Is Your Estate Plan a Trick or Treat for Your Loved Ones?

Failing to Appoint Trusted Decision Makers

While Halloween, The Exorcist, or The Shining may top your list as some of the scariest horror films ever, I Care a Lot is the stuff of real-life nightmares. The movie I Care a Lot tells the story of a con artist named Marla Grayson who makes a living by becoming the court-appointed guardian of vulnerable elders who she places in a nursing home, where they are sedated and left unable to manage their affairs. Meanwhile, Marla sells all of the elderly person’s belongings and property and pockets the cash, while the elderly person’s family members watch helplessly. Fortunately, this nightmarish circumstance can be avoided by doing one simple thing.

TRUST IS KEY

Choose someone who has your best interest in mind.

By naming trusted decision makers in your estate planning documents, particularly in financial and medical powers of attorney, and updating these documents regularly, you can avoid being placed at the mercy of a court-appointed guardian like Marla Grayson. A power of attorney allows you to appoint someone to make financial and medical decisions for you when you are unable to make them for yourself. You can customize your choices by appointing one person to make financial decisions and another person to make medical decisions. You can even choose backups to act as alternates in case your first choice cannot or will not act.

Unfortunately, if you do not choose someone to be your decision maker, or if the person you have chosen cannot or will not act, the state may choose someone for you. This person will have extensive authority to act on your behalf, but at this point, you will have no say in who that person should be. Sadly, the person chosen by the court could be a family member who you do not want making decisions for you or a court-appointed person with bad intentions, such as Marla Grayson. For example a lot of people choose their oldest child because they feel like it’s the right thing to do…but sometimes the oldest child is on a power trip and withholds information from the other siblings, steals money from trust, creates conflict etc. I’ve seen this too many times, and I don’t want you to go through it too! With the odds of becoming incapacitated stacked against you, this is not something you want to leave to chance, particularly when the solution is so easy.

You can avoid a real-life nightmare by taking the simple step of creating or updating your power of attorney. We know how important it is to select the right person to be your trusted decision maker, and we would be happy to help you create or update this important piece of your estate plan.

New Medi-Cal Rules You Need to Read

California recently changed the asset limits (not the same as Medi-Cal income limits) to qualify for Medi-Cal – California’s Medicaid program. In the past, a single person who had more than $2,000 of property could not receive Medi-Cal; that asset limit has been raised to $130,000 for senior citizens, people with disabilities, and a few other special groups.

What is Medi-Cal?

Medi-Cal is a combined federal and California State program designed to help pay for medical care for public assistance recipients and other low-income persons. Although Medi-Cal recipients may receive Medicare, the Medi-Cal program is not related to the Medicare program. Medi-Cal is a need- based program and is funded jointly with state and federal Medicaid funds.

SSI and other categorically-related recipients are automatically eligible. Others, whose income would make them ineligible for public benefits, may also qualify as “medically needy” if their income and resources are within the Medi-Cal limits (current resource limit is $130,000 for a single individual). This includes:

• Low-income persons who are 65 or over, blind or disabled may qualify for the Aged and Disabled Federal Poverty Level Program

• Low-income persons with dependent children

• Children under 21

• Pregnant women

• Medically indigent adults in skilled nursing or intermediate care or those who qualify for Medi-Cal funded home and community-based waiver programs.

The following property is generally exempt and therefore not counted in determining Long Term Care Medi-Cal eligibility:

• The home: totally excluded, if it is the principal residence. The applicant must state an “intent to return to the home.” Includes mobile home, houseboat, or an entire multi-unit dwelling as long as any portion serves as the principal residence of the applicant.

• Other real property: may be excluded if it is used in whole or in part as a business or means of self-support (you should see an attorney if you have other real property).

• Household goods and personal effects: totally exempt.

• Jewelry: for a single person, wedding, engagement rings and heirlooms, and items of jewelry with a net market value of $100 or less are totally exempt; for spouses, there is no limit on exempt jewelry for determining the institutionalized spouse’s eligibility.

• One car is generally exempt if used for the benefit of the applicant or if needed for medical reasons.

• Whole life insurance policies with a total face value (also called “combined death benefit”) of $1,500 or less.

• Term life insurance: Totally excluded.

• Burial plots: totally excluded, includes headstone, crypts, etc.

• Prepaid irrevocable burial plan of any amount and $1,500 in designated burial funds. These designated funds must be kept separate from all other accounts.

• IRAs and work-related pensions: if in applicant’s name, the balance of the IRA or the pension is considered unavailable if the applicant is receiving periodic payments of interest and principal. If in the spouse’s name, the balance of the IRA or pension is totally exempt.

• Non-work related annuities: the balance of certain types of annuities may be exempt (see CANHR’s fact sheet, “Medi-Cal for Long Term Care” for more information.) You should see an attorney if you are considering buying an annuity – call CANHR for a referral.

• As of 7/1/2022, the state raised the Medi-Cal asset limit for an individual to $130,000, and $65,000 for each additional family member.

• Community Spouse Resource Allowance (CSRA) for 2022: the spouse at home can keep the first $137,400 in assets, and may be able to keep more if his/her income is below the Minimum Monthly Maintenance Needs Allowance (MMMNA).

If you have any questions about MEDI-CAL or planning for incapacity, please reach out to our office. We’re here to help you! Call us: 714-451-5766

Information came from: http://www.canhr.org/factsheets/medi-cal_fs/html/fs_medcal_overview.htm

REPEAL PROP 19

Dear Clients, Colleagues, and Friends:

If you would like to sign the petition to repeal Prop 19 and ensure parents can pass their properties to their children without triggering reassessment of property taxes (usually a huge tax increase)  - You can sign at my office today 4/13, 4/14, or 4/15 before noon.

I apologize for the late notice as I wanted to check with the State Bar and ensure I am allowed to collect signatures. I have confirmed that I am, so please come to my office during the times noted above if you would like to sign this petition. 

I have seen this new law have such a negative impact on families that I want to try and do my part to help.

The Howard Jarvis Taxpayers Association is sponsoring this ballot initiative and its deadline to collect signatures on official petitions to qualify the initiative for the ballot to repeal Prop 19 is April 15, 2022.

If you cannot make it to my office, visit this site to find out where you can go to sign the Petition: https://reinstate58.hjta.org/ 

If you would like more information about Prop 19 - please watch my webinar here.

Feel free to share with your friends! 

We can all work together to protect Prop 13 and our homes for our children!

If you have questions about Prop 19, Wills, Trusts, or estate planning - please contact me at 714-451-5766.

Thank you so much.