One way you can make a year-end charitable gift is to write a check to the charity and take a charitable deduction on your income tax return. The problem is that you're using “after tax dollars” to make the gift.
There is a more tax-savvy way, if you have shares of stock that have appreciated in value since you purchased them. You can contribute the shares directly to the charity instead of simply selling them and then writing a check or taking money out of your bank account.
Assume you want to make a $5,000 gift to charity and you own 10 shares of Apple stock that you bought for $50/share. Your cost basis in the stock is $500 (10 shares x $50/share). Let's assume that, on the day you want to make the charitable contribution, Apple is selling for $500/share. So $500 times 10 shares is $5000, which is the amount you want to donate.
If you're dealing with a medium to large sized charity, you can often go on the charity's web site and find the charity's brokerage account information with XYZ brokerage firm (often in their web site footer). The charity will often list the brokerage account number and provide instructions on how to transfer shares of stock directly into their brokerage account.
You could then call your own financial advisor, tell the advisor you want donate 10 shares of Apple stock to XYZ charity, and give your advisor the wire transfer information (called a “DTC” number) for that charity's brokerage account.
Doing it this way allows you to deduct the fair market value of the shares on the date of the gift - in this case $5000 - on your tax return, but since you only paid $500 ($50/share), your $5000 donation only cost you $500 out-of-pocket.
If, on the other hand, you sold 10 shares of stock and used the sales proceeds to make the gift to charity, you would have less to donate to the charity (because you would have to pay capital gains tax on your $4500 of profit - that is, on your income tax return you would report a sale of $5000 worth of stock, minus your cost basis of $500, showing a capital gain of $4500. You'd have to pay capital gains tax on the $4500 gain. So overall, that would cost you more.
It's good for the charity to receive the stock because, even though there are built-in capital gains, a charity is exempt from having to pay capital gains tax. So you end up not paying any capital gains tax, you get to deduct $5000 from your income tax return, and the charity gets the full $5000 because they don’t have to pay any income tax on the gift….. Everyone wins except for the IRS.
CAUTION: Donating shares of stock that have declined in value since your purchase is not a good strategy.
All the best,
Who will take care of your children if they're orphaned? If you fail to make your choices known through your estate plan, the selection will be left to a judge. Therefore, there are some critical decisions to make:
- Select guardians who share your faith, values, and life priorities, and already have a positive relationship with your children.
- Make sure your legal plans provide for compensation of the guardians, or at least all legitimate expenses.
- When selecting a guardian, consider the impact of divorce - will your children face a split guardianship?
Obtain permission of the selected guardians before appointing them in your legal instruments.
There are several options for selecting guardians for your children.
OPTION 1: Trusted Family Members or Friends Can Serve as Both Guardians of the “Person” and Guardians of the “Estate”
- Likely to know the strengths & weaknesses of your heirs
- Can provide a warm, loving environment where the children can live
- May not charge much if anything to oversee the inheritance
- Downside: might be busy / distracted with their own financial responsibilities and not be able to say "no" to irresponsible heirs
OPTION 2: A Professional Fiduciary Can Serve as Guardian of the “Estate”
A fiduciary is a person or institution legally responsible for the financial affairs of another - and they are held to the highest standards of care and loyalty in this role Downside: A professional fiduciary is NOT likely to know the strengths & weaknesses of your heirs. They likely WILL charge significantly to oversee the inheritance A professional fiduciary won’t raise your child (serve as guardian of the “person”)
OPTION 3: You Can Have the Child Live with Family Member or Trusted Friend, and a Professional Fiduciary Handles the Money
- A family appointee is selected who knows the strengths & weaknesses of your heirs
- A professional fiduciary handles the accounting & tax details, and is compensated for the day-to-day management of the inheritance for your heirs. Plus they can play heavy if needed
If the proposed guardian does not live in the United States, the decisions become more complex. For example, you will need a temporary guardian who can care for your children until the proposed guardian can get a flight to the US. The proposed guardian will also need to be prepared to stay in the US for several weeks - even if you’ve nominated a guardian, it takes the court a minimum of 30 - 45 days to “confirm” the nomination, and the guardian will not be able to take the children outside of the US until he’s been confirmed.
To examine what you really need to protect your children if orphaned, make the phone call now: (650) 325-8276
All the best,
Now that the fiscal cliff nightmare has passed, many families are wondering how the whole debacle finally shook out. Did Congress actually avert a crisis or does the deal spell doom for those with a sizable estate?
The New Rules for 2013
Under the American Taxpayer Relief Tax Act Of 2012, which Congress passed shortly after midnight on January 1, 2013, an individual may now protect up to $5.25 million from federal estate and gift taxes. Couples are thus able to shield $10.5 million combined. This actually is good news for families facing possible estate taxes as the regulations in place just last year only exempted $5.12 million per person ($10.24 million per couple). Any amount over that exemption will be taxed at 40% - an increase from last year’s 35% rate - but much less than some expected…. and since the exemption will also be adjusted for inflation, the amount shielded from taxes will rise in the coming years. Without any action, the exemption would have fallen to $1 million and the tax rate would have increased to 55%.
No Change to Marital Deduction
The newly enacted law thankfully does not change the marital deduction that was already in place. This means that there is an unlimited deduction from both estate and gift taxes that postpones the tax on assets inherited from a spouse until the remaining spouse dies. One important caveat: the marital deduction only applies if the inheriting spouse is a U.S. citizen unless a special type of marital trust - called a “Qualified Domestic Trust” or “QDOT” is established.
So under the new law, the amount of money that the surviving spouse can pass along includes their personal exemption of $5.25 million along with the unused exemption of their deceased spouse. This is known as “portability.” It is a concept that has been extended and made permanent in the recently implemented legislation.
It’s important to note that this portability does not happen automatically. Instead, the person handling the estate of the spouse who died first will need to transfer any unused exemption to the surviving spouse. The survivor will then be able to use it to make gifts or pass assets through his or her estate. For this to happen, though, an estate tax return must be filed within nine months of when the first spouse dies, even if no estate tax is owed. If the executor fails to file the return or misses the deadline, then the first spouse’s exemption is lost forever.
Whether you have few assets or a multi-million dollar estate, you must have an effective estate plan that works for your family. As a certified estate planning, trusts, and probate law specialist (certified by the California State Bar Board of Legal Specialization), I have the skills and knowledge to handle complex estate planning matters. To schedule a consultation to discuss your estate planning goals and needs, please contact us.
Source:“After The Fiscal Cliff Deal: Estate And Gift Tax Explained,” by Deborah Jacobs, published at Forbes.com.
All the best,
I was quoted recently in an article on "Estate Planning Missteps" that referred to the heirs of James Gandolfini. Gandolfini is the acclaimed actor who played Tony Soprano on the award winning HBO series, "The Sopranos". His estate was worth an estimated $70 million at the time of his death. It was divided among his wife, sisters, newborn daughter, and various friends. He also created a trust for his son, Michael. His assets included a life insurance policy and a condo.
The estate tax bill will be enormous, due to the way the estate is structured. Estate planning would likely have saved a good portion of that tax burden - literally, millions of dollars in federal estate taxes. The estate will be taxed at a whopping 40% federal rate. He'll also owe New York state estate taxes - his official residence is in one of the few states that imposes its own estate tax, so he only gets a $1million break there.
Options for estate planning could have included a "marital deduction trust" for his wife, which would have allowed her to use all of the assets in the trust until her death and would have deferred payment of the federal estate tax until that time. The marital deduction trust is a great tool in "blended family" situations - it is quite common for such trusts to provide that after the death of the surviving spouse, the remaining assets are distributed to all of the children, including children from prior marriages. If Gandolfini had done that, his son Michael might have been assured of receiving a bigger portion of the estate.
There were other options, of course. As I stated in the Lawyers.com article, Gandolfini could have established irrevocable life insurance trusts and and charitable remainder trusts (among other sophisticated tax-saving devices). Advanced estate planning could have netted the family more money, with a smaller payout to the IRS. To read the original article, visit the blog entry on [lawyers.com].
All the best,
An estate plan should generally be reviewed after a major life event, such as birth, marriage, or death. But even apart from these events, you should monitor and revisit your estate plan periodically (at least annually) to ensure it achieves your goals.
Your estate planning attorney, your tax advisor, and your financial advisor are your go-to people when revisiting your estate plan - especially when any of the following events occur:
Annual Maintenance and 3 Year Review. If it's been at least one year since you've glanced at your plan, or three years since your most recent estate plan tune-up, it's time for another look. Besides major life events, tax laws change (more often than you might think). Portfolio values fluctuate, and your own goals for the future evolve.
|Image credited to ibertech.wordpress.com
- Changes in Your Family. Birth, death, marriage, and divorce are the big ones. Any of these should cause you to revisit your estate plan, and may prompt a revision. New beneficiaries might be added because of a birth or marriage. They might be removed due to a death. Divorce further complicates things - if your son or daughter gets a divorce, you might want to remove the former spouse from your estate plan but retain a place for their joint children. You also want to keep an eye on who you have designated as your Executors, Guardians, Trustees, Attorneys-in-fact, and Health Care Agents in your Will, Trust, Durable Powers of Attorney for Finances, and Advanced Health Care Directives.
- Health Issues. Long-term care is a significant medical expense. You may want special provisions in your estate plan to assist family members who might require long term care. If your own health needs change, you might also want to give your Trustee specific instructions on the kind of care you want for yourself (for example, perhaps you want to stay in your own home with home care providers - or maybe you would prefer to have your Trustee spend your money on a luxury retirement community - even if those choices deplete what you’ll be able to pass along to your kids).
- Retirement. Retirement might not instantly affect your estate plan if you're contemplating retiring in the next 5 years, but there will be an eventual impact. For instance, you may need to begin withdrawing some of your IRA funds to supplement your retirement income, instead of contributing more. This change of direction should prompt a revisit of your estate plan.
- Family Business. Any business or business interests you own tend to evolve, as does the market itself. For instance, you might convert a Sole Proprietorship to an LLC or LLP, or a partnership might transform into an S-Corp. Those are as significant as a personal change in your family itself.
- Performance of Portfolio Investments. A significant fluctuation in the total value of your estate - say +/- 20% since the last time your estate plan underwent a review, should probably prompt another review. Consult your estate attorney and provide an updated summary of your assets & liabilities. Discuss gifting excess assets to family members (e.g. children, grandchildren) as a possible means of reducing or eliminating estate taxes upon your death.
- Philanthropic Interests. Leaving a portion (or all) of your estate to charity may require restructuring your estate plan using charitable trusts or donor advised funds as planning vehicles. These, too, can provide some long-term or immediate tax benefits.
- Purchase of Life Insurance. Buying a life insurance policy can seem straightforward, but you might want to transfer ownership of the policy to a life insurance trust, so the value is kept out of your estate. If you already have an irrevocable insurance trust, you’ll want to ensure that you comply with any annual tax requirements (e.g. "Crummey Notices", Gift Notices, or Gift Tax Returns).
- Proper Funding of Your Trusts. A revocable trust needs to have proper “funding” which is lawyer-speak to say that certain assets should be “retitled” into the name of the trust, so that the trust controls your assets. For example, if you've opened new investment accounts or acquired more real property, you might need to retitle them into the name of your trust - or if you’ve set up new life insurance policies or retirement accounts, you might need to update your beneficiary designations.
- Other Events. Changes in tax law, inheritances, employment, educational needs, and state-to-state relocation can create otherwise unexpected reasons to revisit your estate plan. At a minimum, consulting your estate attorney is a sound idea.
While there's a cost associated with revisiting and/or revising your estate plan, the greater cost is usually in leaving it untended, and that cost can be both very tangible and quite personal. Most estate planning attorneys offer an annual maintenance plan or an annual review meeting to help offset these costs, reduce the guesswork, keep your estate plan up to date, and deliver peace of mind. An estate maintenance plan can provide you the necessary push to ensure you do the regular checkups a sound estate plan really requires, while spreading the costs over a period of time, with a regular, predictable annual fee. It's your estate attorney's way of proactively looking out for you, and helping you look out for yourself and your loved ones.
All the best,
If your kids are grown and you are still living in a large, empty nest, downsizing is a natural consideration, especially when the kids and grandkids don’t stay overnight on a regular basis. Downsizing before retirement is a growing trend for people who are ten years or less from retirement. Downsizing may be a beneficial part of your estate planning, especially if you have a considerable amount of equity. Downsizing to a smaller home is a quick and easy way to save money and stretch your retirement funds.
Financial Upside of Downsizing
Reducing your housing costs is one of the quickest ways to increase your retirement savings, because the less money you have locked into your housing, the more money you will have to invest or put into savings. For example, if you sell a home valued at $2,000,000 with a paid in full mortgage and move to a $1,000,000 condo, after transaction costs, you may have approximately $750,000 extra to add to your retirement fund. If you live in a home where you are still paying a mortgage, moving to a smaller home can greatly reduce your monthly housing payment. A smaller home is also less expensive to furnish, maintain and heat/cool. Next to the mortgage payment, utility bills are typically one of the most expensive costs each month, but a smaller home or condo can often save you $20,000 each year or more. Renting a home, apartment or condominium can save you even more money, because you will not be responsible for property taxes - and renters’ insurance is significantly less expensive than homeowners’ insurance.
Emotional Downside to Downsizing
There are obvious downsides to downsizing such as leaving the home you are familiar with and leaving your friends and neighbors. There is an emotional bond to the home where you raised your family and spent some of the happiest times of your life. If you are considering downsizing from the family home, you may experience resistance from your children. However, for as many downsides as there are, if you are seriously considering downsizing, you have to take into consideration what benefits outweigh the disadvantages. Moving in general can be a stressful situation for anyone, but when you are downsizing you will not only be moving, but will most likely need to get rid of stuff. The new home will have less space and it can be emotionally difficult to sell or give away the items you have collected over the years.
Emotional Upside to Downsizing
The bottom line for most people is there are more advantages than disadvantages to downsizing. Moving to a smaller home means less clutter, a feeling of freedom, new opportunities and meeting new friends. When you have fewer responsibilities regarding your home, you have more opportunities to do the things you always wanted to do after retirement, such as traveling. If you move into a condominium or an apartment, there are usually a vast array of amenities that come with your new home such as a pool, exercise facilities and community gatherings. Moving to a new, smaller home is a great opportunity to start fresh and redecorate to your taste as opposed to what is best for the kids. Most people experience less stress and a greater peace of mind when they no longer have large spaces to clean, a lower or no mortgage and reduced utility bills, as well as more money in their retirement kitty.
Once you have weighed the advantages and disadvantages of moving to a smaller home, it’s time to put everything together. Before you make any rash decisions, it is important that you sit down with your spouse, kids and grandkids to talk about your ideas. It is also important to meet with your financial planner to weigh the financial upsides against the financial downsides and to find out what type of financial plan best suits your needs. When searching for a new home, not only should you know whether you want to buy or rent, but it is vital that you know what is going to be important to you in the new house. For example, downsizing may mean giving up extra bedrooms, but you can still have a gourmet kitchen. The decision to downsize can be an emotional decision, even when it’s the most rational alternative, so it is important to sort through your emotions and consider the benefits, which can be significant.
All the best,
Many of my clients are concerned with confidential information and trade secrets in their businesses. Even if it happens to be a very small, family-run business, doing everything you can to make sure you have established and protected all potential intellectual property, including confidential information and trade secrets, can have a BIG impact on your estate. You must consider the value of the business assets and the legacy of your company secrets. Businesses run the risk of losing clients and profits if they don’t have a process for establishing and protecting confidential information, trade secrets, and other intellectual property.
Resource:Naomi Fine, who can boast having almost 30 years' worth of experience in the confidentiality field, is a leading voice of authority on intellectual property rights. Her new book, 'Positively Confidential', is a comprehensive 10 step guide to managing confidential information and intellectual property rights. It provides a mechanism for every person in the workforce to contribute to their company's success by protecting valuable information and intellectual property (IP). 'Positively Confidential' is thorough enough to meet the needs of any business that has information worth protecting.
Author: Naomi is the founder and president of ProTec Data, which works with an impressive portfolio of Fortune 500 companies, including Apple, Eastman Kodak, Xerox, and Visa. Holding data worth billions, these firms have tight protocols for maintaining privacy and protecting their patents. Naomi has also been a legal consultant, focusing on legal issues surrounding intellectual property rights and computer security.
Program: The 'Positively Confidential' intellectual property protection program’s techniques have also been patented. This means the information it contains cannot be found elsewhere, making it one of the most valuable business resources available today. This is the same information that has made Naomi a popular keynote speaker at live conferences and seminars like the American Corporate Counsel Association and the Golden Gate University's Information Security Certificate Program.
The Positively Confidential program is presented on a step by step basis for even readers with minimal experience. Naomi's background as a business attorney makes the book a sound resource. Each of the ten steps have a proven history of success, and case studies make the narrative easy to absorb.
image credit: hcamag.com
All the best,
Most people understand the need to protect, and assign, their assets after their death. They know who will care for their children or pets, who will receive the family heirloom brooch, and who will inherit their financial assets. In this day and age, however, there is a new category of assets to consider: digital assets. Internet users should be considering what will happen to their digital assets, including social media accounts, email accounts, online document storage, and other resources, after they die.
A list of digital assets should be included in your estate plan. Consider how you will provide your survivors with a list of account locations, usernames, and passwords. Begin by making a list of all the accounts you have opened. Consider listing emails, social networking sites, photo sharing and editing platforms, online document storage or hard drive backup services, online banking, digital stock portfolio information, and more. Talk to your estate planner about what services they provide or suggest, and remember to update the list often, at least once every 30 days, or whenever you update passwords or open new accounts.
After making a list of your digital assets, decide what you want done with those assets. Should the social media page be updated and allowed to continue "in memoriam?" Should only your partner or children have access to your online journal and financial information? Make a list of how you wish each account to be dispensed, which may include allowing them to continue, transferring ownership, or canceling services. Understand that some services, like Facebook, will provide loved ones with a reproducible digital copy upon request, and that restrictions can be placed on each account, to meet your post-mortem request, but these things can only be done if you have left thorough instructions.
Unfortunately, there is no perfect solution for how to transfer password information to your loved ones. Any method will put the security of your accounts at risk, so consider the options and select one that you can live with. A single password and username can be left, for a service like google docs, where a master list is complied, a list can be left with the estate planner, a physical list can be locked in a safe or safety deposit box, or password services, like Legacy Locker, or Dead Man Switch can be used to transmit password information. Ultimately, how passwords are communicated is a matter of personal preference, and comfort.
image credit: nigerianreviews.com
All the best,
Continued uncertainty due to Congress's delays
At just about this time last year I posted a blog article called What to Expect of the Estate Tax in 2011. Well, another year has now passed and the estate and gift tax laws are still in disarray.
As I said last year, one of my primary objectives is to ensure that my clients are comfortable with the estate plan they have formulated. However, the current state of the estate tax law continues to make it very difficult to achieve that objective. Congress continues to delay addressing the federal estate tax issue, and clients continue to be skittish about making estate planning decisions.
Presently (in 2012), a U.S. citizen can give away assets worth $5,120,000 ($10,240,000 per couple) without having to pay any federal estate tax or gift tax (note: non-resident aliens and certain green card holders are still subject to a lifetime limit of only $60,000!).
However, these lifetime exemptions are scheduled to revert to $1,000,000 ($2,000,000 per couple) at the stroke of midnight on December 31, 2012. The tax rate on gifts over those amounts will also increase from the present cap of 35% to a whopping 55%.
Now is the time to act!
Despite the uncertainty that many of my clients feel as a result of the current federal estate tax situation, if your estate is likely to be worth more than $1,000,000 ($2,000,000 if you're married), now is the time to act: every dollar you give away this year (while the exemption is high) is one less dollar on which your heirs will pay taxes. Of course, you need to keep enough assets so that you don't run the risk of running out of assets yourself. But assuming that you're not likely to run out of money during your own lifetime, you can make sure your heirs aren't stuck with paying taxes needlessly.
If you're concerned that your beneficiaries are too immature to be able to handle a windfall, you can make the gifts in trusts for their benefit.
If you plan to make large gifts this year, I urge you to act quickly ... although it is unlikely that Congress will pass an estate or gift tax bill before the election, they might. And if they lower the lifetime exemption, you will lose out on the opportunity to pass these assets along tax free.
In addition, as we come closer to the end of the year, more people will be scrambling to lock in these exemptions by making large gifts. Based on my present volume of work, I anticipate that anyone who hasn't made an appointment for advanced gifting within the next 30 days will risk not having it done by the end of this year.
Even if you are not in a position to give away $5 million or even $500,000, I encourage you to take some steps to protect your loved ones. So here are a few basic estate planning tips for anyone who is leery about putting together a comprehensive estate plan.
- Make a Will – At the very least, everyone should have a will. A will allows you to set forth how you want your property distributed upon your death. Having a will insulates your estate from being conveyed according to the laws of intestate (death without a will) succession.
- Take Advantage of Available Exemptions – Each spouse may legally claim up to $5.12 million dollars of property as exempt in 2012. This may change depending on what Congress does. Regardless, you should use every penny of the available exemption to your advantage.
- Maximize Your Exemptions – Creating a credit shelter trust (an "A-B Trust") is one of the best ways to maximize the available estate tax exemption. A credit shelter trust allows you to fund the trust with assets equal in value to the available federal estate tax exemption. Any other assets you have may be left to your spouse free of estate taxes. Your spouse can draw from the trust’s assets while s/he is alive. Upon his or her death, the trust assets will be disbursed to your heirs or other beneficiaries, claiming your estate tax exemption. Your spouse’s estate will also be able to reduce or avoid estate taxes at the time of distribution to his or her beneficiaries.
- Purchase Life Insurance in an Irrevocable Trust – If your irrevocable trust purchases a life insurance policy, the life insurance proceeds will be distributed to the named beneficiaries estate-tax free upon your death. On the other hand, if you purchase a life insurance policy and hold it yourself as the “owner”, the proceeds will be part of your estate and subject to estate tax at up to the maximum tax rate (which is scheduled to revert to 55% in 2013).
- Give, Give, Give – My grandmother always told me that it is better to give than to receive. For purposes of avoiding or reducing estate taxes, this is especially true. You can give up to $13,000 per year to as many people as you like without paying gift taxes. By giving more during your lifetime, you lower your heirs’ and beneficiaries' exposure to estate taxes.
Whether you have few assets or a multi-million dollar estate, you must have an effective estate plan. As a certified estate planning, trusts, and probate law specialist (certified by the California State Bar Board of Legal Specialization), I have the skills and knowledge to handle complex estate planning matters. To schedule a consultation to discuss your estate planning goals and needs, please contact us.
The right move now can save you money in 2012 and beyond. Download our free Year-End Asset Protection Update for Bay Area Families to learn about options to consider before Dec. 31st.
All the best,
A sad case currently before the San Francisco Probate Court, In the Matter of the Fiorani Living Trust, deals with the tragic issue of what happens when a person abuses his position as trustee over a special needs trust meant to protect an individual who has developmental disabilities.
Years of financial mismanagement, theft, and downright despicable conduct took place before action was taken to protect Lucia Fiorani, the person the trust was designed to look after. After a concerned relative began asking questions about what was going on with the money Fiorani’s parents had left for her care, the extent of the abuse came to light. Claims against those responsible have been filed under California’s elder abuse and dependent adult abuse statutes to attempt to right the wrongs that were done.
Millions of dollars and property in the Russian Hill neighborhood are at stake as the case continues to work its way through the court system. The lesson for parents and other loving relatives is clear: take care when establishing a special needs trust.
By way of background, special needs trusts are often created for those who lack the capacity to handle their own financial affairs. They can be especially helpful for people with mental or physical disabilities who would lose public benefits (such as Medicare, Medi-Cal, or SSI) as a result of receiving an inheritance or receiving the proceeds from a lawsuit.
Special needs trusts ("SNTs') can be established for children or adults who have problems that make them unable to provide for themselves financially and who lack the ability to pay for their own medical care, food, shelter, and other basic needs. Typically, SNTs are established for people with mental or physical disabilities, health conditions,or the types of personal problems (for example, an individual with substance abuse problems) that might result in their needing public assistance now or in the future.
As illustrated in this case, there is no upper limit on the amount of money and property that can be put into a special needs trust for a loved one's benefit. Many people even use life insurance policies to fund these kinds of trusts.
Special needs trusts, when constructed appropriately, can help protect the disabled person from being taken advantage of and losing the money that is intended for their benefit.
Such trusts offer a way to hold assets for your loved one, while at the same time preventing him or her from being disqualified from receiving Supplemental Security Income (‘SSI’) or Medi-Cal. Although your loved one is named as the beneficiary of the trust, the assets are not counted as his or her available resources because the assets are not within his orher control.
A gift or inheritance that leaves your disabled beneficiary with non-exempt assets in excess of $2,000 is basically a gift to the federal government, as it will disqualify the beneficiary from receiving public benefits until the assets are “spent down” to $2,000 or less. He or she may also not qualify for private health insurance, and could be left paying for his or her medical expenses. Given the high cost of medical treatment, disqualification from Medi-Cal could cause your beneficiary’s inheritance to be exhausted in short order. After that, your beneficiary will be completely dependent on other family members and meager governmental assistance.
To avoid such a situation, you should act now to set up a special needs trust to protect your beneficiary when you’re no longer around to do so. There are many other considerations that must be kept in mind when you are planning for a special needs individual and this article was meant to make you aware of but a few of them. For more information, feel free to contact my office.
See Our Related Blog Posts:
Special Needs Trusts: Estate Planning Strategies for the Special Needs Family
Asset Protection and Rising Financial Abuse of the Elderly
All the best,