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While many people understand what a last will and testament are, they don’t always realize a living will is a separate document with different functions. Both are important in estate planning, and both should be carefully located somewhere that’s accessible to the people who will need them. However, a living will has a particular urgency that makes its accessibility even more important. Here’s what you need to know.

What Is a Living Will?

A living will, which is a type of advance medical directive, doesn’t deal with the distribution of assets in an estate the way a traditional last will and testament does. Instead, it’s designed to make known the medical wishes and preferences of the person who draws it up. It’s done so that in the event that that person becomes unable to speak or is unconscious, their wishes are clearly available for medical staff and close family to understand and implement.

Among the issues that can be covered in a living will are:

• Types of medical intervention you would or would not want to be used. That can include treatments such as cardiopulmonary resuscitation (CPR) to restart the heart if it stops beating (either manually or with a device that uses an electric shock).
• Mechanical intervention meant to prolong life. These can include mechanical ventilation to manage breathing, intravenous tube feeding to provide water and nutrients if you’re unable to eat or drink, or dialysis to manage kidney functions when the kidneys are no longer working. You can specify whether or not you want any of these measures taken, and if you do want them, when and for how long you’d want to receive them.
• Medications to treat infections. If you are close to the end of your life, you can stipulate that such medications not be used to prolong life, allowing the infections to run their course.
• Palliative care interventions. These are choices you can make regarding things such as receiving pain medications but not treatment medications, the wish to die at home rather than a hospital or nursing facility, or stopping various invasive tests and treatments. Palliative care is usually designed to keep a person as comfortable as possible while not prolonging their life through extraordinary measures.
• Donation. A living will allows you to specify if you would like to donate organs and tissues or donate your body for scientific study. If you want to donate organs and tissue, it’s a good idea to specify in the living will that you understand that you might be kept alive while the organs and tissues are being collected, otherwise there could be confusion if you’ve otherwise stated you don’t want to be kept alive.

What About Do Not Resuscitate or Do Not Intubate?

Do not resuscitate (DNR) and do not intubate (DNI) orders can be included in a living will, although they don’t have to be. This is something you can discuss with your doctor, who should have the appropriate forms you could fill out. Then the doctor can have them put into your medical records.

Who Will Carry Out My Living Will?

This is an important part of drawing up a living will: The person who will enforce it. Sometimes known as a health care agent, this person is responsible for ensuring your wishes, as specified in the living will, are adhered to by medical teams and by family members. In general, the person you choose must be an adult. It should be someone you trust to understand and carry out your wishes. If you have family members who may be opposed to your wishes, the healthcare agent should be someone who is willing to stand firm and not give in to pressure.

The person you choose doesn’t have to live in California, but they should be able and willing to travel to your bedside if needed. Above all, you should discuss this role in depth with whomever you choose, so they’re aware ahead of time of your wishes and are ready to abide by them.

Where Should I Keep My Living Will?

Given how important a living will is, especially with family members who disagree with your choices, where you keep a living will is nearly as important as having it in the first place. There are multiple places that a living will should be kept with the goal of having it immediately available when the time comes (and that means making multiple copies).

• Your healthcare agent. The person carrying out the will should have a copy.
• Your doctor. They should know your wishes, and they should also ensure the living will is part of all your medical and hospital records.
• Your attorney. In the event that there’s dissent in your family, your attorney should have a legally binding copy.
• In your home or with you. Keep a copy at home and, if possible, with you any time you leave home.
  One place not to keep a copy: Your safety deposit box at a bank. This will not be accessible until you’ve passed and your estate is settled.

What Should I Do if I Need Help Setting Up a Living Will?

Call us at 916-685-1225 for a free consultation. A living will is an important document that can ensure your wishes are honored when you can no longer specify them. It can also reduce stress among family members by not leaving them to decide what they think you would have wanted.

If you have a person with special needs in your life, it’s understandable to worry about what will happen when you can no longer take care of them. That’s why you should consider adding special needs planning along with your routine estate planning. There are specific special needs trusts in California that will protect the person with special needs and provide you with peace of mind. Here’s what you need to know about these trusts, how they differ, and which makes sense for your situation.

What Is a Special Needs Trust?

A special needs trust is an estate planning tool that protects a person with special needs from becoming ineligible for government benefits (such as Medicaid and Supplemental Social Security Income) when they have too many assets.

Because many of these government benefits can greatly enhance someone’s quality of life, being unable to access them can negatively impact them. These are complicated to set up, so working with an experienced special needs trust attorney is highly recommended.

What Is a First-Party Special Needs Trust?

A first-party special needs trust is used for the property owned by the person with special needs. That property includes assets such as damages from lawsuits or personal injuries, inheritances or life insurance payouts, retirement plans, or divorce settlements. If people with special needs own these assets outright, they could become ineligible for government benefits. Transferring them into a first-party special needs trust effectively moves the ownership from the person to the trust, so the person will no longer be denied benefits due to owning these outright.

What Is a Third-Party Special Needs Trust?

Most people think of this type of trust when they think of a trust. It’s set up by someone other than the person with special needs, with the person becoming the beneficiary of the trust. The beneficiary does now own the trust, nor do they have direct access to the assets within it. A trustee oversees the trust and ensures that the assets of the trust aren’t distributed to the beneficiary in such a way that makes them ineligible for government benefits.

For example, giving lump sums of cash to the beneficiary could mean the loss of government benefits. However, the trustee can pay for various things on behalf of the beneficiary, such as hobbies, personal services, classes, pet supplies, computers and related equipment, vacations, or transportation.

What Are the Pros and Cons of a First-Party Special Needs Trust?

Pros:

The person with special needs will, if the trust is set up correctly, not become ineligible for government benefits.

The trust can provide a more comfortable quality of life than it would have with only government benefits.

A trustee is appointed to ensure the trust is operated responsibly and not in a way that would cause the person with special needs to lose government benefits.

Cons:

A first-party trust comes with a payback clause. That means that if the person with special needs passes away before all the assets in the trust are spent, the first thing that happens is that those assets are used to pay back any Medicaid benefits the person received while living.

The trust must be established before the person with special needs reaches age 65. That means that if they receive an inheritance that disqualifies them from government benefits after turning 65, it’s too late to protect the benefits by putting them into a first-party trust.

What Are the Pros and Cons of a Third-Party Special Needs Trust?

Pros:

Because a donor funds them, they rarely involve oversight by a court, especially if the donor is still alive.
A third-party special needs trust has no size limit.

If the person with special needs passes away, the assets in the trust can be inherited by the person’s family members or other designees.
There is no age limit to set up this type of trust.

Cons:

A third-party trust cannot hold any property of a person with special needs. That means that if the person receives a sizable inheritance, they can’t transfer it into the third-party trust. If they’re 65 or older when the inheritance arrives, they also can’t place it into a first-party trust, so they may lose government benefits.

Can a Person with Special Needs Have Both a Special Needs Trust and an ABLE Account?

ABLE accounts, which were created by the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014, are special savings accounts for people with special needs that have tax advantages. Anyone can make deposits to the account, including the trustee of a special needs trust, using post-tax dollars. Any income earned on such accounts is not taxed.

One person can have both a special needs trust and an ABLE account. While they both protect resources, they do it in different ways. What’s important to note is that an ABLE account must be for someone whose disability occurred before the age of 26 and that there are both contribution and account limits.

What Should I Do if I Need Help Setting Up a Special Needs Trust?

Call us at 916-685-1225 for a free consultation. Our team of experienced, knowledgeable estate planning attorneys understands how important it is for you to ensure that the special needs person in your life will be taken care of after you’re gone. We know the California laws and regulations focused on special needs trusts, and we can help guide you through the planning process to protect your loved one.

Creating a will is an essential part of estate planning. With your will, you determine how your assets will be distributed after your death. However, determining who receives what isn’t the only important of making a will legally binding–you also need a trusted executor. Without that, the will may not be carried out as you wish. Here’s what you need to know about selecting an executor.

What Does an Executor Do?

Many people think an executor is a person who distributes the estate according to the specifications in the deceased’s will. That’s true, but that’s not all that an executor does. Depending on the size of the estate, they can have many other responsibilities, including:

• Filing a copy of the will with the
  court.
• Notifying all relevant organizations of the death, including credit card companies, banks, and government agencies such as the Veterans Administration or the Social  Security Administration. Note: Many funeral homes will notify Social Security, but the executor should follow up to ensure this is done.
• Set up and manage a bank account for the estate to handle incoming deposits and disburse funds, such as bills that are still owed. Then the executor can pay the estate’s debts and taxes.
• Provide a detailed inventory of assets and their values to the court (required in California).
• Maintain property until it’s distributed or sold. This includes the upkeep of things like homes, cars, etc.
• Oversee the distribution of the assets according to the terms of the will.

Who Can Legally Be an Executor in California?

There are two significant requirements for who can be named executor of a will in California: They must be at least 18 years old, and they must be deemed of sound mind (in other words, a court wouldn’t find them mentally incapacitated).

While some states don’t allow convicted felons to serve as executors, California has no such restriction. However, the state’s courts have the right to question the validity of anyone appointed as executor and assign a new one if they find the estate is mismanaged due to negligence or deliberate actions that violate the will.
Also, unlike other states, California doesn’t prohibit people from other states from becoming executors. However, if the estate is large or complex, having someone local makes more sense, as they’ll need to be on hand for court hearings and other in-person activities.

It’s important to understand that an executor doesn’t have to be just one person, or just individuals. If there are no individuals you feel can manage your estate in your absence, you could also name an attorney or accountant, or even a bank.

What Else Should I Consider When Choosing an Executor for My Will?

Once you’ve created a list of candidates that adheres to California’s requirements (above), the process becomes more individualized. There are several considerations when selecting the right person (or, in some cases, organization).

• Choose someone reliable and responsible. Basically, you’re trusting this person with all your worldly goods. You need to have faith that they will execute your wishes the way you want them to, not how they think you should have.
• Look for someone whose own finances are in good shape. Someone struggling financially might be tempted to take advantage of the executorial role and manipulate the estate to their benefit.
• Find someone who’s highly organized and able to meet deadlines. Large, complicated estates require someone capable of organizing them. In addition, California can have deadlines that must be met, so the executor needs to organize their efforts in such a way as to meet those deadlines.
• Think twice about family. While many people turn to family members as executors, this can be fraught, especially if there are family members who don’t get along. Emotions can run high and lead to dissent and disputes. Those can drag the estate distribution out much longer than necessary and potentially end up costing a lot more, meaning some of the assets are spent on legal fees rather than being disbursed to heirs.
• Consider having someone younger than you be the executor. While there are no guarantees about how long someone will live, choosing a younger executor at least provides the possibility that they won’t die before you do.
• It can be someone named in the will. This is often the case. However, if you’re leaving all of the estate (or a significant portion of it ) to one person, it’s better to have someone else as executor.
• Discuss the role of the executor with the person you want. You may think you’ve found the perfect executor, but they, in turn may feel they’re not up to the responsibility. Having a discussion before finalizing the will is key to avoiding problems later.

Do Executors Get Paid in California?

California law provides compensation for people acting as executors, entitling them to the following:

• 4% of the total value of the estate up to the first $100,000
• 3% of the second $100,000
• 2% on the following $800,000
• 1% on the following $9 million
• 5% on the following $15 million

The courts also determine a reasonable amount for any estate valued at more than $25 million.

What Should I Do if I Need Help Choosing an Executor for My Will?

Call us at 916-685-1225 for a free consultation. Our team of experienced, knowledgeable attorneys can walk you through the considerations at stake in your estate and its disposal. We will ask questions that will identify both potential positives and negatives for any candidates to be your executor. Choosing an executor for the will can be a complicated, sometimes emotional process, and we’ll guide you through it thoroughly and compassionately.

A major reason people want to do estate planning is to protect their hard-earned assets, whether for themselves or their loved ones. A frequent concern is the possibility that there will either be issues with creditors/legal judgments and settlements or a bankruptcy situation for both the estate holder or the heirs, or divorce for the heirs. Wanting to protect the estate from those types of claims is essential, and it’s a form of protection not offered with individual retirement accounts (IRAs). One way to do that is through a private retirement plan (PRP), a program held under California state creditor law. It’s a unique form of estate planning that
offers many safeguards other forms of estate planning do not. Here’s what you need to know.

What Does a PRP Protect?

It protects the named assets by exempting them from liens and seizures, whether due to bankruptcy or lawsuit settlements. It can also safeguard heirs by keeping the inheritance out of community property in marriage. Then, if the couple divorces, the spouse will not be entitled to the inheritance, which they could be otherwise.

The assets in the trust, including any earnings, gains, and future values, are safe while accumulating. Depending on the size of the estate and the assets within, the PRP may be able to take advantage of several tax benefits as well, which could conceivably offset the cost of setting it up. This is especially true for business owners.

When Should I Begin Developing a PRP?

There are situations when people face an unexpected financial problem, such as a lawsuit with a large settlement, and they want to put their assets in a PRP at that point to protect them. For example, a surgeon could face a malpractice lawsuit that could far exceed what his insurance covers. However, one criteria for the PRP to be legal and successful is that it’s done primarily for retirement benefits, not to evade creditors and judgments. That’s why a PRP should be set up as early as possible while there’s no pending financial problem on the horizon. By the time the surgeon faces the lawsuit, it’s too late.

Note that if the estate holder passes away before creating a PRP and the estate goes to a married inheritor, it may be too late for the inheritor to define it as a PRP.

Also, understand that this is a long-term planning tool. While it has many shorter-term benefits, it is structured specifically for retirement. If you have cash reserves you think you need before retirement, you may want to think about keeping those out of the PRP. Our team of attorneys is happy to discuss the specifics of your situation to come up with the best plan for you.

How Is a PRP Constructed?

This is a complex plan that requires having a knowledgeable professional to ensure it’s drawn up correctly. A big part of the PRP is setting up a private retirement trust. Assets are brought into that trust and retitled to indicate they’re assets specifically to be used for retirement.

Not every asset can be contained in a private retirement trust, but many can be, whether cash or property. The key is that the trust should hold things that will be used during retirement. Things like rental properties must be excluded. But funds from existing IRAs can. Unlike other retirement plans, PRPs can be funded with private business stock and LLC member interests.

That PRP is constructed so that you can continue adding to it, just as you’d add to any other retirement program. One of the additional benefits of the PRP is that contributions to it aren’t tax deductible, so there’s no maximum limit on contributions. However, the PRP plan needs to detail the need for retirement savings, so if much more significant contributions are made than what’s required, that could raise questions. That’s why it’s critical to have an experienced estate planning professional involved in developing the PRP, especially the plan.

What’s Required to Have a PRP?

As noted above, one thing that will be examined is whether or not the estate holder is trying to avoid creditors somehow. If that’s the case, the trust may not be able to be created; a prime example of why setting this up while there are no conflicts at hand is strongly recommended.

The PRP needs to have a detailed plan that outlines the assets and how they’ll be used in retirement. Courts will look closely at this plan to ensure it’s not a precursor to hiding funds from upcoming litigation but instead appears to be a diligently considered plan for when retirement may take place and what will likely be needed. A plan needs to be presented from every person named in the trust.

Beyond that, the trust must have an independent trustee and an independent plan administrator. There are many professionals in California who can fulfill those roles.

Finally, a PRP is only valid in California. If you plan to move out of state before or during retirement, the PRP will no longer hold legally.

What Should I Do if I Need a PRP?

Call us at 916-685-1225 for a free consultation. Our team of experienced, knowledgeable attorneys can walk you through the rules and requirements to ensure your estate is protected from creditors and lawsuits for you and your heirs. Because of the complexity of PRPs and the need to have them in place before any crisis arises, getting started as soon as possible is highly recommended. It’s a good idea to plan for the worst, even if you hope it never happens.

Although the various titles of trustee, executor, and administrator may sound the same, they are, in reality, each quite different from one another. Accordingly, the law in California states the following in regard to the various legal roles each one plays in dealing with matters that pertain to an estate.

If the descendant passes away and places their assets in a trust, then a trustee manages that property. If an individual passes away with a will in place, then there is an executor who is responsible for handling the various affairs and making certain the assets are distributed to the beneficiaries. Lastly, if the deceased passed away and did not have a will or a trust in place, then an administrator is named to oversee the affairs of the estate.

If you need more information regarding the difference in these various roles or assistance in performing these duties, contact the law offices of Cava and Faulkner of Elk Grove, CA, and ask to schedule a free consultation.

How are a Trustee and an Executor Similar to One Another?

There are many similarities between trustees and executors. One of their principal duties is to manage and care for the assets belonging to the beneficiaries of either trust or will. Under California law, both trustees and executors are to be paid for their work.

What Does a Public Administrator Do?

A public administrator only becomes involved in handling the affairs of an estate if the descendant left no will and also if there is no one willing to act as an administrator. The public administrator acts just as a private administrator would to ensure that all debts are paid and that all of the descendant’s assets are discovered and properly disbursed at the appropriate time.

Whom Should I Choose to Manage My Affairs After I Am Gone?

Making a decision about who should manage your affairs after you are gone is a decision that should be given much thought and consideration. You may be uncertain as to whether you should have an executor or a trustee to handle your affairs. Remember that an administrator is only appointed if you do not have a will or estate plan when you pass away.

One thing that is important to remember is that a trust is not subject to and many of the fees associated with having a will. Unlike the executor of a will, a trustee can take over the management of a trust without a court order.

Can a Trust Attorney Help Me With Concerns I May Have About a Trustee, Executor, or Administrator?

If you have concerns about any type of individual who has been put in place to manage an estate, you need to contact the law offices of Cava and Faulkner of Elk Grove, CA, as soon as possible. Our experienced attorneys can assist you by answering any questions or concerns that you may have. Contact us by calling (979) 596-4088 and ask to schedule a free consultation.

The executor’s main duty is to ensure all matters pertaining to distributing assets and paying debts associated with the estate are completed in a timely and legal manner. Being named an executor is a position of trust, and any betrayal of that trust can have serious consequences.

Theft from an estate is known as inheritance theft and is grounds to have the executor immediately removed from their position. Suppose you feel that an executor has been stealing from the estate; you need to consult with a trust attorney as soon as possible before even more assets can be embezzled. Contact our law offices and ask to schedule a free consultation as soon as possible.

What is the Legal Definition of Stealing From an Estate?

Inheritance theft can also be considered the crime of embezzling. In many cases, the theft occurs before the estate inventory can be completed. The executor may fail to properly report assets or other financial holdings that belong to the estate.

Any type of stealing is considered to be a serious crime in California. This type of theft can be challenging to prove and may require a great deal of evidence presented by the plaintiff. Evidence can be in the form of documents and testimony from the plaintiff or other witnesses.

Can the Executor Go to Jail for Stealing From an Estate?

Inheritance theft is a criminal offense in California. The courts have the legal authority to order the Executor to make restitution to the estate by paying damages and demanding that all of the stolen assets be returned. If the state attorney decides to bring criminal charges against the Executor, they could face being criminally convicted and potentially serving up to 25 years in prison. However, often the problem is dealt with in civil court rather than in the criminal justice system. In either case, a knowledgeable trust attorney can assist you in gathering crucial evidence such as documentation, assessing damages, and providing representation in court.

How Long do I Have to Respond to Beneficiary Notice?

The trustee of an estate is required to send out a notice informing beneficiaries when trust changes have occurred. If you feel that the Executor is stealing from an estate related to forged documents, you need to act within 120 days of receiving the notice. However, if you feel that funds or other financial assets have been stolen, you still have the option of pursuing legal action even if more than 120 days have passed.

How Can a Trust Attorney Help Me if I Suspect Theft by an Executor?

If you feel that the Executor is stealing from an estate, you need to contact the law offices of Cava and Faulkner of Elk Grove, CA, as soon as you suspect the theft. We can examine any evidence you may have and assess how to proceed with legal action if necessary. Contact us by calling (979) 596-4088 and ask to schedule a free consultation.