Author: Sirkin Law Group

Our parents have spent decades caring for us and helping us to build our future security.  Typically at some point, it is time for us to start helping our parents by making sure that they are cared for.  We can provide transportation to doctor’s appointments, assist in making sure bills are paid, and help do the daily chores in California.  All of these actions will help our parents, but there are also several types of trusts which can also help protect your parents and their future financial security.

One type of trust is called a special needs trust.  If your parent is the recipient of Medi-Cal or SSI benefits, then he or she cannot have more than a certain amount of assets or income in order to continue to qualify.  If you were to give a large gift to your parents to make sure he or she can meet expenses or even purchase extras luxuries, this would likely make them ineligible to continue to receive benefits.  A special needs trust would allow you to provide them with funds while not making them ineligible for vital benefits.

Another way to protect your parents is called an A/B/C trust or sometimes a Qualified Terminable Interest Property trust (or “Q-Tip” trust).  These types of trusts are the most appropriate for estates that have enough assets to be subject to estate taxes and where your parents are still married.  With an A/B/C trust, upon the death of one the spouses, the estate is divided.  Half of the assets are placed in a survivor’s trust for the surviving spouse.  The decedent’s share of the estate is then divided twice, into two separate trusts, one of which is the amount of assets up to the amount exempt from the estate tax, and the remainder in a third trust.  The assets in the survivor’s trust and the trust containing the remainder will be assessed together for estate taxes, and will only have to pay estate taxes if those two together exceed the estate tax exemption amount, assuming portability.  The second trust will not be subject to estate taxes.  This type of trust protects your parents by reducing or hopefully eliminating the estate taxes that need to be paid.

A spendthrift trust could be another way to help protect your parents.  If your parents are poor at managing money, but you want to make sure that they still can continue to meet their living expenses, placing assets into a spendthrift trust can help.  With a spendthrift trust, your parents will only be allowed money from the trust for very specific reasons, such as living expenses.  The assets in the trust will be immune from seizure from most creditors.

We have many solutions for you to help protect the security for your parents in the future.  Call us today to talk about your options.

Different estates require very different estate planning solutions and tools, such as irrevocable trusts, to reach stated goals, such as funding a favorite charity or providing financial security to minor children.  Understanding the differences between different estate planning tools is an important step to making sure that you reach your objectives.  Irrevocable and revocable trusts are two types of tools that could help you to achieve your ambitions for yourself and your family, and each has its own advantages and disadvantages.

A revocable trust, as the name suggests, is totally changeable or even revocable by the person who originally created the trust, who is called the settlor or grantor.  The settlor can at any time after the trust is created decide to change all or part of the trust, or even get rid of it completely.  A significant disadvantage to a revocable trust is that it does not provide the settlor with any protections from creditors.  In addition, the contents of the revocable trust are still considered the property of the settlor for purposes of determining eligibility for certain programs, such as Medicaid/Medi-Cal.

By contrast, an irrevocable trust cannot be changed after the trust documents are signed, even by the original settlor, except in very limited circumstances.  An irrevocable trust can provide the assets with a certain amount of protection from creditors.  In other words, if the settlor is sued, the assets inside the trust cannot be seized to satisfy the judgment.  It should be noted, however, that any transfers of property to the trust must be done in good faith under California law.  A settlor cannot simply place all of his or her assets into an irrevocable trust to avoid imminent asset seizure.  Irrevocable trusts may also offer significant tax protections, as the trust is taxed as a separate entity from the settlor.

There are certain benefits that both types of trusts offer.  With both revocable and irrevocable trusts, the assets contained in the trust will pass outside of probate.  This can reduce estate tax liability, as well as the amount of time and expense associated with the probate process.  These trusts also can also offer privacy, as avoiding the probate process means the trust documents will not be public record.

Our Irrevocable trust lawyers in Los Angeles can help you determine what type of California estate planning tools are right for you and your family.  Call us today for a consultation.

Planning for your child’s future is one of your most important jobs as a parent.  It is essential to help your child grow, thrive, and reach his or her full potential.  Estate Planning for parents of young children includes not only what you can do for your child during your life, but also what you can do after you pass away.  An estate plan can help ensure stability for your child if you were to die before he or she is an adult.  Choosing the right guardian for your child is just as important as ensuring financial stability.  There are several factors you should keep in mind when trying to name the right guardian for your child.

First, think about the type of values you hold dear and the type of lifestyle you lead.  You should consider a guardian who has similar values and lifestyle habits, as this will make it more probable that your child will be raised in a similar household.  Such consistency will also help your child in the certainly difficult time of transitioning to a new house because you are no longer there to care for him or her.

Next, consider whether your chosen guardian has the mental and physical health to care for your child until he or she reaches adulthood.  You may be very close to your parents, but if they are advanced in age with poor health, they are probably not a good choice to be guardians of a newborn.  Similarly, if your best friend already has five young children in her household, carefully consider whether she has the time and space to care for your children as well.

Third, keep in mind that you are under no obligation to name a particular person as guardian to your child.  You are not required to name your siblings or your parents, even though they may be your closest relatives.  You are free to select any adult you choose to serve as guardian, as long as that adult is fit to parent and is willing to take up the responsibility.

Finally, think about whether your chosen guardian is willing and able to help your children maintain their other family ties.  Taking their physical location into account is also important with this factor, as choosing a guardian who lives physically very far from your family could mean that the children will have a difficult time maintaining contact and bonds with your siblings, parents, or other family members.

Choosing the right guardian for your child is a very important decision.  Call us today to talk about your estate plan, your child, and what we can do to help you. Our Los Aneles California attorneys offer free consultations for estate planning matters.

Very few events in life are as exciting as having a new baby.  The extra love and happiness can be overwhelming, but so can all the new tasks that come along with adding to your family.  While arranging your life and schedule to revolve around your child, estate planning is probably the farthest thing from your mind.  However, new babies definitely mean it is time for you to make a new estate plan.

You will need to name a guardian for your minor children in the event of your death.  When selecting a guardian, think about who is likely to raise your child in the same way you would.  Choose a guardian who shares your values, morals, and lifestyle.  You should also keep in mind that if you were to pass away but the other parent does not, then custody of the child will automatically pass to that parent, unless that parent is somehow unfit.  This is relevant in those cases where the parents are divorced or separated.  You will not be able to name a guardian to “take over” your parenting time or your custody responsibilities if the other parent is still living and is a fit parent.

You will also want to consider creating a trust to help provide for the financial stability for your child, especially if you were to pass away before your child is an adult.  With a trust, you can transfer assets to the trust, and you can dictate how those assets are to be administered and used.  For example, you can state that the trust is to be used to help with the child’s college education, regular living expenses buying his or her first house, or carrying on the family business.  You will name a trustee, who will be responsible for overseeing the trust and administering it in accordance with your wishes.  The trustee that you name does not have to be the same person you name as guardian for your child, which is helpful when the guardian may not be financially responsible.

You also need to update the beneficiaries you already have named on certain accounts and investments.  You may have life insurance, 401(k)s, savings accounts, or an IRA.  You need to update the beneficiary named on these documents when you have a new child to make sure that he or she receives the asset in a trust, and not directly, with a minimum of trouble when you pass on.  If you fail to name a beneficiary, then the assets will have to pass through probate before being distributed, which can be expenses and time consuming.

Our Los Angeles California attorneys have extensive experience helping young families with babies with their estate plans and taking their families’ changing needs into account.  Call us today for a consultation.

Making an estate plan is one of the keys to ensuring your future financial stability.  Estate plans can consist of many different documents ranging from a Last Will and Testament to a Power of Attorney for Health Care to a revocable trust or an irrevocable trust.  The goals of your estate plan will dictate the types of documents and strategies you use will need to employ.  One goal that needs to be considered if there is a long-standing illness that requires long-term care, is Medi-Cal planning.

Medi-Cal is the program run by the State of California for administering federal Medicaid funds.  Medicaid (and therefore Medi-Cal) is a need-based program that provides health care coverage.  One essential piece of coverage provided by Medi-Cal is long-term nursing home coverage.  Medicare and most private insurance does not cover long-term residential care above a limited number of days.  For nursing home care, unless you have purchased a specific policy to cover that care, Medi-Cal may be a planning option.  This means that if you do not qualify for Medi-Cal, you will be paying out of pocket for nursing home care, which can cost upwards of $10,000 per month.

Without proper estate planning, you will be spending all of your hard earned assets on nursing home care.  This is because there are specific caps for eligibility.  If applicants have too many assets, they will be required to “spend down” their assets below this cap before they are eligible to receive Medi-Cal.  Fortunately, there are specific strategies that you can employ to recharacterize your assets.  Sales of assets, leases, or transfers can change the nature of your assets such that they are no longer part of the eligibility calculation, allowing you to still enjoy the benefit of your assets while also qualifying for Medi-Cal.  However, Medi-Cal eligibility is subject to a thirty month look back period (an possible up to 60 months), meaning that certain types of transfers or gifts made within that period will not be effective to remove those assets for your estate for Medi-Cal eligibility purposes.

Estate planning is also vital to protect against the Medi-Cal Recovery Law.  After you pass on, without the proper estate planning, Medi-Cal can try to recover the money the program spent on your care from your estate.  There are certain techniques, such as placing your home in a revocable living trust, that can help protect against the recovery while still allowing you to qualify for Medi-Cal benefits.

Ask our experience California Medi-Cal attorneys to help you with your estate plan and secure your family’s future.  Call us today for an appointment.

There are a multitude of different instruments to help us achieve our financial goals.  When planning for our own futures, we can create trusts, utilize different business structures, and transfer assets to our friends and families to help us reach our objectives.  If we have another adult under our care, then it is even more important to make sure that we make careful plans. A special needs trust is one way we can help protect and plan for the future for vulnerable friends and family members.

A special needs trust is designed to provide disabled persons with a way to maintain certain assets while still remaining eligible for public benefits programs, such as Medi-Cal or Supplemental Security Income. A special needs trust can be funded with the assets of the trust beneficiary or can be funded by a third party.  Regardless of the source of the assets provided for the trust, the disabled person will be named as the beneficiary with a trusted third person named as the trustee.  The trustee will be responsible for managing the trust assets as well as making distributions for the benefit of the beneficiary, such as paying living expenses or medical costs.

There are a couple of important things to note about a special needs trust that has been funded with the assets belonging to the beneficiary.  First, these trusts are subject to particular state and federal regulations so they must contain particular language to conform with statutes.  Second, after the death of the trust beneficiary, the Department of Health Care Services must attempt to recover an amount equal to benefits paid by Medi-Cal for the care of the beneficiary from a beneficiary’s estate, but not from a trust.  Finally, there are two different classifications for first party funded special needs trusts.  Those established under 42 USC 1396p(d)(4)(A) can only be established for people under the age of sixty-five years old.  A pooled special needs trust may be established for a person of any age, but those trusts must be managed by particular non-profit organizations.  The funds are pooled together for purposes of maximizing investment opportunities and benefits, but each beneficiary will have his or her own separate account.

Call us today to talk to our California attorneys and lawyers about special needs trusts.  We can discuss the needs of your friend or family member and what we can do to help you find a solution. Call 818.340.4479.

We all have hobbies and interests that we are passionate about.  For some, these interests may be fixing up old cars, for others it may be following a particular sports team.  Whatever your hobby or your passion, you may have spent years or even decades carefully building your collection.  Art work, firearms, porcelain figures, cars, or even airplanes are just a few examples.  It is important to build your estate plan with an eye toward protecting your collection as well as your intended beneficiaries.

When trying to decide which friend or family member will receive your collection when you pass away, you should carefully consider whether the intended recipient will care for your collection as cautiously as you do.  Choosing a beneficiary who shares your interests and appreciates the collection can ensure that the collection will remain intact for future generations to enjoy.

Another very important consideration is the value of your collection.  Especially in the case of art or vehicle collections, it is quite possible that the collection is worth a substantial amount of money.  If you pass your collection directly to a beneficiary through your Last Will and Testament, it could expose your estate to estate tax liabilities.  Gifting your collection before your death or transferring it to a trust can keep the collection from passing with your estate and reduce the chance that estate taxes will be assessed, as the post-gift appreciation is passed on to your beneficiaries.

Some items are more heavily regulated than others, which is another important consideration.  For example, the sale and transfer of firearms can be complicated and expensive if you own firearms that are subject to regulation under the National Firearms Act.  This will save your executor from trying to ensure compliance with the complicated federal and state laws surrounding the transfer of firearms from your estate to your named beneficiaries.  Other types of assets that may require this type of extra attention to federal and state regulation would be collections of airplanes, cars, or airplanes.

Our lawyers understand that your collection is important to you and represents more than just an assortment of items.  Call us today and we can talk with you about the specific solutions for your assets and your collection.

Estate planning requires a high degree of precision and understanding of a multitude of technical requirements and rules.  Trusts are no exception to this, and each different type of trust often has its own set of rules.  Two fundamental issues that must be properly handled when facing trust litigation, as with any court case, are jurisdiction and venue.

Venue refers to the proper geographical place to file a particular trust case.  By contrast, jurisdiction means the legal ability or right of a court to actually decide the issues at controversy or the court’s power to make decisions about a particular person’s rights and responsibilities.  Pursuant to California Probate Code 17002, in general, the proper venue for a trust is the principal place where the trust’s administration takes place, that is the business place of the trustee.  The court which has jurisdiction over issues concerning trusts is the superior court in the place of administration.

Probate Code 17002:

(a) The principal place of administration of the trust is the usual place where the day-to-day activity of the trust is carried on by the trustee or its representative who is primarily responsible for the administration of the trust.

(b) If the principal place of administration of the trust cannot be determined under subdivision (a), it shall be determined as follows:

(1) If the trust has a single trustee, the principal place of administration of the trust is the trustee’s residence or usual place of business.

(2) If the trust has more than one trustee, the principal place of administration of the trust is the residence or usual place of business of any of the cotrustees as agreed upon by them or, if not, the residence or usual place of business of any of the cotrustees.

(Enacted by Stats. 1990, Ch. 79.)

With the increasing mobility of families, the issue very often becomes what if the beneficiary or the trustee lives outside of California?  Is California still the proper venue and jurisdiction to bring actions concerning the trust?  Typically, the answer will still be yes.  California probate code 17003(a) provides that “by accepting the trusteeship of a trust having a principle place of administration in this state, the trustee submits personal to the jurisdiction of the court under this division.”

The business place of the trustee must therefore be California, even if the trustee does not reside in California.  The trustee’s place of business may in fact be where his/her attorney is located, or where other trust business is conducted.

Subsection (b) goes on to state that “to the extent of their interests in the trusts,” beneficiaries of a trust whose principal place of administration in California also are subject to the court’s jurisdiction.   Similarly, the beneficiary could reside in Michigan, but for purposes of the trust, he or she is subject to California law jurisdiction, if the place of business of the trustee is California.  There are ways that California could lose jurisdiction if, for example, a new trustee is appointed outside of California, and the previous trustee also was administering the trust outside of California.

Trusts, like other estate planning methods, require attention to detail and expertise about their requirements in California.  Sirkin Law attorneys have extensive experience in assisting our clients.  Call us today so we can talk with you about your case.

Owning a home and other real estate has long been a part of the American dream for Los Angeles California residents. Millions of Americans use real estate as an investment tool, and a trust as a way to help protect and ensure the future of their family and loved ones. This method can be very successful to help secure the financial stability for your family, and it is essential that your real estate investments are coupled with a detailed and tailored estate plan. An estate plan can take real estate into account in several different ways.

One common tool for real estate and estate plans is a trust. With a trust, you transfer your asset (in this case your real estate) to the trust. The trust documents you execute will name a trustee and a beneficiary. The initial trust is usually you. The trustee is responsible for administering your trust in accordance with your wishes. The beneficiary is the person you designate to receive the benefits of the trust. There are wide varieties of trusts, most of which allow you to name yourself as both trustee and beneficiary. There are also distinct tax planning opportunities in trusts. In some cases, transferring your real estate to a trust can mean that your real estate will pass outside of probate. If you have substantial real estate assets, with proper tax planning, this can reduce the probability that your beneficiaries and heirs will be burdened by estate taxes.

Another way to keep your real estate in mind when constructing your estate plan is changing the way your real estate is titled. Having your home titled as “joint tenant with rights of survivorship” is a common way to accomplish this. This method is typical and popular with married couples. Having real estate titled this way allows the property interest you hold in a home to immediately pass to the joint tenant without having to go to through probate or extra steps. One downside to this method is that titling real estate as a joint tenant with another person gives him or her immediate rights to the real estate, even before you pass away. A risk in putting title in joint tenancy is that your joint tenant may become incapacitated, or involved with the wrong people who may take advantage or him or her.

If you own real estate, you need an estate plan. Call our Los Angeles attorneys today to talk about your family and real estate planning, and what we can do. 818.340.4479.

Drafting an enforceable Last Will and Testament is one of the simplest, most straight-forward, and important ways you can ensure that your assets are inherited and distributed according to your wishes.  You can make sure that your favorite niece receives your art collection, your home is passed to your children, and your preferred charity receives the contents of your savings account.  If you do not have a Will at the time of your death, you are said to have died “intestate.”  Intestacy laws tell the court how to divide your estate in the absence of a valid Will.  Intestacy laws vary considerably depending on your family, but, in general, the law is set up such that your closest relatives will inherit your property.  If you have children, but no spouse, your children inherit all of your assets.  Similarly, if you have a spouse, but no children, parents or siblings, your spouse will inherit your entire estate.  However, for example, if you have a spouse and surviving parents, your spouse will inherit all community property, but only half of your separate property.  The rest will go to your parents.  If you have both a spouse and children at the time of your death, your spouse will inherit all of your community property, but only a percentage of your separate property.  Your children will share the remainder.

These laws may seem logical, but using intestacy laws to distribute your assets is not a good estate plan.  First, intestacy laws provide no consideration for close friends, step-children, or any other person who is not closely related to you.  This could mean that your estranged sibling inherits from your estate while your friend who provided you with caring love and support at the end of your receives nothing.  Second, the intestacy laws do not consider need.  You may wish to help provide a financial boost to one struggling relative by giving him or her a large portion of your assets, but the intestacy laws do not take the financial status of the potential heirs into account.  Finally, if you have no family at the time of your death, your assets will go to the state.  If you make a Will, you can choose a charity or other cause to help fund instead of simply pouring your hard-earned assets into the state’s coffers.

Sirkin Law’s California attorneys have extensive experience with helping our clients to draft thoughtful and enforceable Wills to avoid intestacy and receive benefits under California inheritance laws. In Los Angeles, Call us today to set up an appointment.