You’ve all heard the stories of people losing their family homes when a person on Medi-Cal dies. They’re true. Medi-Cal can take your family’s home if an owner of the home was a Medi-Cal recipient. In fact, you are required to report the death of anyone who was a Medi-Cal recipient just so that they can decide if they are going to go after their assets or not.

When you send the notice to the Department of Healthcare Services, they will respond with a claim for repayment of all the payments they made after the Medi-Cal recipient turned 55 years old. This claim will be asserted against any assets the recipient owned when he died whether they are in a revocable living trust, a probate, an IRA or most other forms of ownership.

There are some limitations. Medi-Cal will not take the home while a spouse is still alive. In that situation, Medi-Cal will take the home when the surviving spouse dies. Now if the family is survived by a minor, blind or disabled child, Medi-Cal will not take the home at all. Finally, Medi-Cal cannot take the home if it has been properly transferred into a Medi-Cal House Trust.

With the Medi-Cal House Trust, the elder retains the right to live in the house for as long as he is able but the rest of the interest in the house is transferred to the beneficiaries of the trust (usually the children). A successful Medi-Cal House Trust ensures that the beneficiaries get a step-up in capital gains basis, that the house is not subject to estate tax, that the elder never has to move against his wishes and that Medi-Cal can make no claim against the property.

P.S. For those loyal readers who are interested, I’m delighted to announce my engagement to Bennett Braverman, another estate planning attorney.

This chapter is excerpted from a book forthcoming from the Academy of Special Needs Planners.

Someday my brother may have a family of one: me. Nathan is a 33 year old man with autism. He is high functioning but has severe apraxia and requires round-the-clock care.

Yesterday, my father and I brought him dinner from one of his favorite fast food restaurants. He didn’t eat with us because he won’t eat hot food until it has reached room temperature. I could tell he enjoyed our company because he asked questions, told us things he wanted, and laughed at my jokes to him.

I know I will have to take care of him. He will be my responsibility when my parents die. I had a sister who died but now there is only me, and all of our extended family lives out-of-state. I would like to move to another state to be with my fiancé but we plan on a long-distance marriage because Nathan needs me here. It is a big responsibility but I accept it willingly.

I know I will not be as selfless as a caregiver as my parents have been. I will rely on his paid caregivers to clean up vomit when he is sick. I will rely on those same caregivers to ensure that he gets out of the house regularly. But the buck will stop with me.

I am human and self-involved like most people, but I don’t resent the burden. I worry about my ability to handle it. As a single mom of twins and an entrepreneur, I pray my parents live a long time so that Nathan will not need me until after the twins are grown.

I think my parents understand what they are asking of me but I’m not sure they appreciate my willingness to do it. They take it for granted that of course I will do it. Sometimes I wonder if it would be nice to hear them say they appreciate the burden I have ahead of me and my willingness to take it on.

Nathan will never appreciate what I will do for him. He simply doesn’t understand how much is required to keep him in independent living. He loves my parents, I know, but doesn’t appreciate all they do for him. How could he? He didn’t appreciate it when I protected him from mean kids as we were growing up, but then he barely noticed their taunts.

As an estate planning attorney with a focus in special needs, it was only natural that I would create my parents’ estate plan. There is a special needs trust (SNT) and a revocable living trust that splits everything 50/50 between me and Nathan’s SNT. But my parents wanted to provide more for Nathan. I advised them to buy a life insurance policy payable to the SNT. Even though I am a special needs planner, even though I understand my brother’s limitations and my gifts, it would hurt my feelings if their trust split assets in any formula other than 50/50. So the life insurance policy is a good solution for us and for many of my clients.

I know that even with his SNT, Nathan will never enjoy the standard of living that I enjoy. He lives in a small one-bedroom apartment. I live in a spacious 5-bedroom house. He is dependent on others for every errand or outing. I have the freedom to follow my impulses and desires. But he has a freedom I never will: the freedom to take care of only himself.

The SNT and my care will provide Nathan with a much higher standard of living than he would enjoy without it. Without it, he could not afford his apartment. Without it, he would have to choose between food and rent. Without it, he would not be able to enjoy any of the extras that give his life joy. For example, Nathan loves to fly; he especially loves the take-offs and landings. The SNT provides that at least once or twice a year, Nathan is to take a lengthy plane trip with multiple takeoffs.

Without my care, Nathan would be left to the supervision of overburdened social and case workers. Without my devotion, Nathan’s SNT might not provide extras that are not explicitly listed in it.

This responsibility I carry is for life. I am only four years older than Nathan. He is healthy and should live to life expectancy. How will I care for him when I am in my 80s? What will happen to him if I die before he does? We have the same answers in my parents’ plan that I recommend for my clients: a corporate trustee with an advocate to oversee the quality of his care. But, like my clients, I know that will not substitute for family. It is a fond hope that my small children will grow to take over my role if that ever becomes necessary. But Nathan is not gregarious, fun and attractive. He is serious. He makes embarrassing noises in public. He has violent temper tantrums. Will they see through all his behaviors to the loving human being underneath who needs their love and care?

There are no easy answers. One thing I know: as they grow, my children will learn about Nathan’s needs. As they grow, I will share more with them about what my parents and eventually I need to do to keep him safe and happy. As they grow, I will let them know how much I appreciate every visit to his apartment, every gift they thoughtfully choose for him, every comment they make about his care and comfort. Perhaps my appreciation – one of the most powerful forces between people – will be enough.

The plan my parents and I have created for him will ensure that Nathan will always have food, clothing and shelter. He will never be homeless or hungry. But we want so much more for him. The limitations of purely legal solutions frustrate me. Only a combination of legal solutions and creative non-legal approaches can ensure that he always has food and never has a family of none.

“The Social Security Administration has unveiled an online calculator that will project your Social Security benefits based on your actual work record. The agency has other online calculators and every year mails benefit estimates to adult workers. But this latest calculator goes further than these, allowing you to quickly run various scenarios based on earning projections and differing retirement ages. “I’m impressed. It’s a wonderful tool. It brings some clarity to one of the key sources of income for people in retirement,” says Stuart Ritter, a T. Rowe Price Associates financial planner who tried the calculator yesterday. “Knowing more about your Social Security benefits will help you plan better for what you need to be saving.” Find the Retirement Estimator on the agency’s home page at www.ssa.gov.”

Source: NAELA e-bulletin and Baltimore Sun. For the full story go to: http://www.baltimoresun.com/business/investing/bal-bz.ym.ambrose22jul22,0,4246352.column
To go to the calculator: http://ssa.gov/estimator/

The Conejo Recreation & Park District has released its Therapeutic Recreation catalog for Fall 2008. It includes pages of activities including trips to sporting events, swimming lessons, bowling outings and dances. For a copy of the catalog or for registration, call (805) 381-2735. To volunteer, call (805) 381-2739 and ask for Sarah.

While involved in a chain-reaction freeway accident, a vehicle lost control, vaulted over the center median barrier, and landed on top of plaintiff’s vehicle, resulting in traumatic brain injury.

Verdict: $22,566,373

But there were other verdicts this month too. Here’s one:

Spilled coffee caused a driver to swerve across the centerline and collide head-on with a car that then rolled over, leaving the 48-year old driver with devastating injuries.

Verdict: $16,789,835

Source: California Bar Journal

Creating an estate plan is a very personal matter, and is usually done privately, with your attorney and with your partner, if you have one. However, there are some circumstances under which estate planning should be a family affair-perhaps even a multigenerational one.

Sean Condon writes about when it might be appropriate to include the whole family in the estate planning process in his article Estate Planning Can Be A Multigenerational Matter. Condon’s article mentions specific situations in which families would want to consider planning as a whole unit, including the following:

Planning for succession within a family business.

When multiple generations of families own property together.

If the family is responsible for significant debt.

If a family has a history of supporting certain charitable foundations and desires to continue doing so.

To provide for family members who live out of the country.

To make provisions for a non-traditional family situation, such as unmarried partners.

In many situations, you won’t have to choose between an estate plan that is private and one for your extended family. There are many ways to create individual estate plans for each nuclear family while still respecting and arranging for matters that affect the extended family as a whole. Of course, the process is easier if each nuclear family is able to work with the same attorney, but it is certainly not necessary as long as each attorney and family is willing to communicate and act together.

If you aren’t sure if you should plan privately for your family or include your whole multigenerational unit in the process, give our office a call. We can help you look down the road ahead and create a plan of action that will make every member of your family feel secure.

One of the most powerful tools in the landlord’s asset protection kit is the Limited Liability Company. Unlike insurance, LLCs have no exclusions for mold or other types of liability.

Recently, Los Angeles County courts awarded another large mold verdict. Here’s the verdict as reported in the California Bar Journal:

“Water Damage

Verdict: $859,478

Water damage from a leaking bathtub forced a neighboring tenant from his unit during mold and asbestos remediation…”

“Animals have these advantages over man: they never hear the clock strike, they die without any idea of death, they have no theologians to instruct them, their last moments are not disturbed by unwelcome and unpleasant ceremonies, their funerals cost them nothing, and no one starts lawsuits over their wills.”

- Voltaire (1694-1778)

If your definition of family includes a beloved pet, keep reading. Maybe it’s your child’s canine playmate, a kitty companion to an elderly widow or the family’s proud horse. Regardless of the origin or relationship, your pet is a member of your family and dependent on your for all its needs. If anything were to happen to you, can you be assured that your pet would be well-cared for?

Many families are asking me this question. When they create an estate plan to provide for their loved ones, they ask what they can do to provide for their animal dependents as well. Who will care for the animal(s)? Will your pets visit you if you are incapacitated?

Like estate planning in general, the options when it comes to planning for your pet are many and varied. You may create a simple letter of instructions nominating caretakers or a more solid Pet Trust to provide financial support.

However you choose to put the pieces together, the most important component in providing for your pet is choosing a trustee and caretaker who understand and respect your wishes. Having people you trust in those roles are your best insurance.

Pets don’t have the same rights as people. This means it’s essential that you, the owner, anticipate their needs and provide for them in case of your incapacity or death. No one else will. You pets cannot advocate for themselves. The nomination of a caretaker and a Pet Trust to provide financial support and a clear expression of your wishes is the best insurance you can give your pet.

“There is something going on now in Mexico that I happen to think is cruelty to animals. What I’m talking about, of course, is cat juggling.”

- Steve Martin