When Sacramento clients ask about creating an elder law plan or other elder law issues, the questions most commonly involve certain elder law myths. The reason there are so many misconceptions about elder law issues is that not many people are familiar with the concept of elder law. This article will dispel some of the most common elder law myths floating around.
Myth No. 1: My spouse will automatically be able to handle my affairs
It is a common misconception that spouses can easily and automatically take over each other’s affairs, if necessary. That is not always the case with everything. There may be some accounts that are not in your spouse’s name, so they may not be permitted access. That is why some of the most important tools, in both elder law planning and estate planning, are the living trust and the power of attorney.
A living trust or power of attorney are necessary in order to give someone authority to manage your affairs whenever you are no longer able to do. Having these documents in place is especially important as we grow older, as doing so most often results in decreased ability to handle one’s own affairs. So, even if you are married you need to take the time to create a living trust or power of attorney.
Myth No. 2: If I need Medi-Cal for nursing home care, I can just give my house to my children
This particular myth can cause you the most trouble if you buy into it. Far too many people believe that they can simply give away their property in order to qualify for long-term care coverage through the Medi-Cal program. In order to qualify, you must meet some rather strict asset restrictions. Medi-Cal also imposes certain asset transfer restriction. That means, if you apply for Medi-Cal and you transferred certain assets in order to qualify within the past few years, you may not qualify.
Myth No. 3: My estate is not big enough to need a living trust
Many clients believe that because they don’t have a lot of money, they don’t need a living trust-based plan or that they can’t afford such a plan. Regardless of the amount of assets you have, there can be numerous unintended consequences if you die without a solid estate plan In Sacramento, if you die without a will or trust, your property will be distributed based on the laws of intestate succession. Having a will or trust allows you to determine who will be the beneficiaries of your estate, and under what conditions. Unless your estate is very modest, a will typically requires your estate to pass through the probate process. A well constructed trust-based plan allows you to avoid probate.
More importantly, California’s laws of intestate succession do not provide for special circumstances such as incapacity or minority of a beneficiary. With a will or living trust, you can include specific provisions to deal with these issues. Finally, intestate succession laws do not deal with the custody of a minor child in a case where both parents die. With a will, you have the opportunity to designate who should become the guardian of your minor children, if necessary.
Starting the elder law planning conversation
The first step you should take, before actually starting the conversation, is to talk to all involved family members to make sure you are all on the same page. Resolve any misunderstandings or disputes ahead of time so that you can approach your parents with a united front. Doing so should reduce the risk of putting your parent on the defensive. This doesn’t mean the entire family needs to be in on the conversation.
The planning is much easier if your parent still has some decision-making capacity. In that case, the next step is talking with an elder law attorney to discuss the elements of the estate or incapacity plan that need to be included. When there are several siblings, for the purposes of transparency, it is best to have all of the children participating in the discussions if at all possible.
Figuring out how to balance autonomy with safety
Balancing your parent’s need for independence with the need to keep them safe can be a very big challenge. How to approach this issue truly depends on the issues each family faces. In many cases, if a conservatorship is necessary or anticipated, the probability of losing independence can be overwhelming or disconcerting. Conservatorships should never be sought simply because a parent makes a decision that you do not understand or agree with. A conservatorship should not be sought based only on a particular disability or medical diagnosis.
If you have questions regarding elder law, or any other estate planning needs, contact the Northern California Center for Estate Planning and Elder Law for a consultation, either online or by calling us at (916) 437-3500.