Trusts and Estates Blog

Estate Planning Before It’s Too Late

Family lying outdoors smiling (asian)As many people grow older, they seem to lose track of time when it comes to estate planning and creating a will. Too often, children are left trying to create a will for their parents after they’ve lost the ability to make legal decisions themselves. Aside from spending much money to establish conservatorship, nothing can legally be done to plan the estate of someone who’s lost their mental capacity.

Rather than putting off estate planning, why not settle that issue right away? Here are some basic legal facts you should know when going into the estate planning process.

Don’t make your family go through probate. If you don’t plan for the allocation of your assets, your children will have to endure a lengthy and costly probate process to inherit any of your estate. You may be reluctant to incur the fees of creating a will right now, but your children, spouse, or grandchildren will incur much more costs to settle your estate after you’re gone. Probate can be easily avoided by planning your estate now.

If you own property, you need an estate plan. Estate planning isn’t difficult. In fact, in its basic form, an estate plan is a written set of documents stating one’s wishes for the distribution of his/her property after death. Property includes everything you own—real estate, securities, monies, home(s), and any tangible items you possess. If you possess any property (even if it doesn’t seem much), you would benefit from having an estate plan.

What keeps people from estate planning? Procrastination, busyness, bad planning, lack of funds—all these issues can keep people from properly planning for the distribution of their estate. Many excuses seem like good reasons, yet when it comes to estate planning, no excuse will help when family is forced to endure legal battles to settle an unplanned estate. What’s your excuse for not planning your estate?

Don’t wait.
If you wait until dementia incapacitates you or a member of your family, you won’t legal be allowed to create a legal document such as a will or trust. Don’t wait until estate planning can’t happen. Begin now by speaking with an attorney or making a list of all your assets.

Be proactive. Think not only of yourself and your estate but of your family who will be forced to deal with your estate if you fail to legally plan for its distribution. Don’t put your family through that battle, but give them the gift of peace of mind, knowing your estate is already settled.

Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) offers sophisticated estate planning and administration for the affluent, discriminating client. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve these clients with the creative, effective and custom solutions they demand. For more information, contact TVT at 661-945-5868 or visit their website at www.EstatePlanningSpecialists.com.

Why Staying Active is Important as We Age

Senior couple on cycle rideAs our bodies grow older, they slow down and tend to want to move as little as possible. After all, we’ve spent our lives keeping up with the rat race, rushing between appointments, caring for children, and working at our careers. Isn’t it time for a break, time for some rest?

It’s easy to think that resting our bodies will help them avoid injury or sickness, but the opposite is actually true. Our bodies need to keep moving in order to prevent degeneration. Exercise lowers your risk for obesity, heart disease, diabetes, colon cancer, high blood pressure, and other problems. In fact, one aging expert wrote, “Biologically you can reverse the aging process by 15 to 25 years.”

Certain test results also show that continual activity can reverse the affects of age-related brain decline. Aerobic exercise can improve task coordination, planning, goal maintenance, working memory, and the ability to switch between tasks. Results also showed that regular moderate levels of exercise (activity that leaves you breathless) can increase the speed and sharpness of thought, the volume of brain tissues, and the efficiency of brain function.

Staying active becomes more important as you grow older. While you may not be able to run several miles or be as active as you once were, there are some simple ways to keep your body moving. (Be sure to consult a doctor before beginning any sort of exercise routine.)

Start low and build. If your body isn’t used to regular activity, don’t overwhelm it with sudden, intense activity. Start small with ten minutes of walking a day, fifteen minutes spent gardening, a walk around your block or at the mall, or other light activities.

If something hurts, stop. There’s no need to push through any sort of pain or irritation in your body. If you begin feeling discomfort, take a break or wait until later to continue your activity.

Be comfortable. Wear comfortable clothing and especially comfortable shoes. Make sure you feel comfortable at all times during your exercising.

Stay hydrated. One of the most important things to remember is to stay hydrated. Keep a bottle of water nearby and take regular breaks to re-hydrate your body. Don’t ever go through long periods of activity without stopping for water.

Choose activities you enjoy. Activity and exercise doesn’t have to be a dreaded routine. Find something active you enjoy doing (a swim class at the local YMCA, gardening, walking around the mall, etc.) and find someone to exercise with you. When you enjoy your time being active, you’re more likely to keep up with it.

By staying active and exercising regularly (even a few times a week), you should notice increased flexibility and ease of motion. Also, the activity could help eliminate some of your medication and give you increased energy to try other things during this stage of your life.

The Three Types of Special Needs Trusts

Young girl in wheelchairWhen debating whether to establish a Special Needs Trust (SNT) for yourself (if you are the one who is disabled) or a loved one, you must consider which type of trust is best for you. Here are three types of Special Needs Trusts and how they help beneficiaries:

First Party Special Needs Trusts

This type of trust is funded by assets owned by the beneficiary. The trust is established to protect current or future benefits if the beneficiary is about to receive a settlement, inheritance, or other monies that would put them over the benefit limit of countable assets. These trusts are for people under the age of 65.

First Party trusts are most common when the beneficiary’s disability is due to an accident, injury, or another person from which the beneficiary will receive a settlement. Also, this trust can be used to protect the benefits from any inheritances or well-meaning gifts from others.

This type of SNT is called First Party because the money is treated as belonging to the person who will benefit from the SNT. The money or property legally belongs to the beneficiary of the SNT. In the case of an inheritance, a First Party SNT will be used when the parents did not create a SNT in their estate plan, and the inheritance will disqualify the child from their benefits. The right of the child to create a SNT in this scenario was created by federal law in 1993. In the case of a personal injury settlement, the settlement proceeds also belong to the person benefiting from the trust. After the beneficiary dies, federal law requires that the government be paid back for certain benefits paid to the beneficiary.

Third Party Special Needs Trusts

Unlike the First Party trust, the Third Party Special Needs Trust is funded by assets from parents, relatives, and friends—not from assets owned by the beneficiary. Third Party trusts are ideal for parents, grandparents, and family members who wish to leave monies or an inheritance to persons with disabilities. This is the most common type of SNT we deal with.

Also of note is that with Third Party trusts, unlike the other two, when the beneficiary dies, Medicaid/Medi-Cal payback is not required. The establisher of the trust has complete control over selection of the trust remainder beneficiaries.

Much thought and consideration should be given to the establishment of Special Needs Trusts, especially if you care for a loved one with disabilities. While beneficial, the trust must be set up in a very specific manner to avoid the loss of public benefits. Special Needs Trusts are a sub-specialty of estate planning, and they are very complex.

Pooled Trusts

This type of SNT is the only option if the money or property belongs to the beneficiary AND the beneficiary is over the age of 65. This trust is also funded by a beneficiary’s assets – just like a First Party SNT. If the beneficiary is receiving a small settlement or sum, the First Party Special Needs Trust would may be the best option due to the cost of maintaining the First Party SNT. Also, if the beneficiary has no immediate family members to act as trustee, a pooled trust would be preferred.

Pooled trusts are established and managed by nonprofit organizations. The assets are held by the organization and pooled for use in investment opportunities, but the assets are also managed in a sub account for the beneficiary.

If you would like more information concerning Special Needs Trusts, contact Antelope Valley estate planning law firm Thompson | Von Tungeln (TVT) at 661-945-5868 or visit their website at www.EstatePlanningSpecialists.com. EstatePlanningSpecialists.com is a comprehensive online resource for personal wealth management solutions through wills and revocable trusts. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve clients with the creative, effective and custom solutions they demand.

Understanding Special Needs Trusts

Disabled Child with Cerebral PalsySpecial Needs Trusts are trusts designed specifically for people with disabilities. The disability could be from birth, an accident or from addiction. One of the benefits of designating a special needs trust is that the assets of the trust are not directly accessible by the beneficiary, and therefore not counted when accessing financial ability for public benefits. Special needs trusts can be created with the disabled person’s own money, or they can be created with other people’s money, such as parents leaving money to disabled children upon the parents’ passing.

The special needs trust can be used for a myriad of things, including purchasing a home for the beneficiary under the right circumstances, special medical services not covered by medical insurance (therapy, wheelchairs, handicap accessible vans, and medical beds), recreational trips, and any services or items that would enhance the beneficiary’s life.

A few requirements must be met before establishing a Special Needs Trust:

–The trustee must have absolute control. The beneficiary (or the parents who are passing down in inheritance) must give control of the assets and distribution of the assets to the trustee, and no beneficiary or someone acting on the beneficiary’s behalf can demand the assets.

–The beneficiary cannot revoke or amend the trust. The beneficiary can have no say in the trust so as to keep the distance between the assets and the beneficiary. If the beneficiary has control over any part of the assets it will be counted as part of his available resources and his public benefits could be revoked.

–The trustee cannot give cash to the beneficiary. If the beneficiary is receiving Social Security insurance, the trustee cannot pay the beneficiary in cash. If so, the beneficiary would either lose his public benefits completely or lose part of it based on how much cash was received.

A special needs trust can be a sound way to supplement a reduced income during time of disability, but be sure to meet the requirements of the trust or else your public benefits can be cut or even eliminated. Seek the counsel of a law professional when determining whether or not to establish such a trust.

If you would like more information concerning special needs trusts, contact Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) at 661-945-5868 or visit their website at www.EstatePlanningSpecialists.com. EstatePlanningSpecialists.com is a comprehensive online resource for personal wealth management solutions through wills and revocable trusts. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve clients with the creative, effective and custom solutions they demand.

Trusts and Estates Blog