Reviewing an old estate plan

Posted by & filed under blog, Estate planning.


Having an older Trust or Estate Plan is not, technically, a problem. The age of  the Trust is insignificant. However, whenever I see one that is a few years – or decades –  old, I almost always see changes that affect the final plans the person had originally intended.

Recent tax law changes also allow me to make many older trusts simpler and easier to use.  If you have a trust older than 2010 than has not been reviewed since, now is a good time for a check-up.
Here are 5 things to consider about your older Trust or Estate Plan:


  1. Are your Asset Schedules up to date? Any Estate Plan or Trust that is more than a few years old almost always has an out-of-date Asset Schedule. Did you buy or sell real estate?  Receive an inheritance? Cash out or purchase stocks or other investments? Life Insurance? Retirement accounts?  This is an easy fix you can do yourself! Wills, trusts and estate plans


  1. Do you still know, like and trust the people you have appointed to be in charge of your estate? Is your ex-spouse still listed as your Trustee or Executor? Are your trustees still alive and able to act?  Are your children now capable adults able to replace other people you may have appointed? These are usually excellent reasons to update your Trust!


  1. Do you still like your beneficiaries? Things change, people change, relationships change. Make sure the people you’ve listed as your beneficiaries are still on your good side. Do you still want to leave your family’s Lake Tahoe home to your EX-spouse?   Or your grandmother’s jewelry to your drug-addicted daughter? Are you sure you still want to leave your record collection to your bestie-turned-enemy? Take some time to review your relationships and make sure your original wishes still make sense for your current situation.


  1. Are there dead people included in your will or living people left out? Just like in numbers two and three above – take a moment to review who in your Trust or Estate Plan is no longer with us – and who you may want to add (grandchildren, adopted children, new friends, in-laws, etc.).

Reviewing an old estate plan

  1. Do you have an “AB” trust? Let me be clear here: STAY AWAY FROM “AB” TRUSTS without a property analysis.  While “AB” Trusts used to be standard, because of changes in the estate tax laws, they are no longer relevant for most families.  If your trust was created by someone who is not an attorney (document preparers, paralegals, online legal services, etc.) double check your trust. Most non-attorneys use “AB” trusts because it’s the only Trust they know how to do. Having an “AB” Trust can often be much worse than a simple trust under current laws.  AB trusts are now primarily used for blended families, so that after your spouse dies you can’t disinherit his kids!  If you have an AB trust, have an attorney look at it immediately!

You want to make sure that the plan you intended is properly carried out upon your death- that’s the whole purpose of an Estate Plan, after all!  Therefore, it’s critical that you have the best possible trustees or executors, that you name the right beneficiaries, and that you have the right kind of living trust.


I urge you to take out your Will or Trust right now and check it for these 5 things. If you need help please feel free to give us a call at 925-757-4605 or contact us by email.  I’d be happy to review your estate plan with you.

Posted by & filed under blog, Estate planning.


There are three certainties in life: death, taxes and someone who can’t wait until you die. Inheritance refers to giving property to an individual upon your death. To disinherit means refusing to leave your property to a would-be heir. For most people, the term “disinherit” is a dirty, cruel word. For you, it may not be a dirty world, but a way to express your final wishes.


Reasons to Disinherit
The reasons to disinherit a family member are extremely personal and range from emotional to business decisions. Some common reasons people disinherit include:

1. Estrangemedisinheriting a childnt between you and a family member
2. Protecting the interest of your birth children over your stepchildren
3. Allocating money and assets to a deserving family member
4. The family member received your money and assets while you are alive
5. You believe your relative only wants your money


Disinheritance Factors to Consider
The threat of disinheriting a spouse or child seems powerful (especially when you see the dramatization portrayed on a television and movie). However, disinheriting immediate family members isn’t always as easy as a subplot in a movie or television series. If you are thinking about disinheriting a child or spouse from your will, you have to do more than just leave their name from the document.


In California, you can’t disinherit a spouse unless:
• You clearly and intentionally explain your decision in your will
• You include evidence that you left property and assets to your spouse outside your will or trust. This evidence must be included in the will.
• Your spouse waived rights to inherit from you in a valid, signed agreement such as a pre-nuptial agreement.disinheriting a spouse


In California, you are permitted to disinherit your children or any other family members from your will as long as your wishes are clearly stated. 


The most efficient way to handle disinheriting someone is to leave a small amount of money to the disinherited relative and include a no contest clause to prevent them from challenging the will.


If you’re struggling with this difficult decision, contact the Law Offices of Joel A. Harris, we can help you make the right decision for you – and your family. You’ve worked too hard to leave your family’s future to chance.


Posted by & filed under blog.


Has the time come to consider moving to a board & care facility or even a skilled nursing home? Has your parent or loved one gotten to the point where they can’t take care of themselves and a nursing home is the only option? Whether considering the move for yourself or a loved one, there is a lot to consider when figuring out how to pay for it. should you sell home to pay for nursing home


Most people first try to pay for their nursing home care out of pocket or by applying for Medi-Cal (California’s Medicaid program). But what if the elder has a home? How does that factor into the equation? There is a lot of confusing and misleading information on the internet about this huge decision, so I wanted to give you a simple guide to help you make the right choice.


Here are the four most important things to consider when deciding whether you should sell your home to pay for the nursing home:


1. Your house may be protected from Medi-Cal, your cash won’t be. Owning a home doesn’t automatically disqualify you for Medi-Cal benefits for nursing home costs. However, the State Department of Health Services will file a claim against your estate after you die to recoup the Medi-Cal nursing home benefits paid. With careful planning there are ways to avoid this lien. Some states have implemented the Deficit Reduction Act of 2005, disqualifying the home as an asset for Medicaid eligibility if your equity exceeds the allowed limit. However, while your home may be protected, any cash you gain from the sale of your home won’t be – you will have to “spend down” to the allowable limits ($2,000 for a single person in California) before the state will help pay for your nursing home care. Note: Medi-Cal only pays for nursing homes, not board & care facilities.


sell home to pay for nursing home

2. There could be avoidable taxes. The financial benefit of selling your home while you’re alive could actually be diminished because of capital gains. When you sell a home while you’re alive, the capital gains tax is on the difference between your original purchase price and current market value (less an applicable homeowner’s exemptions). That means if you’ve owned the home for 30 years, you could owe a huge chunk in capital gains taxes. However, leaving the house to your heirs, they are only on the hook for the difference between the market value when they sell and when they inherited it. This could be a huge tax break for your heirs.


3. Borrowing could be your best bet. Home equity loans and reverse mortgages can be practical solutions to pay for long term care expenses. It’s best to speak with your financial advisor or tax professional about these options.


4. Consider in-home care. Receiving care in your own home could be less expensive than living in a nursing facility and will be a much better experience for most elders. Medi-Cal may cover some in-home care expenses for seniors eligible for “In Home Support Services”.


If you have a good long term care insurance policy, you will not have to worry about these issues! Most policies now include in-home care coverage.

Deciding to move yourself or a parent to a nursing home is a huge decision and figuring out how to pay for it can be overwhelming. To fully understand all your options and what your financial and tax implications are before making the wrong move, contact an Estate Planning Attorney. We would be happy to schedule a consultation and answer all of your questions.