Santa Clarita Attorneys - Jane McNamara

WHAT EVERY ADULT CHILD SHOULD KNOW

By Jane M. McNamara, Elder Law Attorney

As an elder law attorney, I see the effects of stroke, Alzheimer’s, Parkinson’s, and other catastrophic illnesses daily. I often meet with the spouse of the ill person, or the adult children. There are usually tears and raw emotion as we explore the options available. I also frequently meet with adult children who must handle the final affairs of their deceased parent. I have seen many adult children underestimate the job, and make costly mistakes involving deeds, taxes, and other issues. I have seen adult children embroiled in bitter feuds and litigation, focusing on their sibling’s improper handling of the parent’s estate. If you are an adult child, here are a few of the basic things you should know before that life-changing event occurs in your family:

Advance Health Care Directives are a “must.” Due to recent changes in the law, the document should have been created after 2001, and include “HIPAA” release language, which allows the Agent to obtain private medical records.
Is there a comprehensive Durable Power of Attorney document? A well-written and complete power of attorney is critical, and should contain language regarding Medi-Cal planning, long-term care, and asset protection.
Is there a Trust? A Trust is a contract and the language must be followed. If the parent is incapacitated, what does the contract provide about the legal power provided to the successor trustee? The successor trustee should be permitted to legally manage the affairs for the incapacitated family member.
If there is a Trust, are the assets properly “funded?” Is the deed titled correctly? If not, expect a probate proceeding. Are the brokerage accounts and bank accounts titled in the trust? Are the beneficiary designations correct on the IRA’s, 401(k) plans, life insurance, and annuities?
Remember, Medicare only pays for a maximum of 100 days in a skilled nursing facility. There is a co-pay after day 20. Skilled nursing facilities average from $4000.00 per month to $16,000.00 per month for more advanced care. Most families are caught unprepared for this financial burden when a parent or spouse is suddenly the victim of a stroke or other catastrophic event. Hopefully, the parent executed a proper durable power of attorney with complete powers for Medi-Cal and public benefit planning.
Are there strained family relationships, estranged adult children or blended family issues? If so, many other legal issues may arise.
If there is a death, do you know what your legal duties are as trustee? Trustees often begin immediately collecting and distributing assets. By doing this, the trustee may invite problems with the IRS, increase property taxes on the family residence, or face a lawsuit for the improper handling of the trust estate. No matter how small the estate is, it must be administered properly.

Now that the holidays are here, it may be a good time to talk with your loved ones about these critical issues.