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Good News Bad News

Good News / Bad News


Covid has been bad news with illness and death for millions, the loss of loved ones and caregivers for millions, and economic turmoil for millions more.

When the pandemic first took off, the hospitals needed thousands of respirators. The good news was that the government had thousands in storage. The bad news was that the vast majority of those didn’t work. Good news and bad news.

Despite the losses from the outbreak, the good news has been the success of the vaccines we have available in the US. In other countries, the success has varied.

The good news in the Seychelles, Bahrain, Chile, and Mongolia was that they got out of the gate very fast with high vaccination rates in their populations. The bad news was that all four of those countries used Chinese vaccines which apparently weren’t very effective, and soon all four of those countries ranked in the top 10 countries of the worst outbreaks worldwide. Yes, good news and bad news.

What about your estate plan? If you have one, that’s good news. If it won’t work when you need it, that’s bad news. Will it work? People counted on those Chinese vaccines to work, but it appears that they weren’t effective.

Does your estate plan reflect your current wishes? Are the right people in charge to look after your interests? Will the results be good news or bad news?

We often see trusts that don’t reflect the person’s current wishes because they just haven’t gotten around to making the updates. But in some cases, the trust was wrong from the beginning. It simply wasn’t a good trust.

In a recent case with a husband and wife, the trust says that if either is incapacitated, they agree to resign from being Trustee. The next paragraph gives a committee of people who will decide whether the person is incapacitated, and if two of the three say the person is incapacitated, then the person agrees to resign. (Committee of three is pastor and two medical doctors.) The problem with the trust is that there is no third step for removal of the Trustee if he or she refuses to resign, and now the couple has waited too long and the husband’s dementia has progressed to the point where he no longer has the mental capacity to resign. I cannot allow him to sign any documents at all. He can say his name, but he doesn’t know that he’s married to his wife, and when asked for his town, city, street, or number of children, he can only repeat his name. — He can no longer sign any legal documents.

The wife has exhausted their liquid assets in paying for their stay at an assisted living facility, and now she’s facing the prospect of selling their residence and paying a huge amount of capital gains tax. Due to many different circumstances, and waiting too long to act, she’s now facing a dilemma and has a poorly written trust.

Where do you stand on this issue for yourself? Do you have a good trust? Does it reflect your current wishes of who you want in charge and how you want any remaining assets distributed after your death?

If you don’t have a trust, go see a qualified attorney who practices elder law and estate planning. If you have a trust, make sure it reflects your current wishes and will work when you need it to work.

Protect yourselves. Protect your families.

Dementia and Your Finances

Dementia and Your Finances

A large study by a major financial institution a few years ago found that fears about dementia outweighed the fear of all other possible illnesses combined ­— and with good reason. Yes, more than from cancer, heart disease, and other illnesses combined.

If you have some wealth saved up through your own efforts or through an inheritance, how are you protecting that wealth in the face of future dementia?

The most obvious problems that come up are the scams that face seniors as they age, but there are also issues with basic financial decisions. One study found that our financial skills peak at age 53, so how good are you at making decisions at 75, 80, or 85? Think about it. Will you still be making good decisions, or will you just think you’re making good decisions.

Giving up sole control of your investments and savings may be harder than giving up control of the keys to your car. But it may be critically important to preserve the assets for the well-being of you and your spouse, or to have those assets passed onto loved ones in the future.

One 90 year old client asked me to help him review his taxes because he couldn’t figure out why he suddenly owed so much. Well, even though he didn’t need any additional income above his monthly Social Security and pension, his financial advisor had suggested he liquidate his smaller IRA account and withdraw the $150,000 balance. Really? Why? Now, the client owed income tax on the $150,000 withdrawal of funds he didn’t even need. It was a huge mistake, but he said he was simply following his advisor’s recommendation.

And who will manage your accounts once you die or have dementia or a stroke? One man, who was in the very early stages of dementia, claimed that he was still capable of managing his assets at 20 different institutions. Yes, 20 different institutions! I asked him how his wife would manage all of these accounts if he couldn’t. He was adamant that he was still fine, but his wife admitted that she knew nothing about the accounts and didn’t even know the names of the institutions that held their funds. What would happen down the road?

Since 2018, brokerage firms have been required to ask customers to designate a “trusted contact” who can be notified in case of possible problems, but less than 25% of clients have provided the name of a contact.

And what about the growing number of internet investment accounts that have no paper statements being mailed to the investors? How will a spouse or adult child access those accounts if they don’t have your passwords or don’t even know which institutions to contact to find your money?

I’m not against technology, and I’m not against using more than one institution for your investment accounts, but who else knows how to access that money if we need it for you and your family while you’re disabled or after your death? And how many different accounts do you really need?

Think about what you can do to make it easier for trusted people to help avoid problems if you’re in decline, and also making it easier for trusted people to access your assets while you’re incapacitated or after your death.






What’s hospice, and how does it work?

The formal definition of hospice, as per Medicare, is that hospice is for people who are terminally ill and not expected to live more than 6 months.

People need to understand that hospice is intended for people who are terminally ill, and the focus is on care in the form of comfort, and not on care for curing the person’s illness.  Hospice care starts when your doctor and the hospice doctor certify that you’re terminally ill, which means that you are not expected to live more than 6 months.

Medicare explains it as follows:  When you choose hospice care, you decide you no longer want care to cure your terminal illness and/or your doctor determines that efforts to cure your illness aren’t working.

There are people who actually “graduate” from hospice. It’s very rare, but some people placed on hospice later improve to the extent that they no longer need hospice care. In one case that I heard of, the woman actually went home and eventually started working again. Highly unusual, but it happens.

Hospice care is generally provided in the home, and for many people, that’s exactly what they prefer.

But have you prepared all the necessary legal documents ahead of time for any decisions that need to be made while you’re still alive, and for people to follow your wishes after your death?

All too often, I am asked to visit someone on hospice to prepare their legal documents, but sometimes the family has simply waited too long, and the person cannot make legal decisions or sign anything. This often leaves the dying person and the family in a very difficult position.

Who can make the person’s healthcare decisions? Who can pay their bills and make their financial decisions? Who will get their assets when they pass? Who’s in charge?

These are all very real questions that need to be given a lot of thought while the person is still of sound mind and can make the decisions their way without being unduly influenced by others.

I recently had a visit from siblings who accused one brother of stealing from the brother with Alzheimer’s, and of having the ill brother change his power of attorney after the ill brother was already diagnosed with Alzheimer’s.

Picking the right people to make decisions for you is critical, and having the right documents put into place while you’re still mentally competent is also critical. You want the right people making your decisions for you, and you want your assets to go where you decide you want them to go upon your death.

The last thing you need is for you to have your hard-earned money stolen from you or your beneficiaries, or to have your assets spent on a litigation battle between your heirs and other beneficiaries.

Take care of things while you can and appoint people you trust to make the right decisions for you and follow your wishes.

Do You Have the Right Durable Power of Attorney?

What is a Power of Attorney? Sometimes it’s called a Financial Power of Attorney. It’s a document that gives authority to your named Agent to act for you in various situations.  That may be paying your bills, accessing your bank accounts, closing your accounts, or even selling your residence.

Have you named a successor Agent? Maybe you named your spouse or your oldest child as your Agent, but what if that person cannot act for you. Have you named an alternate so that you have some back-up?

Is your power of attorney elder law friendly? An example of the importance of this is whether your Agent can protect your assets and get you onto government benefits such as Medi-Cal if you need assistance at home or you want Medi-Cal to pay for your nursing home costs. It’s not just a matter of the application, but also allowing transfers of assets for eligibility for those benefits, and protection against the state placing a lien on those assets for repayment to the state. These are critical issues for many elders, and the lack of a power of attorney, or having the wrong power of attorney, can prohibit your family from taking the necessary actions to protect you and your loved ones.

I have seen many individuals and families face financial hardship because a proper power of attorney was not in place. Getting a good power of attorney is not difficult. Not having the right one in place when you need it can be devastating.

Every adult should have the right kind of power of attorney in place and have the best Agent and successor Agent available to take action to help them. It’s one of the most important documents that a person can have. If you don’t have a durable power of attorney in place, get one. If you have one, make sure that it is detailed enough to allow your Agent to take the necessary actions that may be needed to protect you, to care for you, and to protect your assets for the benefit of yourself and your family.

What is Elder Abuse?

California Welfare and Institutions Code 15610.07 WIC — Elder abuse.

(a) “Abuse of an elder or a dependent adult” means any of

the following:

(1) Physical abuse, neglect, abandonment, isolation, abduction, or

other treatment with resulting physical harm or pain or mental suffering.

(2) The deprivation by a care custodian of goods or services that are necessary to avoid physical harm or mental suffering.

(3) Financial abuse, as defined in Section 15610.30.


I had originally planned to write something different for this article, but this morning I received a call from an attorney friend who was trying to help his aunt. The aunt is in her late 90s and has had advanced Alzheimer’s for a number of years.  The aunt has enough income to pay for her apartment rent, utilities, and food. It turns out that she had to be hospitalized because a grandson was physically beating her. The hospital reported the abuse and it became public. Several family members had been living with the aunt because she was the “golden goose” with her income, and they could live there for free and use her money to buy food. Other family members didn’t report the known abuse because they didn’t want to lose their golden goose. The physical abuse is certainly elder abuse, and the case likely involves elder financial abuse as well because the aunt’s income was being used to support several other people to her detriment.

The first step in these cases is generally to call the Adult Protective Services (APS) office in the county where the elder resides. They have the resources and trained personnel to handle these cases. If you suspect that an elder is being abused, whether it’s physical abuse or financial abuse, report it.

I had a recent case where a son moved into his father’s big house and hadn’t paid rent for two years, so the 94 year old father, who was living in a very old, one bedroom house together with his caregiver friend, was deprived of the rental income he needed to pay for food and medicine. The son was supposed to pay his father’s utilities, but the gas and electricity had been cut off once, the water department had threatened to cut off his water, and the son had refused to pay for his father’s land line telephone, so it was cut off too. The son was taking his father’s income and only giving the father $300 a month to live on, which was not even enough to provide food for the father and his caregiver.

Don’t let these things happen to someone you know. Report elder abuse if you suspect it.

Why don’t people plan ahead with an Estate Plan? It’s a basic combination of procrastination and lack of knowledge.

Most people know that they should have some type of an estate plan in place, but they just haven’t gotten around to it yet. Or perhaps they made a plan 10 or 20 years ago, and it’s now outdated due to family changes or tax law changes. Procrastination is the enemy of good planning. Don’t let yourself wait so long that dementia, sudden illness, or death will prevent you from doing proper planning. Plan ahead.

Good estate planning encompasses how decisions will be made if a person dies or becomes incapacitated, and elder law planning takes things a step further to look at how your assets can be protected in the event that you need nursing home care. Everyone should consider both.

If you succeed in reaching the ripe old age of 65, the odds are slightly greater than 50% that you’ll spend some time in a long-term care facility, and the average length of stay in a long-term care facility is about two and a half years. That’s a huge cost. Don’t take that gamble.

A great myth about Medi-Cal is that you can’t qualify unless you have no money at all, or that the state will take everything from your family when you die. Proper planning can change all of that. Learn what can be done.

If you don’t yet have an estate plan, you should consult a knowledgeable attorney. If you have a plan, but haven’t looked at it for 5, 10, or 20 years, I suggest that you pull it out, take a good look at it, and see whether it still accurately reflects your wishes. If your plan was prepared without looking towards the potential need to have Medi-Cal pay for your long-term care, then your existing durable power of attorney may actually hamper the Medi-Cal planning efforts that someone might want to do on your behalf. Be proactive. As Gen. George S. Patton said, “Be prepared for the unknown by studying how others in the past have coped with the unforeseeable and the unpredictable.” Don’t let yourself delay to that point where the lack of a plan hurts you and your family.


Your Legal Name and Your Name on your ID

What’s your name? No, no, I need your legal name? Do you have a valid ID?

We frequently have name problems with people, and we frequently have ID problems with seniors. Don’t let this relatively simple issue become a major problem or inconvenience for you or your family.

I have had people tell me that the name or spelling on their driver license is incorrect, and that I don’t need to worry about it. Really? Not true. If we’re creating legal documents, we need to have your legal name. We can include an “aka,” or “also known as,” but we need to have your legal name.

How Will You Pay for Nursing Home Costs?

How can a person pay for nursing home care without depleting all of their assets, or without the state taking their home after they die? Those are critical questions, and the lack of the right information could cost a family more than $1 million.

If you’re eligible for Social Security, you probably know it. If you’re eligible for Medicare, you probably know it. But what about Medi-Cal? How will you pay for the costs of nursing home expenses? Could you be eligible for Medi-Cal to pay those costs and not know how to qualify and protect your assets? Have you planned ahead to protect your family’s assets? Are you aware that nursing homes in the Bay Area charge $11,000 to $12,000 a month? Yes, it’s true, and how will you pay for it?

Many people have long term care insurance and think they’ll be okay, but they don’t realize that their insurance plan isn’t sufficient to cover all of the costs. Will your plan cover $350 or $400 per day? Most plans won’t, and most people don’t know how much their plan will pay.

One of the greatest failures I see as an Elder Law Attorney and Medi-Cal Planning Attorney is the general lack of awareness of what can be done to protect a family if you use proper planning. I recently read an article written by a nationally renowned estate planning attorney who said, “If the elder law attorney can advise clients early enough, . . . they can alleviate later problems.” But a lot of people don’t plan properly, and then I see the family disasters after it’s too late to correct.

The average length of stay in a nursing home is 30 months. That’s 2.5 years. That puts the total cost of an average stay at about $350,000, but what about all the people who end up staying much longer? Can you afford that? How will it affect your spouse and family? How can we protect your money?

70% of individuals are impoverished within one year of entering the nursing home. 50% of all couples are impoverished within one year of one spouse entering the nursing home. It’s expensive. What can be done to protect your assets and establish some level financial security?

Federal law permits Medi-Cal planning, and people who plan ahead can protect their assets for their families. What about the families who think that the parents’ home will go to the kids when both parents die, but the home later must be sold to satisfy the debt to the State of California? Why does this happen? Two reasons: (1) lack of knowledge, and (2) not having the proper legal documents put in place by a knowledgeable Elder Law Attorney who specializes in the financial side of Medi-Cal Planning and Eligibility for clients.

Lack of proper planning can cost a family hundreds of thousands of dollars.

A local woman came to me recently because her long-term friend had died six weeks earlier. He had gifted her 50% of his home four or five years ago, and the other 50% of the home was held in his trust to be distributed to her following the man’s death. The problem was that the attorney who prepared the trust wasn’t familiar with elder law rules and Medi-Cal, so now the State of California will seek repayment of his Medi-Cal bill. He had been in the nursing home for about five years prior to his death, so his debt back to Medi-Cal will be around $500,000 to $600,000. The woman who was to get the home will now have to pay the debt to the state if she wants to keep the home for herself. Neither the woman, nor the friend who died, were ever advised that there could be a problem with her getting the rest of the home upon the man’s death. Sad result.

Don’t leave your future to chance and hope. Take care of yourself and your loved ones. Make sure that you work with a qualified elder law attorney and have a quality estate plan in place.





Do you need a Trust or a Will?

Some people are confused by the difference between a Trust and a Will. Which should you have? Which is best for you?

If you have a home or other significant assets, you probably want a Trust. If you’re married or have children, you probably want a Trust. A good Trust will protect your assets from going through Probate, and it will prevent the need for a Conservatorship if you’re incapacitated and can’t handle your own affairs. It also sets out the distribution upon your death, and it makes rules for the distributions, such as your grandchildren don’t have control until they reach the age of 30 years.

Once you sign your Trust, it has legal meaning from that moment. On the other hand, a Will has no legal effect until the moment of death.

If you only have a Will and you become incapacitated, the Will does nothing to allow other people to act for you to take care of you or your spouse or loved ones. A good Will can set out the distribution of your assets, and it can make distribution rules, but nothing can be done to protect you or your loved ones before your death. This might create the need to have you under a Conservatorship, which can be quite expensive. Having a Will also means that your assets will pass through Probate.

I was contacted last week by two women who were both recently widowed. One husband got an infection and died, at age 52, within 7 days. His widow said how she wished they had come to see me a few months before. The other widow lost her husband from a sudden heart attack, and now she’s left alone with a 3 month old child and having to deal with the difficulties created by not having proper legal documents in place. Don’t let these things happen in your family.

If you don’t have the right documents in place, we can’t properly care for you if you’re incapacitated, and if you die, then you just leave behind a mess for other people to clean up. Get the right documents in place now so that you and your family are properly protected.


Will the State Take Your House?

There are two mistaken beliefs about a person’s house when they go on Medi-Cal to pay for their nursing home cost. The most common misbelief is that the state will take your home when you die. That’s wrong if you plan properly. The second misbelief is that the home is an exempt asset, and therefore you can get Medi-Cal to pay for the nursing home even if you have own a residence. This belief is part true and part false. The residence is an exempt asset, but the state wants to recover their payments after the elder’s death by placing a lien upon the residence so that the get paid. This action is called “estate recovery.”

Medicare is what you get when you turn 65 years of age. Medi-Cal requires that you meet certain financial eligibility rules. There are thousands of people statewide in nursing homes with their monthly bill being covered by Medi-Cal, but to be eligible for Medi-Cal to pay for the nursing home, they can only have a maximum of $2,000 of countable assets in their name. There are two ways to do this. First, you could spend all of your money on care and then become eligible, or second, you could work with a qualified elder law attorney to protect your assets with a plan that’s allowed by California law.

The sad cases are when people come to me too late and tell me, “We just finished spending the last of Dad’s $400,000 on the nursing home payments, and we don’t know what to do next.” The families in those cases are always stunned to find out that the elder’s money could have been protected. They look at me and ask, “Why didn’t anyone tell us about this three years ago?”

Medi-Cal is California’s name for Medicaid, and our laws here are different than the laws in the other 49 states. Our laws allow people to protect their residence, vacation homes, rental properties, farms, and other financial assets, . . . but only if they plan properly.

Don’t lose your hard-earned money to nursing home payments, and don’t let the state recover costs against the elder’s residence. Plan ahead by working with a qualified elder law attorney.