June 17

Third Party Special Needs Trust

A Third Party Special Needs Trust serves primarily to protect the use of government benefits for disabled or mentally ill beneficiaries. Because government programs usually have eligibility requirements, an inheritance could disqualify the disabled beneficiary from receiving future benefits such as Medi-cal or Supplemental Security Income (SSI).

Although all Special Needs Trust are designed to protect disabled beneficiaries, there are differences between them. A First Party Special Needs Trust for example, is only offered to beneficiaries under the age of 65. In addition, they contain a payback clause, meaning that the beneficiary’s estate must pay back to the state any monies left over once the beneficiary dies.

Third Party Special Needs Trusts on the other hand, do not contain age restrictions, nor do they require the beneficiary’s estate to pay back any money to the state. As a rule, these Trusts are usually drafted by parents of special needs or disabled children.

Here is a scenario. You have a special needs or disabled child. You worry that for whatever reason, they are unable to make proper monetary decisions. You want to provide for them when you are gone, and to protect or improve their standard of life.

To do this, you utilize your Will or Trust, and have drafted on their behalf, a Third Party Special Needs Trust. Why? Because the surviving child doesn’t have control over the Trust, meaning that the child is unable to revoke the Trust, or to use the assets contained in the Trust for any purpose other than what you intended. Another way of looking at it – is that the child cannot just take the money, which by doing so, would cost them their government benefits.

In addition, the Third Party Special Needs Trust is good for the life of the beneficiary, and if drafted to do so, allows the beneficiary to receive gifts, i.e., a home, handicapped vehicle, funds to be used towards paying utility, repair, and therapy costs (or other such costs not covered by Medi-cal).

The Third Party Special Needs Trust exists to protect those most in need of protection. At the same time, this Trust isn’t good for everyone. If interested in having this or any Trust drafted, always begin by speaking to a qualified estate planning attorney.

June 2

Funding the Smithsonian

The Smithsonian Institution is the largest museum and research complex in the world. It houses a total of nineteen museums and nine research centers. In addition, the Smithsonian Institution works directly with an additional one hundred forty museums around the world.

It is a larger than life Institution with one foot firmly planted in scientific pursuit and advancement, and the other planted in science fiction. Yet, prior to government involvement and legislation, the Smithsonian was merely one man’s beneficiary – as recorded in his Will.

British scientist, James Smithson drew up a Will in 1826, naming his nephew as beneficiary. He added that should the nephew die without heirs, the estate should go to “the United States of America, to fund at Washington, under the name of the Smithsonian Institution, an establishment for the increase and diffusion of knowledge among men.”

Smithson himself died in 1829. His nephew followed without heir in 1835. In 1836, President Andrew Jackson announced the bequest to Congress. Smithson generously donated more than $500,000.

A lot has changed since 1836. The expansion and growth of the Smithsonian is in no small part due to moneys collected as: gifts, grants, trust endowments, funds appropriated by Congress, and revenue created by the Smithsonian Institution itself.

Yet, “the nation’s attic” as it has been affectionately nicknamed, which houses both the Hope Diamond and the Ruby Slippers; and draws an estimated thirty million visitors per year, would not exist if not for the generosity of one man and his very well drafted Will.

May 21


Probate is the legal process which occurs after a person dies. Its purpose is to prove in court the validity of a deceased person’s Will. It also serves to inventory the deceased’s property and pocessions, have property appraised, pay debts and taxes, and to distribute the remaining property to beneficiaries as the Will instructs.
Assuming the deceased’s Will is up to date and properly drafted, the probate process should be fairly quick and painless. If there isn’t a Will however, or if the Will is somehow insufficient, then the process can become long and stressful.
If you do find yourself as a beneficiary to an unprotected estate, void of a Will, or where the Will is contested, rest assured that you are not without options. Most estate planning attorneys also handle probate proceedings.
Regrettably, people often choose to face their own mortality without the benefit of a Will. There are many reasons for this, but the biggest may be the worry over the expense involved. It isn’t hard to imagine that our heirs are equally concerned about consulting attorneys for the same reason.
Not long ago, we met with a client whose mom had passed, leaving her as the sole heir to mom’s estate. Mom did not have a Will, but she did have a valuable home which she intended her daughter to inherit. Being the sole heir, the daughter decided to represent herself in probate court. She showed up to court as instructed, filled out the necessary paper work, and followed procedure. What resulted were rejection notices and requests for resubmissions. The process left her fed up and frustrated.
She came to see us nine months later. During her consultation, she made it clear that money was an issue. She expressed concern and worry while sharing information in our conference room. She knew that she needed help from an expert but she didn’t think she could afford it.
What the client didn’t know, and what most people don’t know, is that good estate planning/probate attorneys are paid from the estate property. In our case, the attorney’s fees were paid from the proceeds after the house sold.
People don’t always understand that probate is just a legal process. It can be excruciating or it can be relatively painless. It all depends on how the person prepares. A properly drafted estate plan, including a Will and Trust is always the best path. Nevertheless, if a beneficiary doesn’t have the benefit of these documents, they still have an alternative path in hiring a probate attorney. The probate attorney can handle paper work, the appraisal process, follow up, and other various duties, all without billing a penny until the probate is final.

April 24

Three Types of Wills

A Will is a terrific device whose purpose is to protect the wishes and property of an individual, long after an individual can no longer do so for them self. That said, not all Wills are created equally. Most people living in California are unaware that there are three kinds of Wills that our state recognizes: Holographic Wills, Statutory Wills, and Attorney Drafted Wills. This article will describe in detail these three types of Wills.

The Holographic Will is rarely used except in cases of emergency, due to the ease in which it can be contested. A Holographic Will does not have to be notarized or witnessed. The Will must be entirely in the author’s handwriting. The document must be legibly handwritten. In addition, if the author types anything into the Holographic Will, it may cancel the entire Will. The intention of the Will must be clear. There can be no question of what the author is leaving and who will receive it. In two words, this kind of Will is “high maintenance”. But, if you find yourself in dire circumstance with no time to spare, and no attorney to consult, it could arguably be better than not having a Will at all.

Statutory Wills are prewritten Wills created by the state legislature, and written into state law; meaning that you have to use the Will exactly as they are drafted and without amendment. If you are a state resident, you may use this Will at no cost by simply filling in the form. As a rule, their inflexibility, and inability to change the language or add clauses makes them a secondary choice. Yet, if you need a very simple, straightforward Will, then a Statutory Will might suit you.

The Will that most people are familiar with, is a will drafted by an Estate Planning Attorney. A “drafted” Will is created to suit individual needs. A properly drafted Will meets California legal standards while allowing for the addition of provisions to fit individual needs. For example, if a person wants to exclude a family member from receiving benefits, name a guardian to raise children in the event of death, establish and fund a Trust for surviving family, choose between burial and cremation, or name their own Executor as opposed to having one appointed by the state, they can. The freedom provided by this kind of Will makes it easy to see why “drafted” Wills are the most popular.

Whether it is drafted or prewritten, make certain you choose a Will that is right for you. When planning a Will, consult with an Estate Planning Attorney. An Estate Planning Attorney will be able to answer any questions and ensure the Will meets your goals. In addition, most attorneys provide a free consultation. A good attorney will use that time to bestow their knowledge and explain all options with clarity.

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