Having the Freedom of Choice with Long Term Care

It is very important to understand your loved ones care needs before they become a crisis for the care recipient, the care giver and the rest of the family. Understanding the process of government programs will also help in the care-giving decision-making.

Prior knowledge can help   prevent crisis planning and creating great stress for the well spouse and other family members. If your family does not have the money to privately pay for in home or assisted living care, option is Medi-CAL. Medi-CAL usually has its program target spend the end of their years in a nursing home. Other options are available, however, very limited with long waiting lists.

There are common funding options to help provide money for care services, such as  Long-Term Care Insurance,   Life Settlements, Reverse Mortgage,  Cashing Out Of a Principal Residence through Sale or Buyback Arrangement,  Retirement Savings Account.

Here are some common asset-saving strategies can be  Medi-CAL Planning,  Rearranging Insurance Plan, Private Home Care Arrangements,  Knowing the price of Communities that provide care,  Purchasing good Long-Term Care insurance, Commitments from the family to share care and  Tax Advantage Strategies. It is important to talk with someone who can review your entire estate and ways to protect your estate.

   Please call us for a  free phone consultation or appointment  consultation to review your individual situation and determine if you would benefit from our experience and legal services. 

What you do not know CAN hurt You!

For more information go to www.la-lawcenter.com or call us at:

Local Phone: (818) 241-4238 or

Toll Free Phone: (877) 537-8283

Probate 101… What Happens When Someone Dies without a Trust

Many people are unfamiliar with the various steps required before distributing an estate to its heirs and beneficiaries.

When a decedent dies without setting up a living trust a probate proceeding must be filed with the court. The Probate Court Procedures are required whether the decedent had a will or not, unless the estate is under $150,000 and doesn’t contain real estate. Property may then be transferred to the heirs by using an affidavit. The only way to avoid probate with real property and/ or over $150,000 in assets is to have assets transferred into a trust. The following is an overview of Probate.

In order to streamline the process, hiring an experienced probate attorney is very helpful. Probate attorneys are familiar with the process of transferring real estate and personal property, as well as the tax accounting aspects of distribution of the estate, such as the estate tax. They will prepare and file the necessary papers with the court and obtain a court order that distributes the property in the estate to the heirs and beneficiaries.

 Here’s an explanation of the process:

            When there is a will, an Executor is the person designated to administer the decedent’s estate. When there is no will, no Executor is named in the will, or the Executor is unable to act, an Administrator is appointed. These positions are considered Personal Representatives.
             
            The Personal Representative must collect, conserve, manage and control the assets of the estate, pay the decedent’s debts and taxes due and distribute the estate’s worth when there is a will. When there is no will, the estate is distributed by the laws of Interstate Succession. Interstate Succession generally states who will inherit your estate. This usually includes spouse and children first. If your spouse or children are not alive then relatives are the next to inherit. If there are not relatives, the property goes to the state.  
             
            The administration process of the estate begins when the Will, or no will, has been admitted to probate by the Superior Court and Letters Testamentary or Letters of Administration are issued. These letters give the Personal Representative the ability to gather the decedent’s assets into their estate.
          
             In California, the law requires notice from the estate to all creditors of the decedent to file their claims. If this notice is filed with the court and then published in a local newspaper, creditors have a window of four months to file their claim with the court. If there is no claim within the four month window, the estate does not have to pay.
            
             The personal representative must also create an inventory of the assets owned by the decedent when they die. Tax returns and accounting that need to be filed with the court come from this inventory. The inventory and non-probate assets, such as life insurance, joint tenancy property and trust assets are required for tax purposes, so they must be appraised.
           
             The estate tax is placed upon the transfer of property at death. Generally the estate is able to pay for the tax but it may be charged to the beneficiaries of the estate. Returns are filed for decedent’s estates with a gross value over the estate tax exemption amount. A gross value includes assets in the probate estate and may also include life insurance, jointly-owned property and assets that were given by the decedent. The estate tax must be paid by 9 months.
             
             The length of the probate process depends on the complexity of the estate. It may take only 6 months, but it can also continue on for years. In order to avoid the probate process, people implement a living trust before they die.
            
              Personal Representatives and the probate lawyer’s are compensated for the work, in California, by collecting a percentage of the gross estate.
             
       Living Trust’s help reduce the headache of having to deal with a prolonged probate. Living Trust’s allow for the nearly immediate distribution of assets, and generally cost less than a probate.

Take advantage of a free phone consultation or appointment for a free 30 minute consultation to review your individual situation and determine if you would benefit from our experience and legal services.

For more information go to www.la-lawcenter.com or call us at:

Local Phone: (818) 241-4238 or

Toll Free Phone: (877) 537-8283

Who Should Consider a Medi-CAL Asset Protection Irrevocable Trust?

In California, we are very lucky that Medi-CAL Asset Protection Irrevocable Trusts can be established by older adults (or persons facing the need for long term care) who wish to protect their assets (including the family home) from recovery from the State. Generally, anyone that is considering this type of pre-planning needs to have a sense of emotional security, because he or she must be ready to relinquish direct control over his or her assets. The control of these assets is turned over to a loved and trusted family member, who acts as trustee of an Irrevocable Trust. The trustee is in charge of guarding and distributing the assets in the Irrevocable Trust. Meanwhile, the person needing long term care continues to have direct control over his or her income, such as social security and pensions, as well as any assets chosen to remain outside the Irrevocable Trust.

Irrevocable Trusts have the additional benefit of passing assets to heirs (beneficiaries) of without requiring a probate. If needed, the Irrevocable Trust can set incorporate special purpose estate planning, such as Special Needs Trusts for heirs that are on SSI or other government programs; or Discretionary Trusts (Spend Thrift Trusts) for heirs that can not properly manage their financial affairs.

Currently there is no waiting period for the transfer of assets to an Irrevocable Trust in the California Medi-CAL rules, as long as the asset reallocations are strategically planned and executed within the Medi-CAL Stacked Gifting rules.

We are waiting for the DRA (Deficit Reduction Act) to be adopted by California, which is expected to require California to have a waiting period of more than 2 years after a transfer. When the DRA is adopted we expect the stacked gifting to not be allowed. There will be other options for asset protection but it will not allow the amount of asset that we can currently protect. So it is a good idea for anyone thinking they will need Medi-CAL in the next 5 years to help pay for long term care in a nursing home to do pre-crisis planning NOW! This means setting up an Irrevocable Trust and transferring the bulk of asset into this trust to start the timeline as soon as possible.

At this moment we can help you set up an Irrevocable Trust and transfer assets into this trust. This process will help you qualify for VA and Medi-CAL benefits within a short period of time (the time it takes to make all transfers and stacked gifting processes guided by our staff.

We are passionate about helping families preserve their assets with the least amount of time and trouble. We offer free consultations to seniors and their adult children.

 For more information go to www.la-lawcenter.com or call 877.537.8283.  

Elderly Parents in Planning Financially for Their Long Term Care

You may be taking care of elderly parents now or looking at that possibility in the near future. According to a report from USATODAY/ABCNews/Gallup Poll, 41% of baby boomers are helping take care of elderly parents by providing personal help or financial assistance or both.

If financial planning and long term care planning have not been done previous to the need for care, the burden falls on the caregiving family member. Decisions about how care will be paid for, who will be responsible for managing the estate as well as how the long term care will be given can cause stress and contention among family members.

It is best for parents and all family members to be involved in planning for future financial needs.  The financial resources being used today could change drastically with the occurrence of a stroke, illness or onset of dementia. In order to plan financially for long term care, you need to know what the costs are now and what they will be in the future.

Every year MetLife does a survey of long term care costs. Their 2010 survey shows that the average daily rate for private nursing home is $229 which is up from $219 in 2009. Assisted living monthly base rate cost rose to $3,293 in 2010 from $3131 in 2009. Home health aids average $21 an hour.

Planning financial needs can be very difficult, considering you do not know when long term care will be required or how long it will be needed. You can determine what will be needed in certain living situations. Staying in your home for care will require Professional Home Care assistance, travel accommodations to doctor appointments, help with shopping, meals, medical supplies and medication and possibly a 24-hour attendant. Even if a family member is doing most of the care, eventually professional care will be required or a move to a nursing home facility will be necessary.

When evaluating your present income and assets consider how they would work for future needs.

• What are my care options?
• What type of long-term care can I afford?
• Do I have long term care insurance?
• Are there assets I can sell?
• If I stay at home how will I pay for care?
• Do I have to sell the house to pay for other living arrangements?
• Are there other financing alternatives?
• Do I have life Insurance or the means to pay for a funeral and burial?
• Will my spouse be cared for financially?
• Should I do Medicaid planning?
• Do I have the legal documents that may be needed?

An article by Thomas Day, Director of the National Care Planning Council, titled “Paying the Cost of Care,” reviews some of the financial options that can be used.

“Tangible assets that might produce enough income to pay for long term care might include investment property such as rentals, commercially leased property, land, a farm, second home or a business..."

"Some individuals are heavy into real estate and short on cash. If the intent was to cash out of the investment at some future point, then a sale is warranted. But, it seems a shame to sacrifice in early years to establish an investment only to throw it away to long term care. It would make more sense to use income from the investments to buy long term care insurance."

Long term care insurance is one option for paying for care. Long term care insurance helps pay for the care you need when you can no longer care for yourself. It can protect your family's financial future and your own investments. There are qualifications that need to be met with health and age. This type of insurance is more expensive the older the person and almost impossible to get if age related illness has already occurred.

Senior Financial Planners, Elder Law Attorneys and Veteran Benefits Consultants can assist you in evaluating your needs and future planning.

Senior Financial Planners are expert in working with seniors and their families to set up long term care plans.  They usually work with an Elder law Attorney and Care Manager (Professional) to give you all options and resources for care.

Elder Law Attorneys help with Medicaid Planning and Asset protection as well as legal documents needed for final requests.

If staying in your home is a desired option, a Reverse Mortgage can supply the funds to pay for home care.

Another option for veterans who served during a time of war is the Aid & Attendance Benefit.  This benefit provides extra income up to $1,949 to help pay for home care, assisted living and medical costs. It will also pay for widows or widowers of the Veteran. To learn more about qualifications for these benefits contact a Veteran Benefit Consultant in your area.

Knowing your needs and financial resources is paramount before making any long term care decisions. Working together, both parents and family members can ease the stress and burden of elder care needs.

>>>>> For More Information go to www.la-lawcenter.com or call 877.537.8283  <<<<<