Berge & Berge, LLP Blog

Friday, January 29, 2016

Changes To The Eligibility Requirements For First Party Special Needs Trusts

What terms must be found in a Special Needs Trust in order for the beneficiary to be entitled to government benefits?

A Special Needs Trust (SNT) is a legal instrument used for the benefit of individuals who cannot support themselves due to a disability. Assets are held in the trust and not by the beneficiary making the disabled person eligible for various types of needs based government benefits such as Supplemental Security Income (SSI) and Medi-Cal. Currently, the Social Security Administration (SSA) is reviewing these trusts with stricter scrutiny. The agency will now require SNTs to contain certain terms in order to qualify for needs-based benefits.

These changes have been made with regard to first party SNT’s. A first party SNT is one that is set up by a relative or pursuant to a court order, but are funded by assets that belonged to the beneficiary him or herself. According to federal law, assets that remain at the termination of a first party SNT must be used to pay back the government for any benefits that were provided, particularly SSI and Medi-Cal.  Now, trust terms must actually provide that all states will be paid back with remaining trust assets, not just the State of California. 

Another change made by the SSA is that SNT trusts must actually be set up by a relative or pursuant to a court order, not by an agent of the disabled person, even one that is related.  Lastly, the SSA has also become stricter in enforcing the “sole-benefit rule” which means that trust assets can only be used for the benefit of the disabled party.  Previously funds could be used for the indirect benefit of the disabled person, such as to pay for a person to visit him or her, this is no longer an option.

Any trusts that have been previously approved by the SSA are safe unless they are subject to changes via an amendment. 

Deciding whether to use an SNT and then drafting one that is appropriate is a decision that is best made with the guidance of a skilled elder law and special needs planning attorney.  

Thursday, January 21, 2016

Preparing to Meet with Our Estate Planning Team

If you surveyed the country, you would probably find more people who would like to have a root canal without anesthesia than would like to talk about, or even think about, their end of life plans. Nobody likes to think about death. We get it. That’s why we at Berge & Berge LLP ask our clients to do some information gathering and soul-searching before they come into our offices for their first meeting -- it significantly cuts down the amount of time they have to spend sitting in our office thinking and talking about death.

If possible, you should gather the following information before your first meeting with our estate planning team.

Past Estate Planning Documents

If you have had an estate plan done in the past, please bring a copy of that plan to the meeting. We will discuss what changes you would like to make, and make sure that the new plan we make is the one that is followed after you die.

Family Information

You should have the following family information available when you come in for an estate planning consultation:

  • Full names, birth dates, and contact information for all immediate family members
  • Name and contact information of the person you want designated guardian of any minor children, and perhaps an alternate if that person has passed or is incapacitated  at the time of your death
  • Any pertinent information about ex-spouse(s)
  •  Medical or other pertinent information about any family  members with special needs

* FYI - If you have a child that your spouse doesn’t know about, we are not going to be able to keep your secret for you

Financial Information

A major part of estate planning involves your asset distribution, so you must bring the following financial documents to an estate planning consultation:

  • List of all financial accounts: checking accounts, savings accounts, investments, retirement or pension plans, etc.
  • Social Security account information and most current statement

(If you haven't already done so, register with the Social Security Administration before making an estate planning appointment, since we need to be able to access information about your projected Social Security benefits)

  • Do you have a life insurance policy? If so, bring it in with you.
  • If any of your accounts are “payable on death” bring that information in.
  • Information about significant debts you owe, or that are owed to you, should be gathered as well.
  • A good starting place for gathering this information is pulling out your last few tax returns.

Property Information

  • Make a list of any properties you own or have an interest in. If you only have the addresses, that is okay, but if you have the legal property description and a copy of the most recent tax assessment that is even better.
  • Are any of the properties mortgaged or otherwise encumbered?
  • Are there any specific items of personal property that you have special plans for? Personal property includes things like jewelry, coins, arts, antiques, or vehicles. If you have specific items that you want to pass on to specific people or organizations, make a list of the items that includes information about the items location, full names and contact information of the persons or organizations you would like to pass each item to, and a precise description of the item. You might even consider taking a picture of each item with your smart phone or a camera and bringing those photos along with you.

Business Information

  • If you own all or part of a business, please bring along information about the business(es), including business addresses, tax id numbers, the past few years of tax returns, and any documents specifying your ownership interest.

Other Information

  • Are there any organizations (like a church, charity, or college) you want to leave a donation to? If so, we’ll need their name, address, and contact information.
  • Who do you want to be in charge to carrying out your plan? Think of a couple different people, and gather their names, addresses, and contact info.

We know this is a lot of stuff to throw at you, and that you probably don’t have all the information on this list at your fingertips. Don’t let this discourage you from setting up an estate planning appointment! Our estate planning experts will make the estate planning process as painless for you as possible. Contact Berge & Berge LLP today to schedule your first estate planning meeting.

Wednesday, December 23, 2015

FAQ About Charitable Gifting & Bequests

I am considering a charitable donation in my estate plan – is this easy to arrange?

Charitable donations can be a wonderful component to a comprehensive estate plan – particularly for a testator with special ties to a particular organization. The following addresses some of the most common questions with regard to planned charitable giving:

FAQ: What is meant by “planned giving?”

Planned giving is the systematic method of advancing assets for the benefit of a tax-exempt corporation, and most often refers to arrangements made in an estate plan. However, planned giving can occur prior to death, and is often used as a way to minimize exposure to estate taxes.

FAQ: What are the tax benefits to leaving money to charity in an estate plan?

It depends. First, it matters whether the estate will be subject to an estate tax, which is dependent upon the size of the estate as of the date of death. Currently, an estate must be valued above $5.73 million in order to be subject to the federal estate tax. In this instance, leaving assets to charity can work to reduce the value of the estate – and hopefully avoid taxation altogether. For the vast majority of estates not quite reaching this valuation, gifting to charity will not necessary offer any tax incentives. However, there are a number of other non-quantifiable benefits to leaving money to charity by will or trust.

FAQ: What is the best way to set up planned giving?

The best vehicle for arranging testamentary charitable donations will vary depending on the size of the gift, the frequency of the donations (some people gift in increments) and the specific organization’s needs and wishes. While leaving a cash gift by Will is certainly possible, there are a number of other options including a charitable remainder trust, charitable gift annuity, or charitable lead trust. Also, gifts of real property may be gifted by a payable-on-death deed, which will transfer out of probate and directly to the charity.

Contact an experienced estate planning attorney today!

If you are considering making a testamentary donation to charity, please consider speaking with the knowledgeable estate planning professionals of Berge & Berge, LLP: 408-389-6980.

Sunday, December 13, 2015

TRIAD Program to Educate Seniors Makes Them Less Fearful of Crime

How does the TRIAD program educate senior citizens to feel safer about reporting crime?

In 1988, TRIAD, a pilot program designed to assuage the fear of reporting crime that persists among senior citizens, was started in Louisiana. The organization began as a partnership of AARP (American Association of Retired Persons), IACP (International Association of Chiefs of Police), and NSA (National Senior Adults) with the intention of educating and protecting the elderly from crime.

People generally feel more vulnerable as they age. When confronted by the possibly of criminal behavior, they are even more likely to become frightened than the general population. As an example, one 65-year-old woman in Iowa explained that she was afraid to report the odd comings and goings, both day and night, at her neighbor's house for fear of retaliation. According to her perception, the neighbor himself was a "scary person," made all the more frightening by the suspicious activity at his home. She felt sure there was some illegal activity going on, probably drug-related, but she was afraid to act.

Ironically, shortly after she got up her courage to report the neighbor to the police and he was subsequently evicted, a new branch of the TRIAD program opened near her home in Des Moines. After enrolling in the program, and getting to know the local police, she became convinced of the necessity and safety of contacting law enforcement should a similar situation ever arise again.

TRIAD has found that crimes against seniors are tremendously underreported. It is estimated by authorities that only about 1 percent of such crimes are reported in the U.S. Crimes against the elderly include:

• Telephone scams
• Door-to-door fraudulent schemes
• Financial exploitation or physical abuse by caretakers

Tragically, in many cases, the financial exploitation or physical abuse is inflicted by family members or trusted associates.

Reasons Senior Citizens Are Targeted

Criminals, often savvy as well as cruel, target older individuals just because these people are more vulnerable. Reasons the elderly may be easier prey than younger adults include the facts that they are:

• Frequently isolated and lonely
• Fearful that they may be suspected of suffering some cognitive loss
• Ashamed that they have taken in
• Do not want to report exploitation that will result in prosecution of a loved one
• May suffer from dementia and be unaware that they have been victimized

Seniors who attend TRIAD meetings became emboldened as they voice their own concerns and listen to the concerns of others. Law enforcement authorities encourage attendees not to be reluctant to contact police if they feel unsafe, have knowledge about a crime, or simply notice a suspicious activity. They also explain ways to contact the authorities anonymously.

If you have been the victim of a crime or has witnessed suspicious activity, you should feel free to report the criminal activity to the proper authorities. An experienced elder law attorney can guide you through the process.

Thursday, December 10, 2015

Education Is Best Method to Avoid Senior Scams

What should I know to avoid being victimized by a senior scam artist?

There are many types of scams directed at seniors and there seem to be more all the time. In order to protect yourself and your loved ones, the best thing you can do is familiarize yourself with the various fraudulent schemes that abound. After all, forewarned is forearmed.

Types of Scams and How to Avoid Them

Health Insurance Fraud

Because health insurance becomes more and more essential as we age, and because the many type of  policies and related regulations can be very confusing, it is an area frequently targeted by scam artists. Here are some ways to avoid being victimized:

  • Never sign blank insurance claim forms
  • Carefully review any insurer's explanation of benefits statements
  • Question any perceived discrepancies on forms you receive
  • Do not do business with door-to-door salespeople
  • Understand what portion of your medical provider payments will be out-of-pocket
  • Only give Medicare or insurance identification information to medical providers
  • Keep accurate records of medical services and equipment you receive

 Medicare Scams

Remember to protect your Medicare number as you do other sensitive personal information.  Keep yourself from being victimized by Medicare scam artists by:

  • Not allowing anyone else to use your Medicare number
  • Being cautious if a merchant tries to sell you something supposedly reimbursable
  • Review Medicare statements to make sure they are correct
  • Report suspicious activities to 1-800-MEDICARE

Telemarketing Scams

Older people, who are more likely to be at home and eager for a distraction, may be more easily victimized by telemarketers. Take the following steps to protect yourself:

  • Don't order from a company that contacts you by phone, especially an unfamiliar one
  • Always request written material before making a charitable contribution
  • Always take time to consider --spur of the moment decisions are risky
  • Know the name, business address, and phone number of whomever you deal with
  • Report any fraudulent scheme to local law enforcement, state or federal authorities

Home Repair or Contractor Fraud

Another type of fraud perpetrated against seniors involves home repair or construction. In order to protect yourself from fraudulent contractors and service providers, do the following:

  • Check references
  • Consult with family members,trusted neighbors or friends
  • Take the time to make an informed decision
  • Read all contracts carefully before you sign them
  • Be aware of your options regarding refunds and cancellations

If you or an elderly loved one has been taken advantage of by a scam artist, the worst thing you can do is to do nothing. Don't hesitate to report fraudulent schemes to Adult Protective Services or law enforcement agencies. To further protect yourself, contact a skilled elder care attorney in your location.

Monday, November 23, 2015

Basic Facts about Protecting Your Estate If You Relocate

What estate planning facts should be considered when you relocate?

Life, as we all know well, but manage to deny a good deal of the time, is unpredictable. You may have engaged in careful estate planning, keeping in mind all the things you've been told are essential: to avoid probate by having a will, to set aside significant assets for those you love, to protect your assets from taxes as much as possible. Nonetheless, unexpected events can impact your careful planning and you have to be prepared to handle change.


One significant life event you may not have prepared for is a change of location. Economic, work-related, or familial reasons may cause you to make a geographical move. Even though you have been assured that "most likely" your documents will remain legally enforceable in the new jurisdiction, you want to make absolutely certain that this will occur. This is the time to consult with a local estate planner who can help you to review your existing plans and make any necessary changes.

Things to Consider

It is important to remember that although most laws are consistent throughout the country, some are not. There are, for example, common law states and community property states. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is an opt-in state in which both parties have the choice of making their property community property by signing an agreement to that effect.

In community property states, all money earned by either spouse during a marriage, all property bought with those earnings, and all debts incurred during that marriage belong equally to both parties. Unless otherwise established in a will, when one spouse dies, the other half of everything owned by the couple goes to the surviving spouse.

When you relocate, it is necessary to take the laws of the state you are moving to into consideration. In common law states (the other 40 not previously mentioned), property ownership is determined by whose name is on the document of ownership, such as a deed or a title. In such states, you are free to leave your property to whomever you choose, although your spouse has the right to claim a certain share after your death.

Written agreements, such as prenuptial or postnuptial documents can separate some or all of community property. If a couple holds title to property jointly, they may be able to avoid probate court proceedings when one spouse dies.

Differing Tax Thresholds

Some states tax the estate of the deceased while others tax the inheritance once it is received by the heirs. All states, however, allow spouses to inherit tax-free. While the federal government taxes estates worth over $5 million, individual states may have higher or lower thresholds. In many cases, gifting, creating trusts and allocating assets are perfectly legal ways of protecting your estate.

In all cases, a geographical relocation necessitates a comprehensive meeting with a reputable estate planning attorney to ensure that your estate will remain protected and will be distributed according to your wishes after your death.

Friday, November 20, 2015

Elder Abuse on the Rise

What can be done to protect seniors from elder abuse?

A lack of caregiver training is contributing to a rise in elder abuse as our society ages. In fact, a recent AARP study found most caregivers received little or no training to conduct services like medical or nursing tasks, such as providing wound care.

What is elder abuse?

The National Center on Elder Abuse defines these incidents as a series of intentional actions that harm or cause a serious risk of harm to an elderly person. As people grow older, the risk for abuse increase. Moreover, older women may suffer more abuse than men.

One fundamental problem is that there is underreporting of incidents of elder abuse, even though there has been an increase in abuse cases being reported. In fact, it is estimated that only one in 14 cases is brought to the attention of authorities. One reason for this is that the caregiver is often the abuser.

This stems from the complex relationships among family members and other pressures that often result in neglect of an aging parent. The pressure of providing (often full-time) care can result in frustration, anger, and even depression that can manifest itself in abuse.

What can be done about elder abuse?

Caring for the elderly can be an emotional challenge and decision-making can be difficult, especially when the parent is unable to participate.

Currently, training is not a requirement to care for an aging loved one, but there are organizations that provide training services for family caregivers. Experts in elder care are also calling for more specialized training in this area.

One critical need is to recognize problems with care transitions for patients being discharged from hospitals to home and long term care facilities. This issue is becoming the focus of lawmakers trying to make these transitions easier for caregivers and safer for patients. In fact, patient care transitions are the focus of legislation (known as The CARE Act) being supported by AARP in a number of states.

Becoming a caregiver requires training to keep aging parents healthy and safe, and incidents of elder abuse may require legal representation.

Saturday, October 31, 2015

Avoiding Prepaid Funeral Scams When Medicaid Planning

I recently received correspondence from a company claiming to help with Medicaid eligibility by offering prepaid funeral services. Is this legit?

When it comes to Medicaid planning, the overall goal is to reduce personal assets either by transferring these assets to a trust, gifting to family, or making exempt purchases. Exempt purchases and transactions are those that do not trigger a penalty even during the 5-year look-back period, and include any of the following:

  • Full or partial payment on any legitimate debt (e.g. mortgage, auto loan, etc.)
  • Purchases of an exempt asset (e.g. an exempt home)
  • Preplanned funeral
  • Preplanned burial
  • Annuities
  • Caregiver costs
  • Maintenance of a non-countable asset (e.g. home improvements to an exempt home)

Of these “spend down” options, one of the most notorious areas for scams involves the concept of a prepaid funeral and/or burial service. While there are many trustworthy and reliable outfits available to help planners prearrange these events, planners are cautioned against working with any companies that seem questionable or aggressive. It is vital to work with a prepaid funeral service provider with a strong reputation in the community. If possible, it is best to obtain a personal referral.

Sound Alternatives

Too often, prepaid funeral plans require monthly payments that, in the end, amount to more than the actual cost of the average funeral. In addition, these plans may include costly and wasteful “service” or “account maintenance” fees that create an unnecessary burden on the decedent’s estate when it comes time to prepare for the memorial services.

As an alternative, planners may be able to direct funds into an interest-bearing account for purposes of pre-paying funeral costs and expenses. By designating a beneficiary as payable-on-death, family members can rest assured the process is handled with ease, and preplanners can rest easy, knowing the process is being taken care of in a cost-effective manner.

Thursday, October 22, 2015

Governor of California Signs Doctor-Assisted Death Bill for Terminal Patients

What are your rights concerning ending your life when it has become unbearable as a result of terminal illness?

The question of a patient's "right to die" has been controversial for a very long time. A few days ago, on October 5, 2015, California Governor Jerry Brown signed the End of Life Options Act into law. There are now five states in which physicians may legally prescribe a lethal dosage of medication to terminally ill patients who request it.

There are certain stipulations that must be met in order for lethal medication administration to be legal in the state. These include that the patient making the request must:

  • Be terminally ill
  • Be a competent adult, capable of making medical decisions
  • Voluntarily ask for and self-administer the drug
  • Be diagnosed as terminal by two independent physicians
  • Make two oral requests for the medication, at least 15 days apart
  • Make a witnessed written request and sign it 48 hours before taking the medications

Several groups, including right-to-life groups, religious groups, and groups advocating for the disabled, have opposed the measure. It has been determined that individual hospitals and doctors may refuse to offer the lethal medications.

A recent survey demonstrates that, despite vigorous opposition from the Catholic Church, certain ethnic groups, such as Hispanics, and the American Medical Association, the majority of people polled, even members of these opposing groups, supported the new law. Fifty-five percent of Republicans and 70 percent of Democrats responded favorably to the freedom to choose death under extreme circumstances of pain, incapacity and terminal illness.

Governor Brown, a former Jesuit seminarian, reported that he had carefully read opposition documents and spoken to many trusted advisors before coming to the decision to support this law. Eventually, he reports, he decided that if he were at the end of his life and in severe pain without hope of survival, he would want the option of self-administering lethal medication and that he did not believe the state should deny that option to anyone in such a dire situation.

In considering our own mortality, as we all have to at some point, we are inevitably confronted with some major decisions concerning the distribution of our assets and the protection of our loved ones. If you are interested in being proactive in regard to your estate planning, please contact one of our experienced and compassionate attorneys at The Law Offices of Berge & Berge, proudly serving the South Bay area of California at (408) 389-6980.

Saturday, October 3, 2015

Understanding the Risks and Benefits of Reverse Mortgages

I am considering a reverse mortgage as a retirement planning tool. Is this wise?

A reverse mortgage is a retirement planning tool gaining considerable recent notoriety, due in part to the uptick in advertising featuring prominent senior-aged celebrities and former politicians. Financial experts, however, are growing increasingly wary of this retirement planning option, with many warning seniors to select this option only as a last resort.

A reverse mortgage is a secured financial transaction available for seniors aged 62 and older. In exchange for future equity in the senior’s home, a bank will forward a lump sum of tax-free cash to the homeowner. In general, the homeowner need not repay the balance until death, or may elect to repay the mortgage in monthly installments.

The problem with reverse mortgages most often occurs when the homeowner passes away and the promissory note becomes due immediately. In this scenario, children are often surprised to learn that their parent’s estate now owes a sizable debt – oftentimes up to the entire value of the home. To satisfy the debt, the estate usually must sell the home and pay the balance of the outstanding mortgage, leaving surviving heirs with nothing.

In another scenario of growing concern, one spouse takes out a reverse mortgage without the other spouse, who may be too young to qualify. Upon the death of the first spouse, the note becomes due and the surviving spouse must either find a way to repay the balance or sell the property all together.

While a reverse mortgage can be a seemingly simple way to gather cash upon reaching retirement age, it is not without risk. In many instances, there may be better options to help ensure surviving loved ones are not left without an inheritance or – in the worst case scenario – without a home.

If you are considering a reverse mortgage and would like to discuss your options, please do not hesitate to contact the Law Offices of Berge & Berge, LLP, serving the South Bay area of California, at 408-985-9918.

Sunday, September 20, 2015

Including a Special Needs Trust Within a Revocable Living Trust

How Is It Best to Protect a Beneficiary Who Has Special Needs?

There are a number of reasons why a family may wish to set up a special needs trust as a sub-component of their estate plan. As the name suggests, special needs trusts are designed to offer financial protection for a beneficiary who suffers from a physical and/or mental disability and – in most cases – is receiving supplemental income from the state or federal government (e.g., Social Security and/or Medicaid).

If a testator were to leave a lump sum of money outright to an individual with special needs, this dramatic increase in assets could lead to the unintended result of the beneficiary losing his or her monthly benefits – or at least experiencing a significant decrease in them. In such a case, the testator's intention to offer assistance to the beneficiary would be thwarted, causing the beneficiary to lose significant funding. To avoid this result, a special needs trust can help funnel money and assets to an appropriate place, thereby providing financial security to the beneficiary while still helping the beneficiary maintain the supplemental income they are entitled to.

When setting up a special needs trust, it is vital to select a trustee to help the beneficiary manage the trust assets in accordance with the established guidelines set forth by entities like the Social Security Administration or Medicaid. Generally, the funds derived from a special needs trust must be used for purposes of maintaining the beneficiary’s health and wellness, and are not to be used for purposes already covered by the recipient’s monthly income. Choosing a trustee who is familiar with the regulations – or is willing to seek guidance from an experienced professional – is the best way to ensure that the bequest is honored and the beneficiary is protected.

Likewise, the trustee must ensure the beneficiary does not have unfettered access to the funds, as this could trigger a reduction or elimination of government benefits.

If you are considering a bequest to a special needs family member and would like to ensure that the special needs trust is handled with careful consideration, please contact the Law Offices of Berge & Berge. Located in San Jose, California, and serving clients throughout the South Bay area, we can be reached at: 408-985-9918.

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