If you have a loved one who suffers from mental illness, you may wonder how you can continue to provide loving support even after you have passed away. Your estate planning can help. Here are three ways to use estate planning to provide ongoing support for a mentally ill family member.
#1 Appoint the Right Trustee
If you want to leave funds to your family member but want to be sure they are used properly, selecting the right trustee is a must. This honest and caring individual can help to dispense the right funds at the right time and for the right reasons.
#2 A Trust That Covers Treatment
You can set up your trust to cover the expenses of any voluntary treatment your loved one decides to undergo. This can help to ensure that he or she does not forgo needed treatment due to feeling like it is too big of an expense.
#3 Provide Structure
If your loved one deals with things like anxiety, depression, or hoarding tendencies, a large inheritance may feel like more of a burden than a blessing. A well-structured estate plan can remove the uncertainties by only allowing dispensations for particular expenses. This relieves the loved one of the pressure to avoid misusing the funds due to some type of compulsion.
Setting Up a Discretionary Trust in California
If you want to provide ongoing care for a mentally ill loved one using your estate planning, Petrov Law Firm can help. Our compassionate estate planning attorneys can help you to set up a discretionary trust, will offer advice for choosing the right trustee, and can help you legally execute all of your documentation so that your wishes are sure to be carried out. To learn more, call our San Diego office today at 619-344-0360.Read More
One of the easiest ways to distribute your smaller assets (like bank accounts) is to list your beneficiaries on the accounts as recipients upon your death. When you pass away the asset will then immediately transfer to the beneficiary without any need to pass through probate.
However, when you pass your assets over without specific instructions, you might find that your assets don’t get distributed as you want. For example, you could add each adult child as a beneficiary for the bank account. And you could verbally request that the money in your bank accounts gets distributed equally among your children. Unfortunately, one of them could withdraw the full amount without consent from the other account holders.
Just a few thousands dollars could then cause a rift in your family. Work with an estate planner to clearly state your intentions in your will and create the legal mechanisms to ensure your assets are distributed accordingly. Money can have a polarizing effect within the closest of families. And while you might assume you know the financial circumstances of each of your children, chances are there are details about their personal finances they won’t share with you. Even the most seemingly responsible adult might have financial concerns that could override their loyalty to your express wishes.
Never make any assumptions when it comes to asset distribution. The passing of a loved one is a stressful time for a family. If there are any vaguaries regarding your assets, the stress of your death could translate into long-standing grudges over financial matters.Read More
Creating a charitable trust as part of your estate planning process serves several important purposes. Work with your estate planner to determine the best kind of trust and how to properly funnel money into it.
While you are still alive, the IRS lets you donate up to 50% of your income to the charity of your choosing. If you’d like to donate your money but still keep control over its use, you can create a charitable trust and donate to it. Once the trust is established, you can elect the ways in which you’d like to see your money go to use.
The most valuable way to create a charitable trust, however, would be to continuously invest the donated funds until the trust can be self-sustaining. Not only do you create a reliable stream of funds for the causes that concern you most, but you demonstrate to the future generations of your family how money can create sustainable good.
Once you pass, the trust can start to donate excess funds to the causes that meet your criteria. Over time, you can allow the trust to adapt its scope, creating an avenue by which the trust can expand its purpose to meet future needs.Read More
Not all families get along, and the promise of an influx of inherited money can fuel the flames of anger, resentment, and greed. If you have a family member who is likely to battle over life’s little details, you might need to contact a lawyer to ensure your will (or a loved one’s will) can be easily defended, if contested.
If the will is more than three or four years old, visit a lawyer and give it an update. Even if there are no changes, document the review of the will. If the will ends up being reviewed by a judge, you will have the favor of the legal system if the will was recently reviewed for fairness and accuracy.
If you (or your loved-one) has started to see a decrease in mental ability, contact a lawyer to confirm your current mental status as sufficiently sound and validate the contents of the will. Decreased mental capacity is a strong basis for contesting a will. However, if you can confirm the text of the will while still with a generally sound mind, the will won’t be vulnerable to being contested.
If the will assigns a substantial percentage to one child over another; or if it assigns a significant amount of money to an organization, visit a lawyer and confirm the details. Again, anything that stands out as unusual could be grounds for contestation.
The more documentation around the creation of will, the better. Witnesses, doctor’s notes, and the help of a good estate planner will ensure that your wishes are carried out exactly as you want.Read More
When you and your lawyer write your will, you write it assuming the named beneficiaries will be alive when you pass away. However, sometimes beneficiaries pass away early. And not everyone updates his or her will to keep up to date with those kinds of unfortunate and significant changes
If you don’t change your will and one of your named beneficiaries has already passed away, then the probate court will award your assets to the beneficiary’s natural successors. For example, if you name your sister as the beneficiary of your house, but she has already passed away, then your sister’s spouse and children will step in as the beneficiaries. If you have a family member you specifically, don’t want to gain from your assets, then you will have to work with your estate planner to word the document in exact and specific ways.
Several kinds of investment accounts, banking accounts, and life insurance rewards have built-in requests and/or requirements that force you name both a primary and secondary beneficiary. These documents will often take precedence over your will. Be sure to review these documents alongside your other estate planning documents to ensure there are no conflicts.Read More
When someone is unable to care for himself due to physical or mental disability, a court can grant a conservator to be responsible for physical care or finances. Generally, the court prefers that a spouse or family member be named as conservator, however, if no one is available, the state becomes guardian.
Often when an older adult is diagnosed with a progressive physical or mental problem, the patient and his or her family decide on who is best to serve as the eventual conservator. An estate attorney can help draw up the necessary documents so that when the time comes to grant the conservatorship, the process is easy.
There are several options for a conservatorships, however the need for care can be divided between physical and financial challenges. For physical care, the patient and the family seek a conservatorship of the person. For financial care, the judge would grant a conservatorship of the estate.
The process for having a judge approve a conservatorship can take a significant amount of time. Generally, the family has to petition the court, undergo an investigation, and stand in front of a judge. If you or a family member is suffering from deteriorating physical or mental health, start now to ensure the conservatorship process is completed ahead of need.Read More
Because there are several types of trusts, such as revocable and irrevocable, there is no single answer as to how you can change the trustee of a trust. The trustee is the person in charge of the money. He or she must follow the instruction in the trust and distribute the money according to those instructions. Trusts are generally intended to help families avoid complex probate problems, probate fees, and taxation.
Revocable, living trusts are generally the easiest to adjust. In fact, the grantor, the trustee, and the beneficiary are often the same person. In addition, with these trusts, it is fairly easy to execute a power of attorney to add another trustee to the trust. However, a lawyer will have to draft any changes to the trust to ensure the changes are legal and appropriate.
Irrevocable trusts are more difficult to adjust. If the trustee is alive, he or she must give consent over the change. If the trustee has passed away, then the beneficiaries must agree on a new trustee and amend the original trust.
Changing the trustee of a trust is not an easy task. Generally, you will need to hire a lawyer to ensure that the intent of the original trust remains intact. If there are several beneficiaries trying to access the same assets, a lawyer becomes a necessity.Read More
While you are alive, Medicaid can’t recover their costs for long-term care by placing a lien on your home. However, the federal government has a policy that requires that all states try to recover some of those costs out a deceased person’s estate. This means that your home can be taken by the government after you pass away.
However, a good estate attorney can create a trust that will protect your home from a lien placed on your home to recoup some of those long-term care costs. If the home is owned by a trust that is only for the benefit of your children, then the state can’t easily put a lien on the home.
Because there are several types of trusts, speak to an estate planner to determine which kind of trust (or suite of trusts) will best serve your financial needs. Even the most simple of estates can be streamlined to protect your assets from probate fees and recovery liens.Read More
Both revocable and irrevocable trusts can protect your house (or other assets) from creditors including the IRS, but neither provides total protection. Consult with an estate planner to create a trust to protect your current assets for your future beneficiaries. Use your trust to protect your assets from medical debt and other end-of-life expenses.
Because assets can move in and out of a revocable trust, they offer less protection against creditors. However, if you appoint someone other than yourself as the trustee, you legally lose control over the trust making it more difficult for anyone to place a lien against the assets in the trust.
Irrevocable trust offer more protection, however, they also are more difficult to create and maintain. Irrevocable trusts operate as independent entities, responsible for filing tax returns annually, just like a living person.
While irrevocable trusts offer more protection, your estate planner can probably use a revocable trust to protect your assets without the challenges that come with irrevocable trusts.Read More
You may already know that setting up a trust can be an investment tool to help you save money, protect your assets, and ensure the easy transfer to your heirs. While trusts can avoid estate taxes and provide for you and your family in the case of your incapacitation, there are a few lesser-known ways to take advantage of a trust.
- Protect your assets from creditors and settlements. When you move assets into a trust, legally they don’t belong to you anymore and they will fall outside of the assets a court could force you to forfeit in the event of a judgement. While this is particularly helpful for business owners (even those with an incorporated business), protecting your assets can become a priority with a car crash or slip and fall in your home.
- Allow professional investors to be aggressive with your money. If you allow a group of professional investors access to a trust specifically for aggressive growth strategies, you might find they are generally more successful at managing your money. When the investors have to call you for every purchase, sale, and transfer, the investment process can be slow and difficult. Set up a trust and let the investors have their way. It might just pay off.
- Shift your incoming producing assets to members of your family in a lower tax bracket. If you have a spouse or children producing less money than you, you can move your assets into a trust and put the tax burden in their names. And yes, you can still maintain control of the assets.
None of these options with a trust is simple or easy. These creative uses of trusts require a few long hours with a good attorney to help you understand what you are getting — and what you are giving up.Read More