and Why Would I Need One?
One of the primary benefits of a trust is that the assets you include in the trust will likely avoid the probate process. There are different types of trusts and we can assist you in determining which ones are right for you. A testamentary trust is a type of trust that is included in a will or a living trust, but does not go into effect until the person who created it dies. Trust administration is an important process and understanding how a testamentary trust works will help you make a … [Read more...]
Update on California’s End of Life Option Act
There has been a very recent development in California’s End of Life Option Act. The Act is the law that permits terminally ill adult patients with capacity to make medical decisions to be prescribed an aid-in-dying medication if certain conditions are met. The law went into effect on June 9, 2016. Last week, a judge in Riverside County ruled that the Act was passed illegally during a special session of the Legislature called by the Governor that was supposed to focus on specific health care … [Read more...]
Hey Mom and Dad: Can You Help Me with My Down Payment? (Part II)
Last month, we discussed the pros and cons of lending money to a family member for the purposes of assisting them with the down payment to obtain a home loan. This month we will focus on the consequences of simply transferring the money to them as a gift. If instead of loaning a child a certain amount to be used as a down payment on a home, the funds are simply gifted to them, there are still some tax issues that must be considered. As we noted last month, in 2018, gifts under $15,000 per … [Read more...]
Helping Pay for the Grandkid’s Education
With the high costs of college these days, another frequent inquiry we get from clients with grandchildren is how to set aside funds for a grandchild's education. A commonly overlooked planning option is the Education Savings Account authorized by Internal Revenue Code Section 529. Often referred to as a “529 account”, this planning option permits you to reduce your taxable estate while earmarking funds for the higher education of a grandchild or any other family member, for that matter. Funds … [Read more...]
Hey Mom and Dad: Can You Help Me with My Down Payment? (Part I)
This is a common inquiry made by our clients with young adult children who are seeking to buy their first home. Gone for most first time buyer are the days of loose loan underwriting standards that lead, in part, to the collapse of the real estate market in the last decade. Most lenders now require sizeable down payments and good credit to obtain secured home loans. A common source of down payment money is the young buyer’s parents. There are typically two ways that such funds are provided … [Read more...]
Three Big Mistakes to Avoid in Your Long Term Care Planning
In this issue, we are offering friendly reminders on how to avoid common planning problems. Here are a few important things to remember about planning for the possible need for long term care. 1. Make sure your estate plans contain the proper “long term care planning tools”. For most of our clients, this step has already been addressed. If we have created your estate planning documents in the period after 2010, your documents contain the most current planning tools needed. If your … [Read more...]
