A common worry among older adults is that they will go into a nursing home and spend all of their retirement savings on skilled care. This is a realistic concern, considering that 70% of people aged 65 and older will spend some time in a nursing home. When you realize that the monthly cost of a nursing home in California is about $13,000, you understand that it won’t take long before your savings are thoroughly depleted.

However, with advance planning and examining your options, you can create an estate plan that will protect your retirement savings, no matter what may happen in the future.

Estate Planning Goes Beyond Asset Distribution

There’s a misconception that estate planning is something only done by rich, elderly people to ensure their belongings are distributed to their heirs after they die. In truth, estate planning is something every adult should do.

Estate planning is more than just creating a will outlining your final wishes. It’s also planning for the unexpected and asset protection. Estate planning also involves:

• Naming a power of attorney to act on your behalf if you’re incapacitated
• Providing advanced directives regarding end-of-life care
• Creating trusts and naming a guardian for minor children or ones with special needs

Asset Protection Trusts

You’ve spent several years saving for your retirement. Ensuring your savings are well-protected within your estate plan is just as important. 

Medi-Cal is a joint federal and state program that can help pay for nursing home care if you meet certain financial eligibility requirements. This means that you will need to pay for your care until your savings have been spent far enough to be eligible for Medi-Cal.

An irrevocable trust can help protect your assets from being counted towards Medi-Cal eligibility. Assets transferred to this trust are no longer considered your property, allowing you to qualify for Medi-Cal. By transferring your assets into an irrevocable trust, you can protect them from being used to pay for long-term care. You can still receive income from the trust’s assets, providing financial support during your lifetime. 

Not only will a properly structured trust protect your retirement savings, but it can also offer tax advantages. When you pass away, the assets will automatically transfer to your beneficiaries without going through the probate process.

Protecting Your Retirement Savings with Long-Term Care Insurance

Long-term care insurance is another effective strategy to protect your retirement savings. This type of insurance specifically covers the cost of nursing home care, in-home care, and other long-term care services.

You should choose a policy that covers a broad range of services and provides sufficient coverage to meet potential future needs. 

Early Planning is Critical

Protecting your retirement savings requires careful planning and the right strategies. The earlier you start planning, the more options you have, and it helps ensure you are not caught off-guard by sudden healthcare needs. Our attorneys at Lonich Patton Ehrlich Policastri have extensive expertise in estate planning and asset protection. We will work with you to develop a comprehensive plan tailored to your situation. 

Contact us for a free consultation by calling (408) 553-0801. Being well-prepared for any eventuality will allow you to enjoy your retirement with peace of mind.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

Estate planning is essential to protect your family’s future, especially if you have children. Having a plan in place before the unexpected occurs can make an otherwise stressful situation more manageable and ensure the best possible situation for your family. Depending on your children’s ages and needs and the size of your estate, though, different solutions might be the most appropriate way for you to leave money to your children. The following are some options to consider.

Establish a Trust

In many cases, especially if your children are minors or have special needs, a trust is an excellent way to provide for them, establish specific guidelines for the distribution of your assets, and protect their interests. It’s important to understand the different types of trusts that are available to pick the one that’s most appropriate to your specific situation. 

Revocable Trust

Also known as a living trust, a revocable trust sets out in writing what you want to happen to your assets in the case of your death. You maintain control over all assets you place in your living trust throughout your lifetime and can make changes and updates as needed. The main advantages of a revocable trust are that you can avoid the lengthy and expensive probate process and can have a trusted friend or family member manage the assets if you are incapacitated. 

Irrevocable Trust

An irrevocable trust, comes in many forms, one of the most common is known as a life insurance trust.  An irrevocable trust cannot be changed once it is established but it can offer significant tax savings and asset protection for your family. If you have a large estate, an irrevocable trust might be a good choice. 

Special Needs Trust

If you want to provide for your child’s special needs without affecting their eligibility for government-funded benefits, consider establishing a special needs trust. This type of trust allows you to designate a trustee who will manage the funds on your child’s behalf, ensuring their standard of living and care are properly maintained.

Set Up A College Savings Account

For older children, many parents choose to set up college savings’ accounts like 529 Plans to help cover future educational expenses. Assets in this type of account are excluded from annual gift taxes and estate taxes, however, your children must use the funds for educational purposes to avoid penalties, which makes them somewhat limited.

Designate Them as a Direct Beneficiary

Minors cannot receive assets directly, so you should only make your children direct beneficiaries if they are adults. Many legal documents – a will, insurance policies, retirement accounts, and bank accounts – require you to designate a beneficiary to receive the assets after your death. Designating your adult children as your direct beneficiary in these cases can be an effective way to pass on wealth. Just remember to go over your accounts and update them regularly. 

Consult with Estate Planning Professionals 

At Lonich Patton Ehrlich Policastri, we believe that estate planning should not use a one-size-fits-all approach. Instead, our Estate Planning Group works closely with every client to address their unique situation, needs, and wants. Our estate planning experts offer a full range of legal services, including setting up trusts and preparing wills. Call us today to schedule a free, no-obligation consultation to discuss your options.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

Approximately 75% of adults in the United States don’t have an estate plan, even though they understand the importance of having one. There are several reasons for this, but for some people, it’s a matter of feeling overwhelmed, which leads to procrastination.

However, estate planning is about being prepared if you become incapacitated, in addition to the distribution of your assets after you pass away. And we never know when either might happen. Procrastinating too long can mean too late, leading to multiple complications for your loved ones.

But it doesn’t need to be daunting, and a better understanding of the legal documents required for a comprehensive estate plan can help make the process less overwhelming.

Living Trust

A living trust allows you to place all your assets into a trust during your lifetime. You will still have access to them, but they are then transferred to your beneficiaries upon your death without going through probate, a costly and time-consuming process.

Last Will and Testament

A will is a legal document that outlines the distribution of your assets after you pass away. It also allows you to appoint an executor for your estate and designate guardians for minor children. If you have a living trust, you might consider creating a “Pour-Over Will,” which transfers any assets not included in the trust at the time of your death into it.

Power of Attorney

If you become incapacitated, someone will need to pay your bills and handle your financial affairs. Legal documents appointing a power of attorney will ensure your finances are managed according to your wishes.

Advanced Health Care Directive

An advanced health care directive specifies your medical treatment preferences if you cannot make decisions for yourself. You can also name someone as your medical power of attorney to make healthcare decisions on your behalf.

Beneficiary Designations

Ensure that all beneficiary designations on retirement accounts, life insurance policies, and other financial accounts are up-to-date and align with your overall estate plan. These designations often take precedence over instructions in your will.

Keep Paperwork Updated

Creating and maintaining a comprehensive list of bank statements, life insurance policies, statements from your investments and retirement plan accounts, and other vital financial documents is essential. Also, include copies of deeds for any real estate that you own. This will help your executor manage your estate efficiently and transfer property ownership according to your wishes.

Don’t Forget Your Digital Estate

In today’s digital world, much of our personal and financial business is conducted online. Therefore, it’s crucial to have a digital estate plan that lists your online accounts, usernames, and passwords. You can also stipulate how you want your social media accounts handled after your death.

LPEP Law Can Help with Your Estate Planning

The estate planning process is easier when you have someone advising you. Our attorneys at Lonich Patton Ehrlich Policastri can help you with your estate planning needs. We have extensive experience assisting individuals in San Jose and the greater Bay Area. Everyone’s situation is unique, and we will tailor your estate plan to align with your goals and final wishes and ensure they comply with California’s laws.

Contact us for a free consultation by calling (408) 553-0801.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

Going through a divorce is a multi-faceted process. There are so many things to be decided, such as spousal support, child custody, child support, and division of assets. You must also set up your own checking and savings account, create a new budget, and make new living arrangements. With everything going on and the emotional turmoil you are likely experiencing, you may forget about updating your estate plan. However, there are several reasons why revising your will should be a priority.

How Is Your Will Impacted by Your Divorce?

Specific provisions in your will may be automatically revoked when your divorce is completed per California Probate Code Section 6122. This includes voiding any gifts or inheritances designated for your former spouse. And if your will names your former spouse as the executor, the designation is revoked. Remember, during the pendency of your divorce, your will or trust remain in full force and effect. Consider an interim will during your divorce and then revisit the will once completed. 

Your Divorce’s Impact on Other Estate Planning Documents

If your spouse is named as your financial power of attorney or your healthcare proxy, you will want to remove them and appoint someone else. You will also need to update the beneficiary designations on life insurance policies and retirement accounts.

Considerations for Divorced Parents When Revising Their Will

If you have children, you will want to specify who you wish to act as guardian for your minor children if both you and your ex-spouse pass away. You will also likely want to set up trusts to manage your children’s inheritance until they reach adulthood.

How Do California’s Community Property Laws Impact Your Will?

Assets acquired during your marriage are generally considered community property and were subjected to division upon your divorce. This can affect the distribution of your estate. You must ensure that your will accurately reflects the division of assets as determined by the divorce settlement.

Another’s Divorce May Also Impact Your Will

We often name family members or close friends as guardians of our minor children if something were to happen to us and the other parent. If a couple is jointly named and they divorce, you must make sure that change is reflected in your will.

Revising Your Will After Your Divorce

Even though California automatically makes some changes to your will upon your divorce, it’s essential to update your will to reflect your new circumstances and intentions. You should explicitly revoke your previous will to prevent any confusion or legal disputes. You will then need to draft a new will designating new beneficiaries, executors, and guardians.

Consult an LPEP Attorney

Estate laws can be complex, especially immediately following your divorce. Our attorneys at Lonich Patton Ehrlich Policastri can assist you with both your divorce and revising your will.

Our lawyers have extensive expertise in handling all matters of family law and estate planning. We will thoroughly review all your documents and ensure they are correctly updated and legally sound. 

Contact us for a free consultation by calling (408) 553-0801. You will have the peace of mind of knowing that your assets are distributed according to your wishes and that your loved ones are provided for.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

Blended families bring unique joys and challenges, particularly when it comes to estate planning. Managing the diverse needs and expectations of a stepfamily requires careful consideration and clear communication to ensure that everyone’s interests are protected and family harmony is maintained. Here are some essential tips for navigating stepfamily dynamics in estate planning.

Understanding the Complexity of Blended Families

Blended families, in which one or both partners bring children from prior relationships, frequently encounter intricate emotional and financial challenges. Estate planning for such families involves more than just dividing assets; it requires addressing the unique relationships and potential conflicts that may arise.

Communication is Key for Estate Planning with Blended Families 

Effective communication is the cornerstone of successful estate planning in a blended family. It’s important to have open and honest discussions about each family member’s needs and expectations. This includes discussing potential scenarios and outcomes with your spouse and children. By fostering transparency, you can reduce misunderstandings and help ensure that your wishes are respected.

Setting Clear Goals and Priorities

Every blended family has its own set of dynamics and priorities. Establishing clear goals for your estate plan is crucial. Consider what you want to achieve, such as providing for your spouse, ensuring your children from previous relationships are taken care of, and minimizing potential conflicts.

Creating a Comprehensive Plan for Blended Family Estate Planning

It’s a good idea to work with an experienced estate planning attorney who understands the nuances of blended families. A comprehensive estate plan might include:

• Wills and Trusts: Specify how your assets will be distributed. Trusts can be particularly useful in managing and protecting assets for both your spouse and children.
• Beneficiary Designations: Ensure that life insurance policies, retirement accounts, and other assets have up-to-date beneficiary designations.
• Powers of Attorney and Health Care Directives: Appoint individuals to make financial and medical decisions on your behalf if you become incapacitated.

When you work with an estate planning attorney like our expert team at LPEP, you have the peace of mind that the best interests of you and your family are protected every step of the way. 

Protecting Your Spouse and Children During Estate Planning

Balancing the needs of your spouse with those of your children from previous relationships can be challenging. It’s important to ensure that your spouse has sufficient financial support without disinheriting your children.

Utilizing Trusts for Blended Family Estate Planning

Trusts are valuable tools for protecting your assets and ensuring that they are distributed according to your wishes. A Qualified Terminable Interest Property (QTIP) trust can provide income for your surviving spouse while preserving the principal for your children. A revocable living trust allows you to retain control of your assets during your lifetime and specify how they should be distributed after your death.

Fairness vs. Equality

Fair does not always mean equal, especially in blended families. Strive to balance fairness with the individual needs and circumstances of each family member. This might mean providing different levels of support to children based on their financial situations or needs.

Clear Documentation

Document your decisions clearly and explain the reasoning behind them. This can help your family understand your intentions and reduce the likelihood of disputes. Include letters of instruction with your estate plan to provide additional context and guidance.

Contact LPEP For a Professional Consultation 

At Lonich Patton Ehrlich Policastri, our experienced estate planning professionals provide a full range of legal estate planning services and have vast experience working with blended families in California. If you’re preparing a will or testament, work with our team to ensure your interests are protected every step of the way.

Contact LPEP today to schedule your free consultation. 

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.