It’s no secret that there are many misconceptions out there regarding elder law and estate planning in general. We have encountered numerous clients with questions that stem from their lack of understanding about how elder law and estate planning works. This blog will try to clear up some of those misconceptions, but if you still have questions, call us. We are here to help.
Spouses cannot automatically take over the affairs of their partners
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 one of the most important tools, in both elder law planning and estate planning, is the power of attorney.
A power of attorney is necessary in order to give someone authority to manage your affairs whenever you are no longer able to do. Having a power of attorney 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 power of attorney.
Medi-Cal planning is necessary to protect your assets because you can’t just give them away
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 Medi-Cal. In order to qualify, you must meet some rather strict asset restrictions. Med-Cal currently also imposes a 30 month asset transfer restriction. That means, if you apply for Medi-Cal and you transferred assets in order to qualify within the past 30 month, you may not qualify.
Regardless of the size of your estate, you still need an estate plan
Many clients believe that because they don’t have a lot of money, they don’t need a will, or that they can’t afford a will. Regardless of a number of assets you have, there can be numerous unintended consequences if you die without a will. In California, if you die without a will, your property will be distributed based on the laws of intestate succession. Having a will allows you to determine who will be the beneficiaries of your estate, and under what conditions.
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, 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.
How to start the planning discussion with your loved ones
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.
How do you balance your loved one’s autonomy with their 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. Families should not seek to establish a conservatorship simply because a loved one makes a decision that they 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 trusts or any other estate planning or elder law matters, please contact us at the Northern California Center for Estate Planning and Elder Law for a consultation. You can contact us either online or by calling us at (916) 437-3500. We are here to help!