Berge & Berge, LLP Blog

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.

Monday, August 31, 2015

Understanding the Concept of a ‘Springing’ Power of Attorney

When I sign a power of attorney, is it effective immediately, or only upon my incapacity?

A power of attorney is an important – and in many cases, crucial – component to a comprehensive estate plan. In general, the power of attorney appoints an agent to lawfully conduct the financial and legal affairs of the principal as necessary and when needed. When preparing a power of attorney, the principal has the option of making the document effective immediately or at some point in the future. The latter option, known as a “springing” power of attorney, carries significant pros and cons, which an experienced estate planning attorney can help explain.

In most situations, a springing power of attorney becomes effective once the principal has been deemed physically or mentally incapable of carrying on his or her own affairs. This “triggering event” usually requires documentation from a doctor certifying that the principal is officially unable to continuing making prudent decisions.

The benefits of a springing power of attorney generally involve prevention of power of attorney abuse, or unlawful misuse of the document by deceitful agents. In a recent article published by the University of Baltimore Law Review, a prominent estate planning attorney asserted that the springing power of attorney model should be the default under the Universal Power of Attorney rules (UPA), as it works to ensure elders are protected from the agent’s “ability to accumulate power.”

On the other hand, many principals find it more convenient to execute the power of attorney document immediately. Aside from incapacity, there are a myriad of reasons why a power of attorney may be useful. For instance, if a principal is out of the country and needs a document or transaction executed, the agent can conduct these tasks without a finding of mental incapacity by the principal.

In sum, it depends on the principal’s level of comfort with his or her named agents. For more information about this important distinction, contact an experienced elder law attorney today.

If you are considering executing a power of attorney and are not sure about the specifics, please contact the Law Offices of Berge & Berge. Serving successfully as Estate Planning and Elder Law attorneys for clients San Jose, Santa Clara, and surrounding areas, we can be reached  at 408-985-9918.

Monday, August 24, 2015

Does a New California Resident Need to Transfer an Out-of-State Conservatorship?

I recently moved to California with my adult, special-needs child. How do I set up a conservatorship?

Moving to a new state with a guardianship or conservatorship in place can present unique challenges for both the conservator and the ward. Accordingly, it is best to inform the courts of both the old and new jurisdictions as soon as practically possible.. Under California probate laws, this is accomplished by petitioning the court for a new conservatorship. Moving from the jurisdiction of California will require court permission prior to the relocation, as well as consent of all interested parties.

The first step, in most cases, is to seek permission from the court in which the current conservatorship or guardianship was originally entered. Often, this process requires notifying the ward’s next-of-kin of the intended relocation, affording interested parties the opportunity to object to the move on reasonable grounds.

If, however, the court or family members do not take issue with the intended relocation, the conservator (for adults) or guardian (for children) must transfer the out-of-state order to the California court as soon as possible. This is generally accomplished by submitting a completed GC-310 form . This form details the relationship between the proposed conservator and the ward, including whether the conservator has served in the conservatorship role (or similarly-titled role) in the past. The form also details the ward’s approximate assets, and whether the ward is suffering from dementia, in which case additional affidavits and paperwork will be required.

Much like the out-of-state guardianship or conservatorship process in the former jurisdiction, the court in the new location will require notification of all next-of-kin and interested parties, who may raise an objection to the appointment. A probate law attorney can help the proposed conservator implement a temporary conservatorship in California to ensure that the ward’s needs are met during the period in which  permanent conservatorship proceedings are being conducted.

If you are considering moving to or from California and would like to discuss your options in regard to conservatorship or guardianship, please do not hesitate to contact our knowledgeable attorneys at Berge & Berge. Serving clients in and around San Jose and Santa Clara Counties with concern and respect, we can be contacted at 408-985-9918.

Tuesday, August 11, 2015

Center for Medicare and Medicaid Services Likely to do Away With Mandatory Arbitration Agreements

What are my options if I disagree with a decision rendered by a long-term care facility accepting Medicaid?

In many states, the staggering monthly costs of long-term care are approaching $10,000 per patient – prompting the exponential growth of the practice area known as ‘Medicaid planning.’ During the Medicaid planning process, clients are counseled as to the best ways to protect their modest nest eggs from these nursing care costs while staying within the legal guidelines set forth by the Center for Medicare and Medicaid Services (CMS). 

As the number of Medicaid-eligible seniors continues to grow, so too do the number of conflicts that arise between nursing homes and patients – primarily regarding the payment of the outstanding bill, covered expenses, and similar sources of contention. 

Up until recently, patients receiving Medicaid benefits for long-term care were required to sign binding arbitration agreements in the event of conflict. These agreements essentially eliminated a patient’s right to pursue a cause of action in a traditional court of law, which also significantly limited their rights to redress and compensation in the event of fraud, negligence, or breach of contract. 

For years, patient advocates have warned against the use of these binding agreements, pointing out that many do not fully understand what they are signing at the time – and are particularly surprised to eventually find out that they unknowingly waived their right to file a formal lawsuit over issues involving Medicaid coverage. Of course, the opposite argument is that mandatory binding arbitration cuts down on litigation costs for nursing homes, which results in savings for taxpayers overall. 

As of June 2015, CMS announced a new proposed rule that would eliminate mandatory binding arbitration agreements, instead inserting voluntary clauses allowing patients the opportunity to pursue either legal option – which is already the law in California. However, as many legal experts assert, patients still feel compelled to submit to binding arbitration at the time of admissions, believing they have no other option.

However, as part of the proposed rule, nursing homes accepting Medicaid must make absolutely certain that the agreements are drafted in a way that patients can understand the language and fully understand what they are signing. 

For assistance with elder law planning in the Bay Area, including San Jose and Santa Clara Counties, be sure to contact the attorneys at Berge & Berge right away: 408-985-9918.

Thursday, July 23, 2015

Understanding Medicaid Eligibility Rights for Same-Sex Spouses

Now that same-sex marriage is a fundamental right in all 50 states, how will Medicaid eligibility change to ensure same-sex spouses are afforded the same allowances and exclusions? 

Qualifying for Medicaid is often a vital milestone for those in need of long-term care, and generally requires a drastic spend-down of assets in order to meet financial eligibility regulations. Generally speaking, married couples tend to fare better overall when it comes to reducing assets, as the spouse able to remain in the community (known as the “community spouse”) is allowed to continue living in the marital home and receive a modest monthly income. For unmarried same-sex couples, this left them in a predicament in terms of calculating separate assets if they were living in a state that did not recognize same-sex marriage as valid. Now, as all same-sex couples are able to marry – and same-sex marriages are recognized as valid in all jurisdictions – applying and qualifying for Medicaid may take same-sex couples on a new path toward eligibility. 

Benefits of Medicaid eligibility for spouses

Medicaid’s financial thresholds were created with the dual-interest of not only ensuring the beneficiary has exhausted his or her own personal assets before receiving assistance, but also avoiding unnecessary impoverishment of the community spouse. For instance, 2015 guidelines allow the community spouse to maintain $119,000 in assets – a protection not previously afforded to same-sex couples in an unrecognized union. Likewise, state Medicaid authorities cannot initiate a Medicaid lien on a beneficiary’s home if his or her spouse still lives there – another new benefit for spouses. 

Another major benefit now enjoyed by same-sex spouses is that one may transfer assets to the other without triggering a penalty during the look-back period. Before, a transfer between same-sex spouses residing in a jurisdiction that did not recognize same-sex marriage was treated as a general asset allocation similar to a parent-child transfer. Now, same-sex couples can enjoy the same rights to keep their assets in hand as applicants in a traditional marriage. 

If you are considering applying for long-term care benefits, or you would like to speak to a reputable estate planning attorney for additional information, please contact the Law Offices of Berge & Berge, serving the areas of San Jose and Santa Clara County, California, today: (408)985-9918. 

Friday, July 10, 2015

Minimizing Liability for Conservators

I was recently appointed as a conservator in California. What can I do to avoid unnecessarily exposing myself to liability? 

Serving as a conservator is oftentimes a thankless and grueling job. However, the role serves a vital purpose in protecting California’s vulnerable children and adults from risk and harm. As a conservator, it is important to follow California’s guidelines to the letter – particularly with regard to the handling of assets and financial transfers on behalf of the ward, as any improper intentional misconduct could lead to significant liability and loss of the role of conservator.

One of the first steps in serving as a conservator is often obtaining a conservator’s bond – which operates to insure the conservatee in the event of loss. If the conservatee’s next-of-kin, and the conservatee himself, consent to the arrangement, the bond may not be necessary. 

From there, a conservator must notify the ward’s banks, financial advisors, and any other individuals or institutions involved in the assets of the estate. This is accomplished by providing Letters of Conservatorship, which are issued after the conservatorship is officially ordered. Attempting to rearrange assets or otherwise access the estate assets could quickly trigger liability for the conservator. 

From there, a conservator must arrange for an inventory of the conservatee’s entire estate, which must be filed with the probate court within 90 days. Another way to avoid liability is to ensure the inventory is completely accurate and includes all real and valuable personal property belonging to the ward. From there, the conservator must make and follow a Plan for Conservatorship, which will cover the methods and techniques the conservator will use to ensure the assets are properly managed and prudently invested. 

One of the most common ways in which a conservator could face liability to a conservatee’s beneficiaries involves the mismanagement of estate funds. As conservator, one must ensure the conservatee is adequately cared for, has all monthly obligations met, has appropriate medical coverage, and is able to live on a reasonable budget. If a conservator fails to properly maintain the conservatee’s assets and the conservatee begins experiencing harm in the process, considerable liability – and even criminal financial culpability – could result. 

If you have questions about the conservatorship process in California, please do not hesitate to contact the San Jose and Santa Clara estate planning attorneys at the Law Offices of Berge & Berge, LLP today: (408)985-9918. 


Friday, June 26, 2015

Basics of Conservatorship in California

I am concerned about my nephew, who has several special needs and medical issues. He is an adult, but does not have other family members to care for him or help him with finances. What can I do? 

Stepping up to fulfil the role of conservator for a beloved family member or friend is a truly selfless and caring act – however, there are a number of legal implications to consider. 

In California, conservatorship may be awarded to an eligible and qualified adult petitioner for the benefit of another adult who is incapable of managing his or her daily care and/or financial situation. The incapability may be due to a temporary situation or a permanent cognitive or health issue. There are generally two types of conservatorships available in California, which is explained more thoroughly below. Likewise, an interested individual must submit a petition for conservatorship in California probate court, which may invite unexpected objections from other family members. 

Types of Conservatorships in California

A probate conservatorship is the most common, and is governed by the laws of California’s Probate Code. Within this category are two sub-categories known as General Conservatorship and Limited Conservatorship. A General Conservatorship is often appropriate for an elderly individual experiencing mental incapacity, or a younger individual with impairments following a severe accident or illness. This arrangement is generally appropriate for the long-term, and allows a conservator to help the ward with daily living and financial issues. 

A Limited Conservatorship, as the name implies, is appropriate for a ward with a milder developmental disability who is able to care for his or her daily needs and finances to an extent, but may need assistance with more complex issues. This type of arrangement can be short- or long-term, depending on the ward’s needs – and the conservator’s role is much more limited in scope. 

Lastly, a Lanterman-Petris-Short conservatorship is available for the benefit of someone with a severe, irreversible mental illness requiring constant care, monitoring, and medication. These conservatorships are initiated by a government agency, and often under the strenuous objections of the proposed ward. If this is your situation, the county Public Guardian or Public Conservator may be able to help further. 

If you are facing a difficult situation with a loved one and would like to discuss your options under California’s conservatorship laws, please contact the San Jose and Santa Clara County estate planning attorneys at the Law Offices of Berge & Berge today by calling (408)985-9918. 

Friday, June 12, 2015

Funeral Home Refuses To Refund Prepaid Funeral Costs

What should you disclose to your family about your estate?

In 1973, a woman purchased a prepaid full-burial funeral policy from a funeral home in her town. Over time, the documents pertaining to the policy were misplaced and, at the time of her death, the family had no idea the plan existed. The family paid the same funeral home for funeral services for their mother.

The missing policy later turned up amongst the mother's possessions. When the daughter presented the policy at the funeral home and asked for a refund, the funeral director refused. The family got a local news station involved, and the funeral home eventually refunded the service fees but not the full amount of the remaining fee. The news station contacted the underwriter of the policy, which covered the remainder of the fee the family paid for the funeral and associated costs.

Funeral costs are soaring, estimated at approximately $8,000 for burial with a vault, which many cemeteries now require. While prepaid funerals are a morbid issue and talking about death is never pleasant, it is imperative that your family members know your wishes and if you have any of these insurance plans in place or purchased.

Understanding funeral costs and wishes is important when developing an estate plan. A trust and estate attorney can guide you in effectuating your wishes and making them clear to your heirs. The more your heirs know about your wishes and desires for burial, the easier it will be to make decisions and avoid any arguments or disagreements between family members. While your loved ones are grieving, an estate plan helps them to make smart choices based on your wishes.

The Law Offices of Berge & Berge LLP practices exclusively in the area of estate planning. Our attorneys strive to educate their clients and design estate plans that meet their goals. We have been proudly serving the South Bay area for more than 20 years, including San Jose and Santa Clara counties. Contact us today at (408)985-9918 to schedule a consultation.

Friday, May 29, 2015

Top Scams Targeting the Elderly and What to do If You’ve Been Victimized

I’ve received several calls lately that seem somewhat suspect. What are the latest scams I should know about? 

It is a sad reality that scammers from across the globe will stop at nothing to siphon the hard-earned savings of America’s senior citizen population. Fortunately, many of the ongoing scams against the elderly have been identified by authorities and highlighted in the article below. If you suspect you have lost money due to a scam artist, or are worried about the economic integrity of a loved one, be sure to contact authorities immediately. From there, an experienced elder law attorney can help you not only recover some of what you lost, but fortify your estate plan and financial situation to avoid exposure in the future. 

#5: Scams involving healthcare: Medicare, or prescription medication: As the Baby Boomer population ages, the number of reported scams involving Medicare or prescription medication fraud has also steadily increased. Medicare agents will never ask for your personal information over the phone, so be wary of any unsuspected/unplanned phone calls involving one posing as a Medicare employee. Likewise, seniors seeking lower rates on prescription drugs should be careful when shopping online, as there are hundreds of identified prescription drug scammers identified by the FBI. 

#4: Funeral & cemetery plot scams: Pre-paid funeral arrangements can be a savvy way to plan for the future or spend down assets for Medicaid planning. However, there is no shortage of fraud in this industry, and seniors have been duped into forwarding thousands of dollars to a prepaid funeral plan, only for the family to realize years later that the entire set-up was a scam. If you decide upon a pre-paid funeral plan and burial plot, ensure the company is reputable and ask for references before paying any money up front. 

#3: Online scams: Today’s seniors are much more internet savvy than generations past, however it is not uncommon for scam artists to use pop-up advertisements, phishing scams, or email blasts to entice users to offer sensitive information, including social security numbers and credit card information. Never enter this information into a website unless you know exactly what you are purchasing, and always ensure the site is encrypted and secure. Likewise, never send personal information via email, as this could be easily intercepted by hackers. 

#2: Reverse mortgage scams: For some, a reverse mortgage makes financial sense. However, this option is only available to senior citizens, making it a prime industry for fraud. Scammers love to target not only a perceived vulnerable population (i.e., the elderly), but those with substantial assets who own their own home. In a fraudulent reverse mortgage transaction, the fraudster will entice the homeowner to transfer the deed to the property in exchange for a home “elsewhere” or a lump sum of cash. Shortly after the transfer is complete, the victims realize the entire setup was a fraud, and have no home to which to return. 

#1: Telemarketing scams: In one of the oldest tricks in the book, telemarketers will prey on lonely or isolated seniors, living alone, who seem eager to talk to another person. The scammer will ask questions about their grandchildren or hobbies in order to gain their trust, then encourage them to make a large purchase over the phone. After providing credit card information, the victim is out hundreds (or thousands) of dollars, and the scam artist is long gone. 

If you are facing a recent scam or have questions about certain solicitations you are receiving, do not hesitate to contact the experienced elder law attorneys at the Law Offices of Berge & Berge right away. You can reach the office by dialing (408)985-9918 today. 

Thursday, May 28, 2015

The Benefits of Updating Your Estate Plan Periodically

Do I Need to Update My Estate Plan?

People can be reluctant to undertake the estate planning process because they associate it with planning for events they do not want to think about (like illness or death). Not planning for these events, however, will not prevent them from happening. Once these documents are completed, they need to be updated periodically; after all, people change over time, as does their health, financial situation, wants and plans for the future. These are not documents that should be packed away and forgotten.

Plan Periodic Reviews

At the least, you should review your planning documents (wills, trusts, powers of attorney, living wills) every five years. What may have been perfectly sensible five years ago may no longer be appropriate. If not, make changes. Many experts even recommend an annual review which you should schedule around your birthday so it’s not easily forgotten. 

Update with Major Changes 

These documents should be reviewed and adjusted when a major life event happens. This could be a divorce, re-marriage, death of a spouse or child, birth of a grandchild or any drastic change (good or bad) in your finances.

Once your planning documents are completed to your satisfaction, make sure they are organized and do not treat them like they are top secret. Consider taking the following steps: 

• Health care directives should be sent to your physician, become a medical order and be part of your chart at your local hospital. 

• If trusts are created or changed, your real estate title and financial accounts may also need to be changed.

• Store your health care directives electronically where designated family members can easily access them in the event of an emergency.

• Discuss your wishes and details of your estate plan with your loved ones. 

According to the Dubuque Telegraph Herald, a recent survey of a thousand adults by the website found,

• 55% said their parents have completed some kind of planning document.

• Nearly a quarter of people with elderly parents don’t know where their parents’ estate documents are kept, and 

• 44% didn't know the contents of the documents.

If you have any questions or concerns about estate planning or want to update your estate plan, the San Jose and Santa Clara County California estate planning and elder law attorneys at Berge & Berge can help. Call the firm at (408)985-9918.

Tuesday, May 19, 2015

Joint Tenancy in Estate Planning: When (and How) to Avoid an Unintended Override

I am considering adding my daughter to my checking and savings accounts. Is this a good idea? 

Joint tenancy is a legal term referring to the situation in which two or more individuals share an undivided ownership interest in an asset or piece of property. The situation is extremely common between spouses or domestic partners, as it creates a seamless transition of property to the other upon the death of the first. However, joint tenancy is not always as convenient as it seems, and it can actually lead to the override of a well-intentioned, carefully-considered estate plan. If you are considering joint tenancy for the sake of convenience, we encourage you to read on before taking this step – there may be more to it than you realize. 

Joint ownership of financial accounts

For many, the thought of managing daily and monthly personal finances proves exceptionally overwhelming, prompting the decision to add a significant other, child or close friend to an account. By virtue of being added to the account, this individual gains all the administrative rights of the original owner, including the ability to write checks, make deposits, and initiate withdrawals. This person will also gain outright ownership of the account upon the death or incapacity of the original owner, despite the language of that owner’s will or living trust. In other words, joint tenancy over checking and savings accounts – which can grow to a considerable size with income from one’s pension and retirement accounts – will override one’s intentions in an estate plan, and there is little that can be done to undo this arrangement. 

For anyone struggling with upkeep of personal finances, one alternative to joint tenancy is a simple durable power of attorney for finances. This document will allow a trusted friend or relative to make transactions on behalf of the account holder without actually undoing his or her predetermined estate plan. 

If you have additional questions about the effects of joint tenancy on financial assets or real property, please do not hesitate to contact the estate planning attorneys at the Law Offices of Berge & Berge, LLP today by dialing (408)985-9918. 

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