• • Are the declarations concerning client’s family current? Any additions to/subtractions from the family? Any name changes: did someone get married or divorced? Any need to take precautions because of a potential contest?
• • Have you moved in from another state or do you plan to move to another state?
• • Have any of your assets changed character (community vs. separate) due to marriage, divorce, gift or inheritance? Have you acquired an interest in a business or investments that may not be covered in your list of fiduciary authority? Have you refinanced your home where the lender required that you take title out of your trust for that transaction, but you haven’t put the trust back on title as the owner?
• • Are your retirement plan, life insurance, or annuity plan beneficiary designations up to date? Have you acquired any joint interests that should be re-titled as assets of your trust? Are any joint ownership and/or beneficiary designated assets consistent you’re your estate plan?
• • Are there any changes to your arrangements for management of personal and financial affairs on incapacity, such as durable powers of attorney, nominations of conservator, health care directive? Is your advance health care directive a bit dated? Does your POA agent have sufficient authority to prepare, sign and file your income tax returns?

• • Are any new beneficiaries who are minors? How will the minor’s gift be handled before they become an adult?
• • Are your intentions for any of your specific gifts changed; especially, do you still own the item you intend to give?
• • Is a special needs trust appropriate for a beneficiary who is now or will be disabled, such as a developmentally disabled child, or a medically disabled adult or elder?
• • If you have made lists, put tags on furniture, etc., are those informal directions current?
• • Have there been any family gifts made that affect the recipient’s legacy in your trust or under your will?
• • Are your charitable gifts still correct? Things such as the entity’s ability to receive charitable gifts, changed or released conditions on the gift, etc.

• • Are the persons you have named in your trust, will, power of attorney, advance health care directive, etc. still your current choice in order of preference?

Medi-Cal is California’s version of the federal Medicaid program that is jointly funded by federal and state governments. It offers free no or low-cost medical assistance for low-income or low resource individuals.
Benefits after age 55: Most elder clients are aware of Medi-Cal benefits, particularly in the context of paying for a stay in a nursing home or skilled care facility. It has been required for the past 20 or so years that the state may seek recovery of the benefits paid to individuals when they were 55 or older and/or those recipients of nursing home benefits. Recovery occurs after the recipient dies by means of an estate recovery claim from the Department of Health Care Services.

Recovery has been a significant threat to family wealth, whether small or large, causing individuals to incur the expense of more sophisticated estate planning to avoid a DHS claim for recovery against the recipient’s estate, to the extent possible. Often, families have already invested in estate planning, especially using living trusts, which needs to be altered drastically or eliminated to preserve as much as possible for the next generation.

The benefit recipient’s executor or administrator is required to notify DHS of the beneficiary’s death, then deal with any claim the DHS may present for recoupment. So, you can’t just ignore the claim; you must plan to avoid it or minimize its financial impact on the estate.

New Legislation: All of this changed as of January 1, 2017 as a result of two Senate Bills enacted this year that have reformed the Medicaid recovery scheme nationwide. This new legislation:

• ïProhibits claims on the estates of surviving spouses and registered domestic partners;

• Limits recovery for those 55 years of age or older to nursing home and home and community based services;

• Limits recovery to only those assets subject to California probate;

• Restricts the amount of interest that the state can charge on liens;

• Requires the state to waive the claim as a substantial hardship when the estate subject to recovery is a homestead of modest value, i.e., a home whose fair market value is 50 percent or less of the average price of homes in the county where the homestead is located; and

• Requires the state to provide a current or former beneficiary or their authorized representative a copy of the amount of Medi-Cal expenses that may be recoverable.

• Nursing home care

• Intermediate care for developmentally disabled (ICF/DD)

• Home and Community Based Services, including Assisted Living Waiver, Multipurpose Senior Services Program, Waiver Personal Care Services provided under California’s In Home Operations, and Nursing Facility/Acute Hospital waiver programs; and

• Related hospital and prescription drug services provided to an individual while receiving nursing facility services or home and community based services.

This is a critical question in the context of today’s estate tax exclusion. If your estate plan (trust or wills) was created more than 10 years ago with the goal of minimizing or eliminating federal estate taxation of your family assets, you should dig it up and have it reviewed.
I am using the term A-B estate plan generally. Some plans provide for additional trusts. There are many variations because clever minds have had years to find ways to dodge estate tax. However, the basic strategy explained below is at the core of these plans.
Look at your trust (or will) to see what is to happen when the first spouse dies. If the trust says to split the trust assets into two or more separate trusts (called “subtrusts”), one of which cannot be amended or revoked by the surviving spouse, then read on.
Discussion
Quickly: An A-B estate plan is one where your family assets are to be divided on the first spouse’s death into two trusts. One trust will be irrevocable (“Trust A”) and limit the surviving spouse’s access to substantially one half of the family assets. The other (“Trust B”) will remain under the survivor’s control.
The purpose of the irrevocable trust is to keep its assets out of the surviving spouse’s taxable estate following her/his death. To achieve this, the plan makes use of the estate tax exemption allowed to every decedent: that is the amount of assets that would not be taxable with or without a plan. That amount is determined by the amount of the decedent’s exemption available at the time of death. (If you Google “history of estate tax exclusion” you will find a list of these exemption amounts by year.)
While the irrevocable Trust A shields its assets from estate taxation, it does so at a price.

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