Create a Special Needs Trust to Protect the Financial Future of Your Child with Special Needs

July 30, 2018

It always surprises me to hear parents who have a child with special needs tell me that they were not aware of what they needed to do to ensure the future well-being and care of their child is properly handled. Or sometimes, they tell me they didn’t know they needed to do anything at all. If that’s you, and you have a child with special needs at home, this article is for you. And if you have friends or family who have a child with special needs, please share this article with them. Every parent who has a child with special needs must understand what’s needed to provide for the emotional, physical, and financial needs of their child, if and when something happens to them. Naming guardians Of course, the first and most critical step in ensuring the well-being and care of your child with special needs’ future is to name both short and long-term legal guardians to take custody of and care of your child, in the event of your death or incapacity. And as you well know, this responsibility doesn’t end at age 18, if your child will not grow into an adult who can independently care for him or herself. While we understand this lifetime responsibility probably feels overwhelming, we’ve been told repeatedly by parents that naming legal guardians in writing and knowing their child will be cared for in the way they want, by the people they want, creates immense relief. We frequently build in plans where the named guardians are properly instructed—and even incentivized—to give your child the same care you provide. For example, we’ve created plans whereby the named guardian is compensated for taking the child to dinner and the movies weekly, or doing something similar if this is something the child used to enjoy doing with his or her parents. But without written instructions (and perhaps compensation) built into the plan, fun activities like this can often go by the wayside when you’re no longer available. For guidance on selecting legal guardians and properly instructing them to provide your child with special needs the same level of care and attention you do, consult with us as your Personal Family Lawyer®. Beyond naming a guardian, you’ll  also need to provide financial resources to allow your child to live out his or her life in the manner you desire. This is where things can get tricky for children with special needs. In fact, it may seem like a “Catch-22” situation. You want to leave your child enough money to afford the support they need to live a comfortable life. Yet, if you leave money directly to a person with special needs, you risk disqualifying him or her for government benefits. Special Needs Trusts Fortunately, the government allows assets to be held in what’s known as a “special needs trust” to provide supplemental financial resources for a physically, mentally, or developmentally disabled child without affecting his or her eligibility for public healthcare and income assistance benefits. However, the rules for such trusts are complicated and can vary greatly between different states, so you should work with […]

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Squabbles Between Alan Thicke’s Heirs Highlight the Importance of Properly Drafted and Updated Estate Planning

July 23, 2018

In the 1980s, the late actor Alan Thicke played the wise-but-hip father figure and psychiatrist Dr. Jason Seaver in the sitcom Growing Pains. Following Alan’s sudden death in December 2016, with his children and widow battling over his estate, one can only wonder what sage advice Dr. Seaver would have had for Thicke’s heirs. Alan collapsed and died from a heart attack at age 69, while playing ice hockey with his youngest son, Carter. Unlike some celebrities, he had a fairly comprehensive estate plan. But with three marriages, three sons from two of those unions, and an estate worth an estimated $40 million, the planning is proving insufficient to stave off family feuding. Stepmom vs. Stepchildren Specifically, Alan’s two oldest sons—Robin and Brennan—have been fighting his third wife, Tanya Callau Thicke, for almost two years. The first petition filed in California Superior Court in May 2016 by Robin and Brennan—who are co-trustees of their late father’s estate—sought clarification of conflicting terms in Alan’s living trust and a prenuptial agreement he and Tanya signed before getting married in 2005. At issue was the division of Alan’s $3.5 million ranch in Carpinteria, where he and Tanya lived. The prenup states that Tanya would get 25% of his net estate, including a five-acre parcel of the ranch property. However, the trust—last updated in 2016—doesn’t grant her any ownership of the ranch, only the right to live there provided she pays all of the expenses. Robin and Brennan’s petition alleged that Tanya demanded a larger portion of Alan’s estate than she was allocated in the trust and that she planned to contest the validity of the prenuptial agreement. Tanya claimed her stepsons’ legal claim was merely aimed at smearing her in the media, and she never had any intention of challenging the prenup. Other reports allege the petition was retaliation for Tanya’s refusal to allow the brothers to convert the ranch into a medical marijuana farm. In September 2017, a judge rejected the sibling’s petition to block Tanya from challenging the prenup, finding there was no evidence she ever planned to take such action. A Breach of Duties? More recently in May 2018, Tanya filed papers accusing Robin and Brennan of violating their fiduciary duties as co-trustees. She claims they’re spending the estate assets recklessly, failing to pay her share of the inheritance, unfairly saddling her with taxes and other expenses that are not her responsibility, and failing to keep her clearly informed about estate proceedings. One of her specific complaints asserts the brothers refused to reimburse her for a monument she placed at Alan’s gravesite. This claim was exacerbated by reports that the older brother Robin was reimbursed $105,000 for an elaborate memorial party he threw the night before his father’s burial. Tanya plans to file a lawsuit against the siblings if they don’t meet her demands. And her suit may have merit, as trustees owe a fiduciary duty to act in the best interests of beneficiaries and account for all financial transactions related to the trust. Lessons Learned Though we’ll have to wait and see how Robin and Brennan react to Tanya’s […]

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What You Should Know About Guardianship—In Case A Parent or Loved One Becomes Incapacitated

July 16, 2018

Whether through illness, injury, or other means, anyone can require a guardian to become appointed if they become mentally incapacitated. In such cases, if there is no estate planning in place (or insufficient planning) to keep family or other loved ones out of court, a guardianship, or conservatorship as it is sometimes called, must be established via a court process in the county probate court. Obtaining guardianship can be an extraordinarily challenging and expensive process. It begins with filing a petition in court for guardianship and requesting the court declare the incapacitated person incompetent. In some cases, these types of filings are made “ex parte”, or in secret, and a guardianship can be established before family or close friends even know what’s happening. In other cases, such a filing can result in a heated dispute between family members and/or friends, who may claim they’d be better suited for the role. Given this, things can get quite costly very quickly. Of course, this assumes these matters haven’t already been decided through proper and up-to-date estate planning, including a valid durable power of attorney and advance health care directives, which are the best methods for ensuring this massive responsibility is handled as effectively as possible. Sadly, most people don’t think of the costly possibility of incapacity and therefore leave their families at risk. If you do have a loved one who needs a guardian, here are some of the things you’ll need to know: Who can be appointed as guardian? Unless specified in a valid legal document, any family member or other interested person can petition for guardianship—even a close friend can do it if they prove they’re best suited for the position. That said, most courts give preference to the ward’s spouse or other close family members. In some cases, the guardian is required to post a bond, which typically requires good credit and some level of deposit to be held in the event of the guardian’s wrongdoing. This bond requirement often disqualifies friends and family, who either don’t have good credit or the resources to post a bond. If a relative or friend is not willing—or capable—of serving, the court will appoint a professional guardian or public guardian. This is one of the ways that an estate can be drained extremely quickly. If you want to hear more about how this can happen, read this terrifying article about the way public and professional guardians are stealing from our elders. When are guardians appointed? A guardian will only be appointed if a court determines there is enough evidence to show a person is mentally incapacitated, such that they can no longer make legal, financial, and/or health-care decisions. What are a guardian’s responsibilities? Depending on the extent of the ward’s mental capacity, a court-appointed guardian can be given near complete control over a person’s life and finances. Some of the most common duties include: Paying the ward’s bills Determining where they live Monitoring their residence and living conditions Providing consent for medical treatments Deciding how their finances are handled, including how their assets are invested and if any assets should be liquidated […]

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Safeguard Your Cryptocurrency Assets With Estate Planning

July 10, 2018

One of the biggest appeals of cryptocurrency, like Bitcoin, is that it is decentralized, unregulated, and anonymous. There are no financial institutions controlling it, and unless you tell someone you own digital currency, it remains a secret. When it comes to estate planning that kind of secrecy can be disastrous. In fact, without the appropriate planning protections in place, all of your crypto wealth will disappear the moment you die or become incapacitated, leaving your family with absolutely no way to recover it. Indeed, we’re facing a potential crisis whereby millions—perhaps billions—of dollars’ worth of family wealth could potentially vanish into thin air unless you take action to protect your digital assets with estate planning. Fortunately, putting the appropriate safeguards in place is a fairly simple process for a Personal Family Lawyer® experienced with cryptocurrency. The first step in securing your crypto assets is to let your heirs know you own it. This can be done by including your digital currency in your net-worth statement listing all of your assets and liabilities. Along with the amount of cryptocurrency you own, you should also include detailed instructions about where it’s located and how to find the instructions to access it. But you want those instructions to be kept in an absolutely secure location because anyone who has them can take your cryptocurrency. Even if your heirs know you own cryptocurrency, they won’t be able to access it unless they know the encrypted passcodes needed to unlock your account. Indeed, there are numerous stories of crypto owners losing their own passcodes and then being so desperate to recover or remember them that they dug through trash cans and even hired hypnotists. The best way to secure your passcodes is by storing them in a digital wallet. The safest option is a “cold” wallet, or one that is not connected to the internet and thus cannot be hacked. Cold wallets include USB drives as well as “paper” wallets, which are simply the passcodes printed on paper—and ideally stored in a fireproof safe. But as with the existence of your crypto assets, the only way these wallets are of any use to your heirs is for them to know where they are and how to access them in the event of your incapacity or death. So make sure these instructions are included in your estate plan and your Personal Family Lawyer® knows about the assets and where to locate the instructions on how to access them. Just as it would be foolish to store your money in a secret safe and not tell anybody where it is or give them the combination to open it, it’s just as foolhardy not to take the appropriate steps to protect your cryptocurrency through proper estate planning. Since digital currency is such a recent phenomenon, not all estate planning attorneys are familiar with it, but with us as your Personal Family Lawyer®, you can rest assured we have the knowledge and experience to help you safeguard your digital wealth just as effectively as all of your other assets. This article is a service of Bob Prousalis, Personal Family […]

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I Don’t Have Kids, So Why Do I Need Estate Planning? Part 2

July 4, 2018

Last week, we shared the first part of our series on the importance of estate planning for those without children. If you haven’t read it yet, you can do so here. Here in part two, we discuss the other risks involved for those who forego estate planning. www.propaplaw.com/blog Someone will have power over your health care Estate planning isn’t just about passing on your assets when you die. In fact, some of the most critical parts of planning have nothing to do with your money at all, but are aimed at protecting you while you’re still very much alive. Advance planning allows you to name the person you want to make healthcare decisions for you if you’re incapacitated and unable to make decisions yourself. For example, if you’re temporarily unconscious following a car accident and unable to give doctors permission to perform a potentially risky medical treatment, it’s not always clear who’ll be asked to make that decision for you. If you have a romantic partner but aren’t married and haven’t granted them medical power of attorney, the court will likely have a family member, not your partner, make that decision. Depending on your family, that person may make decisions contrary to what you or your partner would want. Indeed, if you don’t want your estranged brother to inherit your property, you probably don’t want him to have the power to make life-and-death decisions about your medical care, either. But that’s exactly what could happen if you don’t proactively plan. Even worse, your family members who have priority to make decisions for you could keep your dearest friends away from your bedside in the event of your hospitalization or incapacity. Or family members who don’t share your values about the types of food you eat, or the types of medical care you receive, could be the one’s making decisions about how you’ll be cared for. Even if, or maybe especially if, you don’t have kids, you need to do estate planning in order to name health care decisions-makers for yourself and provide instructions on how you want decisions made. Someone will get power over your finances As with health-care decisions, if you become incapacitated and haven’t legally named someone to handle your finances while you’re unable to do so, the court will pick someone for you. The way to avoid this is by naming someone you trust to hold power of attorney for you in the event of your incapacity. Durable power of attorney is an estate planning tool that gives the person you choose immediate authority to manage your financial matters if you’re incapacitated. This agent will have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting your Social Security benefits, selling your home, as well as managing your banking and investment accounts. Because these powers are so broad, it’s critical that you only give this power to someone you absolutely trust, and ideally, with the guidance of a lawyer who can watch out for your best interests. The fact that durable power of attorney is granted as soon as […]

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I Don’t Have Kids, So Why Do I Need Estate Planning? Part 1

June 26, 2018

It’s a common misconception to think that if you don’t have children, you  don’t need to worry about estate planning. But the fact is, it can be even MORE important to do estate planning if you have no children.

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Ensure the Security of Your Senior Parents’ Identity and Financial Assets

June 19, 2018

Today, we live in an uber-connected world, where nearly every type of financial transaction—shopping, banking, investment management—can be made online using a computer or mobile device.

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6 Steps to Select and Name the Right Guardians for Your Children—Part 2

June 12, 2018

Last week, we shared the first part of our series on selecting and naming the right guardians for your children. If you haven’t read it yet, you can do so here. Here in part two, we discuss the final three steps in the process. propaplaw.kidsprotectionplan.com

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6 Steps to Select and Name the Right Guardians for Your Children—Part 1

June 5, 2018

One of your most important responsibilities as a parent is to select and legally document guardians for your children. This doesn’t mean just naming godparents or trusting the grandparents will step in if necessary. It means consciously deciding who would raise your children if you cannot. And then it means legally documenting your choices and making sure the people you’ve chosen know what to do if they’re ever called upon.

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Estate Planning Mistakes Seniors (Including You or Your Parents) Can’t Afford to Make

May 29, 2018

Estate planning really should be considered as soon as you acquire your first asset, have a child, or step into adulthood in any truly meaningful way. And yet many of us put it off for far too long, leaving ourselves and our families at risk of getting stuck in the court system in the event of an unexpected accident, illness, or injury.

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