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Redlands California Estate Planning Blog

What to know about long-term care planning

It is not uncommon for individuals in California and elsewhere to be responsible for finding long-term care for an elderly family member. However, a person will usually have many questions as it relates to finding such care. For instance, there may be questions about how to pay for it or which facility offers the best service. It can also be challenging to tell a parent or grandparent that he or she needs to be in a long-term care facility.

It can be a good idea to bring up the subject of long-term care in broad terms at first. For instance, an individual could tell a parent about an article that he or she read about the topic. From there, that person may talk more about the services provided and how it could be an option if a parent can't take care of their basic needs anymore.

Aretha Franklin's estate remains in dispute

The death of a loved one in California can bring out surprising claims on an estate, especially if the loved one was wealthy or famous. Aretha Franklin, the celebrated performer known as the "Queen of Soul," passed away in August 2018 at the age of 76 after a battle with pancreatic cancer. Despite having an estate worth millions of dollars and a valuable music catalog, she left behind no will or trusts to disperse her assets. As a result, relatives and others have jumped into the fray to make a claim on the estate.

The Oakland County Probate Court near Detroit is handling the estate, and filings indicate that Franklin's ex-husband is seeking a share of her music royalties. The former husband is the dad of one of Franklin's four sons, who is already an heir under state intestacy laws. Franklin was married and divorced twice during her life. Another of Franklin's sons filed a request urging a higher level of financial disclosure from the estate during processing. The estate responded by saying that this demand would be excessively expensive.

Estate planning when a loved one is addicted

Many people in California have loved ones who are struggling with addictions. People often want to leave behind bequests to their family members, but wonder how to do so in a way that is responsible when the recipient has a substance use disorder. This question is increasingly common, especially as the opioid crisis has spread across the United States. In 2016 alone, over 42,000 people died as a result of opiate use, five times the death rate in 1999. Addiction can lead to difficult relationships and dangerous, even criminal, behavior, but many people love and want to support their addicted loved ones.

When they are planning their estates, people may want to leave assets to a family member with an addiction but also exercise some controls. These controls are not intended only to protect the financial assets themselves, but also to encourage the recipient to seek treatment. In fact, estate planning can provide mechanisms that help to protect vulnerable adults and provide support for addicted people. A simple lump sum distribution of funds can even be deadly, leading to an overdose or exploitation.

Benefit recipients may need to wait for their first payment

There are many factors that may determine how quickly a California resident may receive their disability benefits. For example, those who had their initial applications approved will generally get benefits quicker than those who were approved at a hearing. This is because an approval is not immediately sent for processing. Instead, the decision is created by a separate entity who then sends it to a judge for approval.

From there, it is sent to a payment center to be processed. Therefore, it may be two months before a person receives payment after their application has been approved. When an application is approved at the initial application or reconsideration level, the application is sent for processing almost immediately. If a person has a future month of entitlement, there could be a delay of at least five months before payment is received.

Severe impairment needed to receive disability benefits

People in California who are unable to work due to their disabilities may wonder what they need to show in order to be approved to receive Social Security Disability Insurance. The severity of a person's medical condition is one of the major components of a successful claim for benefits. It is the first issue taken up by disability examiners for the Social Security Administration when assessing a new application, especially when making a medical vocational allowance.

A medical vocational allowance is an approval for Social Security disability benefits for a condition that is not explicitly provided for in the SSA's list of impairments. While some applicants' conditions are listed explicitly, most are approved on the basis of a medical vocational allowance. The first step in assessing a claim is determining whether the applicant's impairment is severe. This question refers to both physical and psychological disabilities. If the disability examiner believes that there is insufficient medical evidence to back up a claim of severity or that the applicant's limitations do not preclude employment, the application may be denied on the basis of non-severe impairment.

Appealing a denial notice for SSD benefits

When people in California apply for Social Security Disability benefits, the funds are often much-needed, especially as the applicant can no longer return to work. However, many people are denied when applying for SSD, especially at the first stages of the process. The majority of claims are denied at the first level of benefits application, and even more are denied under a reconsideration appeal. However, moving further in the process allows applicants the ability to present more information and strengthen their case, giving a higher likelihood of a successful outcome.

If an applicant receives a letter from the Social Security Administration denying an application for disability benefits, it is important to file a timely appeal within the guidelines provided by the SSA. Appeal paperwork must be received within 60 days after the date of the denial, indicated on the upper right corner of the denial notice. In general, applicants have five extra days to account for mailing problems, for a total of 65 days. When people receive a denial notice, they can act to move forward by immediately reaching out for the appeal forms required to take the next step.

Possibilities with second trusts for estate planning purposes

It's not unusual for individuals in California looking to effectively manage their estate to establish a trust for this purpose. But there are times when someone with an existing trust may consider creating a second one. This brings to mind a related question - does a second trust revoke the first one? Generally, the answer is no since a trust is not like will in that a new one will not replace the original or prior one. This is because wills usually contain a clause that states that a new one revokes any prior documents of this nature.

The basics of trusts and trust administration are different than what applies to wills. However, it is possible for a second trust to be a restatement and amendment of the first trust; although it would technically still be considered an "amendment" and not an entirely new trust that revokes the first one. Legally, it may be possible to include a provision in a new trust that would revoke any other ones, but there are other less complicated ways to achieve the same goal.

Applying for Social Security Disability: The first steps

The path from the first steps of a Social Security Disability claim to final approval can be challenging for California applicants. However, understanding what happens after a claim is submitted can help people feel as if they have a better grasp of the process taking place. When people first apply for SSD benefits, their application is sent to disability determination services, a state agency, for further processing. A caseworker or disability examiner will be assigned to the claimant's application to review materials and investigate the file.

The first step for most disability examiners is reaching out to the medical sources provided by the applicant to obtain the relevant medical records for review. If these records are 90 days past or older, they may be considered outdated, requiring further review. In this case, the disability examiner will contact the claimant to come in for a consultative examination performed by a doctor working for Social Security. These exams are rarely as useful as those performed by an applicant's own doctor, especially as the physician involved has little knowledge of the claimant's medical history and additional symptoms. In addition, this type of exam rarely leads to approval for disability benefits except when the applicant's condition can be clearly and objectively tested.

Using beneficiary designations to avoid probate

When a person passes, his or her assets may need to go through probate. However, there are ways in which an individual in California and most other states can keep some or all assets from going through this process. Those who own a home, car or financial asset may be able to add a beneficiary designation to these assets. It may also be possible to create a transfer on death or a payable on death designation, also known as a TOD or POD, respectively.

It is important to understand that these designations will override anything that is put in a will. Therefore, if a will says that a child receives a vehicle, this will be null and void if there is a beneficiary designation saying that another child gets it. If a person creates a TOD deed, a beneficiary will receive a home or other real estate when the current owner passes. However, the beneficiary does not receive an ownership stake while this person is still alive.

Estate planning in retirement: Details requiring your attention

Estate planning in your younger days is much different than estate planning for the second half of your life. As you reach retirement age, there are specific details that deserve your attention.

Even if you've put a lot of time into estate planning in your younger days, it doesn't mean you can forget about this after you hang up your work boots. Instead, focus on the following details to ensure that you, your family and your finances are in order.

  • Passing on your assets: This is what most people think about when creating an estate plan. Be clear in regard to who gets what upon your death. There are many ways to do so, including a will, a trust and naming retirement plan and life insurance beneficiaries. These things can require changes over time, so review them often.
  • Lowering your taxes: This may not save you money, but it will go a long way in putting your loved ones in a better financial position. For example, you can use a trust to decrease the amount of your estate that is subject to taxes. Minor changes can lead to big tax savings upon your death.
  • A plan for future care: You hope you're healthy until the day you pass, but you realize this isn't always the way things work out. There are many things to think about in regard to future care, such as how you will pay for a nursing care facility and who will make important medical decisions if you're unable to do so. It may be time to learn more about a living will and health care proxy.

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