What Is a Special Needs Trust?

A special needs trust is a way to provide support for a person who is physically disabled, mentally disabled, or chronically ill without reducing their eligibility for public assistance, such as Social Security, Medicare, or Medicaid. Special needs trusts are irrevocable. Two options are available: first-party and third-party special needs trusts (SNT). The simple distinction between a first-party SNT and a third-party SNT is that the first party is funded by assets that belong to the beneficiary and the third party is not.

A special needs trust can be set up as part of your estate plan to go into effect on your death or can be effective immediately to help the beneficiary now.

In California, first-party SNTs must include federal and state provisions and are repaid to the state when the beneficiary dies. The Department of Healthcare Services legally must recover up to an equal amount of the total medical assistance paid through Medi-Cal following termination of the trust. This is not true of third-party special needs trusts. Proper estate planning is critical to give the third-party option.

What Is a Child’s Trust

A child’s trust is created specifically for children and is managed by a trustee until the children have reached financial maturity. These are set up as an integral part of an estate plan to leave funds for children once they achieve a milestone, such as a specific age (usually 25 or older) or college graduation. A child’s trust is also referred to as a children’s trust or a minor’s trust. These trusts avoid probate, guardianships, and possibly taxes as well. They typically provide for the child’s care, support, maintenance and education until the age(s) you designate. As part of your estate plan, you can create both a special needs trust and a child’s trust to protect your special needs children. How you choose to allocate funds to each trust will depend on the age of your children and the severity of their disability.

Review Your Special Needs Trust Regularly

The best estate plans are reviewed regularly. Situations change, relationships begin and end, and children get older. To ensure that your children are properly cared for should you pass away before they are grown, you should be developing a comprehensive plan that you review regularly. If you are the parent of an older or adult child with special needs, you can create a special needs trust for them now, as part of your estate plan, to maintain them throughout their lives.

The Estate Planning Support Your Family Needs

Haven’t built your estate plan yet? We’re here to help! For more than 30 years, Joel A. Harris has been protecting the estates of families throughout California. If you want some help navigating the ins and outs of protecting your estate or establishing a trust to protect your future, feel free to visit us online, in person, or call us by phone at (925) 757-4605.

Does Your Trust Update Require an Amendment or Restatement?

If you have a revocable living trust, you may need to update it from time to time. In the process of your trust update, you may wonder if you need to amend it or if it needs to be completely restated. The answer to that question depends on what your goal is with the update.

Why a Trust Update Is Needed

A living trust can be changed at any time and for any reason. That’s the benefit of creating a revocable trust. There are several reasons you might need to amend or restate your trust, and they are usually centered around life events. These might include:
  • Death
  • Birth
  • Marriage
  • Divorce
  • Retirement
  • Changing beneficiaries
  • Adding or removing assets
  • Relocating to a new state
In addition, it’s smart practice to review your trust regularly to ensure that it continues to support your wishes. What you desire at 60 can be very different from what the 40-year-old version of you would have wanted.

When an Amendment Is the Best Bet

If your trust update only requires minor changes, an amendment is the correct choice. These minor adjustments can include changing assets or trustees. A trust amendment changes one or more provisions of a revocable trust without revoking it entirely.
Implementing numerous amendments over the years can make the trust confusing, requiring your trustee to go through additional documents to makes sense of multiple amendments. If it comes to that, it might be time to rework your trust to be clearer. That’s when a restatement is in order.

When a Trust Update Requires a Restatement

If you have multiple changes to make to your trust, a restatement could be the better option. Updates that fall into this category include removing a beneficiary or changing your asset distribution. Restating the trust means that you and your estate planning attorney will create a new document that states that the trust has not been revoked but is being restated (replaced by a new trust with the same name). Because your trust update is a restatement, you won’t have to move property out of it and then back into it (which you would have to do if you revoked the original trust).
In many instances, a restatement is preferable to an amendment because the restated trust supersedes any previous trusts and amendments. If, for instance, you removed a beneficiary, they would never know because they would not be listed in the amended trust, which will avoid any potential issues or hurt feelings.
Another reason to restate the trust is to take advantage of changes to the law.  For example, the popular “AB” trust format of the 1990’s was made almost completely obsolete by 2012 estate tax law changes, therefore almost all “AB” trusts should be restated.
Speak with your estate planning attorney if you have an older trust and need to make these adjustments.

Is It Time for a Trust Update?

For more than 30 years, Joel A. Harris has been protecting the estates of families throughout California. If you want help navigating the ins and outs of protecting your estate by establishing or updating a trust to protect your future, visit us online, in person, or call (925) 757-4605.

Uniform Trust Decanting Act – What Is It And How You Can Benefit

Decanting a fancy bottle of wine may be familiar to most people, but there is a new type of decanting: trust decanting. The Uniform Trust Decanting Act was enacted in California on September 14th. Trust decanting is a method in which a trustee may distribute trust assets from an old irrevocable trust into a new one, or amend an existing irrevocable trust, without court approval. It has its limitations; only certain trusts can be decanted. You can’t decant a trust established for charities, for example. In this article I will explain what you need to know about the Uniform Trust Decanting Act and how you can take advantage of it to protect your assets.

1. Who Is Involved?

Before exercising decanting power, the trustee must give notice to very specific people who will be involved in the process. These people include the settlor, beneficiaries, trustees of the former trust, trustees of the new trust, and the attorney general in some instances. The act provides specific guidelines as to what the notice should include. A recent modification of this act entails stricter provisions than the original. If you are located in the San Francisco Bay Area, specifically in the cities surrounding Antioch, Concord or Walnut Creek, feel free to reach out to The Law Offices of Joel A. Harris to get more information on what to include.

2. What Is Allowed?

The Trustee of a trust may wish to update legal provisions, correct legal or drafting errors, take advantage of new tax laws, clarify ambiguities, and protect beneficiaries from changed circumstances, health conditions or creditors.

3. What Is Not Allowed?

Not following the regulations of trust decanting can lead to serious consequences. Decanting should not be abused as a way to defeat the settlor’s initial intent. The Uniform Trust Decanting Act prohibits decanting that defeats tax or charitable purposes of the settlor. The more initial control the trustee has over the distributions of the trust, the more freedom they have to modify the trust through decanting. There are provisions as to what can be modified by the trustee. Generally speaking, the most important provision to remember is that trustees cannot change the original beneficial provisions of the trust itself. For more information on what is or is not prohibited, contact The Law Offices of Joel A. Harris.

“The Uniform Trust Decanting Act prohibits decanting that defeats tax or charitable purposes of the settlor.”

4. Who Will Benefit?

Decanting is designed to extend the terms of a trust or make it more safe for those involved. Those who are new beneficiaries may benefit most. This is because they receive new assets that can be used to alleviate health, personal or educational expenses. Also, beneficiaries will likely get exactly what was planned when establishing the trust. The new provisions of the law allow for assets to be better protected. Finally, since the trustee is required to provide 60 days notice prior to the exercise of the decanting power, beneficiaries have time to object to any proposed changes. Our advice is to have all parties entitled to notice sign and approve any trust decanting.

Are You Worried about Your End of Life Plan?

If you are not prepared with a current estate plan then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create a plan that well suits your goals.

The Law Offices of Joel A Harris are located in the cities of Concord, Walnut Creek, and  Antioch, California.  We have worked for nearly 30 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.


4 Common Mistakes People Make AFTER Signing Their Living Trust

Every estate plan has unique features, but after preparing living trusts and wills for the nearly thirty years, we have seen the same problems and mistakes often reoccur. Each of these common mistakes is avoidable as long as you take the care to make sure you been address them correctly. From wills to trusts and beyond, protect your loved ones by avoiding these four costly and common estate-planning mistakes.

1. Neglecting to Update Your Estate Plan

Many people become passive in the presence of an estate planning attorney. They rely on the attorney to make sure everything in the plan is what they need and is done properly. Part of the estate planner’s job is to be sure you understand the basics of how the plan works, what you need to do to implement or maintain the plan, and how it works for you and your beneficiaries. It is not your job to know all the legal angles and why certain language is used.

Often people make decisions after a discussion with their estate attorney but then later on details become hazy. Insist that your attorney simply explain your documents. You may wish to take notes about key decisions and why you made them. Each time the law or your family changes, you need to make it a part of your check-list to revisit your estate plan. These changes may require alterations in both new and old estate plans.

2. Not Updating Powers of Attorney

Every estate plan should include powers of attorney. You need at least two, one for financial matters and one for medical care, often called an Advance Heath Care Directive in California. Unfortunately, many people don’t have either of these documents, and others haven’t kept them up to date or given the details much thought.  Be sure you have these completed these documents and that they have been reviewed recently. Your financial power of attorney agents normally mimic your Executors and Successor Trustees.

3. Not Updating Beneficiary Designations

Failure to update beneficiary designations means an asset might go to your parents, siblings, or even an ex-spouse because of what the original form states. Your asset may be designated to a deceased person, or other unintended beneficiaries – we’ve seen it all. Other times someone is inadvertently excluded because they were born or married into the family after you completed the form. Review your beneficiary designations every couple of years and after every major life change in your family.

4. Not Updating Asset Ownership

You might own some assets in your own name and others in joint title with your spouse, adult child, or someone else. Some assets might be in your trust, limited partnerships, or other vehicles. When you have a living trust, the trust only protects assets that it owns. Normally all real estate, partnerships, brokerage accounts, stocks, bonds, mutual funds, notes, bank accounts and personal property will be owned by your trust. Life insurance policies will name your trust as beneficiary (except for special policies created to pay estate taxes). IRA, 401K and similar tax deferred retirement accounts cannot be owned by the trust – it is critical to name the right beneficiary on these accounts.

The Tax Cuts and Jobs Act made significant changes in income and estate taxes. If you have a trust or established estate plan created before 2012, you should have them reviewed to see if they are obsolete, or add unnecessary costs and complexity. To help your beneficiaries avoid unnecessary stress, ensure that you are distributing the right assets to the right people. You would be surprised what we find in old estate plans!

Are You Worried about Your Estate Plan?

If you are not properly prepared and with a well-planned will, then your family could be vulnerable to higher tax bills, extensive legal fees, and familial conflicts. To avoid those obstacles you should visit an Estate Planning Attorney to get professional help, and create a plan that well suits your goals.

At The Law Offices of Joel A Harris located in Antioch, California (here is a convenient map), we have worked for over 25 years giving the best guidance our clients need to protect their assets. Have a question about your planning your estate? Feel free to schedule a sit-down meeting where we are happy to patiently answer every question you may have. For your free consultation reach out to us at (925) 757-4605.


California Companion Animal Trusts

A pet trust is a legally sanctioned arrangement providing for the care and maintenance of one or more companion pets in the event of a grantor’s disability or death. The “grantor” (also called a settlor or trustor in some states) is the person who creates the trust, which may take effect during a person’s lifetime or at their passing. Typically, a trustee will hold property (cash, for example) “in trust” for the benefit of the grantor’s pets.  Payments to a designated caregiver(s) will be made on a regular basis. (ASPCA)

Are You Asking Yourself “How Can Care be Provided to My Pet When I No Longer Can?”


Thinking Ahead

It’s never pleasant to think about one’s own passing or catastrophic health problems, but the only way to ensure your animal’s future is to make arrangements before tragedy strikes. Cats and dogs can live up to 20 years or more so depending on your own age, your companion could outlive you. Even if you’re young, you could still fall victim to an accident or illness. In the U.S., animals can be fully protected in one of two ways: a “Pet Trust” or a “Companion Animal Trust.” While there are other options, (Pet trusts in California are typically included in your living trust) AnimalWellness recommends these are the best options for your pet. Both go into effect immediately upon your passing or disability and ensure that your companion will receive proper care for the remainder of their days.

Choosing Your Plan

There are many ways to assure yourself that your animal will receive the appropriate care after your death. One option, like a will, are not recommended due to many inherent problems. AmericanBar provides a detailed list on why to avoid a will for your pet’s care. Instead consider a Pet Trust or Companion Animal Trust; they are better suited because of the ability to contain all the relevant options for your fur-baby’s care. It’s a simple, legally binding document that covers everything from naming a guardian to the pet’s day-to-day routine, to what funding will be provided, and they’re valid in all 50 states. According to AnimalWellnes, The Companion Animal Trust  kicks in immediately when you find yourself unable to care for your pet because of death, injury or illness. There is no waiting period or court involvement.

Approaching the Trust Like a Love Letter

Think of the trust as a document of affection and protection. So consider your pet’s daily routines, favorite treats and personal history. Many ideas for the specifics of a pet trust will spring from your close knowledge of your pet. These details in turn, can help establish an adequate level of care. According to VetStreet, by describing the specifics of your current pets, you can also cover the needs of other pets that you might have in the future. The wording should read, ‘This is the standard of care that I want for my animal.’ The emotion you bring to it, the way you treat your animals now, can be the same for later pets. The next time that you’re going through the motions — feeding your cats, taking your dogs for a walk — make a precise list of what you’re doing. What time do your dogs usually go to the park? Does your cat get a specific brand of treats? Do you scratch their ears when they lie down for a nap? Whatever may be second nature to you could be helpful information for a future caregiver.

Are You Ready To Assure Your Companion Receives Appropriate Care For Life?

Lifetime care planning for pets doesn’t have to be complicated, expensive, or overwhelming. That’s why at  The Law Offices of Joel A Harris, we offer the best guidance for animal trusts catered to your individual needs. Throughout the process, we explain everything and patiently answer every question you may have. Since 1993, The Law Offices of Joel A Harris has worked tirelessly to assure individuals receive the most beneficial Animal Trusts for their companions. We love our pets too! Feel free to reach out to us at (925)757-4605.