Law of Office of William J. Sweeney

Law of Office of William J. Sweeney

Why people with limited assets need a revocable living trust.

by William J. Sweeney on 05/18/17

(Mr. Sweeney is an attorney licensed in California. The comments below are not intended as legal advice for any specific situation and may not accurately reflect the law in other jurisdictions. There may have been changes in the law since this was written.  You should always consult an attorney in your own jurisdiction.)

Many people think a living trust is only needed by people who have a lot of money. In fact, a living trust may be more important to people with limited assets. If you, or your spouse have ever received Medi-Cal (Medicaid in other states) or receive it in the future, a living trust can be of significant benefit to you, even though you feel your estate is so small you don’t need one.

If you, or your spouse, have received Medi-Cal benefits during your lifetime, at some point after the death of the survivor of the two of you, Medi-Cal will be looking to your estate to recover as much of the money they advanced as they can. New laws went into effect on January 1, 2017. Although there have been a number of changes in the way Medi-Cal will attempt recovery, the one I want to address today is how they will approach your estate for repayment.

For a married couple, Medi-Cal’s policy is to only attempt recovery after the death of the surviving spouse, even if the first spouse to die was the spouse receiving Medi-Cal benefits. In the past, on the death of the surviving spouse, Medi-Cal would look to the assets the decedent owned and attempt to recover from them. For recipients who die after January 1, 2017, Medi-Cal will only attempt to recover benefits that are in your “probate estate”. In other words, if you hold your property in a revocable trust, Medi-Cal will not try to collect from the trust. They will only attempt to collect from assets that are in your name on your death.

You don't have to be married to benefit.  The same rules apply to a single person.

There are also other possible ways to protect your assets from Medi-Cal on your death, including joint tenancy and beneficiary designations.  While these can be effective, they should only be used after consultation with an experienced lawyer. There are potentially some problems with these which you should be aware of before you use them. The living trust gives you control of your assets during your lifetime and keeps your assets out of your probate estate upon your death.

A knowledgeable attorney can help you with this.

William J. Sweeney
Attorney at Law
915 Highland Pointe Dr., Ste. 250
Roseville, CA 95678
(916) 786-2011

California's Transfer on Death Deed - Is it for you?

by William J. Sweeney on 05/15/17

(Mr. Sweeney is an attorney licensed in California. The comments below are not intended as legal advice for any specific situation and may not accurately reflect the law in other jurisdictions. There may have been changes in the law since this was written.  You should always consult an attorney in your own jurisdiction.)

    On January 1, 2016, a new law went into effect in California relating to a way to transfer an interest in real property (for example, your home).  The intent was to provide a way for someone with a limited estate to transfer their property without incurring the cost of having a Will or Trust prepared.

    There are four requirements in order to take advantage of this law:

    1)    The property must be a single family residence, or condominium, or a multiple residence of not more than 4 dwelling units.  You can also use it for a single family home located on not more than 40 acres;

    2)    The deed must be dated and signed before a Notary Public;

    3)    It must be recorded within sixty (60) days of the date it was signed; and,

    4)    It can be revoked by the person who is making the gift at anytime during their lifetime if they are mentally competent.

This law was enacted for a period of five (5) years and, unless extended by the legislature, will no longer be available after that time.  Any deeds properly prepared and recorded within the five year period will remain in effect unless revoked.  While the idea behind this mayt be a good idea, it is my opinion it was not well thought out before being placed into law.

One of the major problems I see is that the law assumes people die in a particular order.  From more than 40 years in practice I can tell you the old doesn’t necessarily die before the young, and the sick don’t necessarily die before the healthy.

Let me give you an example of how this good idea can go haywire:

Martha has two sons, Pete and Mike.  Pete is married with no children, lives near Martha and checks in on her regularly.  For the past 30 years, as Martha ages, Pete and his wife, take Martha to doctor appointments, help her with her shopping, keep an eye on her finances and assist her in having any work done on her house, so she isn’t taken advantage of.

During that same 30 years Martha has heard nothing from Mike other than she knows he has been in and, occasionally for short periods, out of prison for a variety of criminal offenses including robbery, twice for vehicular homicide, elder abuse and numerous drug offenses.

Martha doesn’t have a lot, mostly just the home she raised her boys in after their father died but there is no question in her mind she wants Pete to get it when she dies.

Martha has been told if she just takes advantage of the new law that will let her transfer her home on her death without a probate, she will not be incurring needless expense.  She is told by doing it this way, she doesn’t even need a Will since her intended beneficiary, Pete, will get it when she dies.  Martha thinks this is a great idea.  There is no way Martha wants Mike to get anything.  She wants it to go to Pete.

At her request, Pete downloads a Transfer on Death Deed form from the web.  Martha fills in the form, goes to a local Notary Public to get it signed, and from there directly to the county Recorder’s office to get it recorded.  Everything was done properly, so it complies with the law.

Some more years go by and Martha is now in failing health and has the beginning of dementia.  Quite unexpectedly, Pete is killed in an automobile accident.  Shortly thereafter Martha dies.

Based on the deed Martha recorded years ago, her home was supposed to go to Pete.  Unfortunately, Pete did not survive her so that transfer doesn’t occur and the property is still part of her estate.  If Martha also had a Will prepared, she could have made provision for what happened to the property in the event Pete did not survive her.  Since she saved money by not doing a Will or Trust if appropriate, the property now will be distributed as provided by California law.  In this case, her remaining heir is Mike, and he gets the house.  This is exactly the opposite of Martha wanted.

The moral of this story is that even if things seem really easy and straightforward, you should always consult an attorney with years of experience.  There can be problems lurking you haven’t even thought about.

A knowledgeable attorney can help you with this.

William J. Sweeney
Attorney at Law
915 Highland Pointe Dr., Ste. 250
Roseville, CA 95678
(916) 786-2011

I own my home and receiving public assistance. Would a reverse mortgage be a good idea to get me some additional income?

by William J. Sweeney on 05/12/15

(Mr. Sweeney is an attorney licensed in California. The comments below are not intended as legal advice for any specific situation and may not accurately reflect the law in other jurisdictions. There may have been changes in the law since this was written.  You should always consult an attorney in your own jurisdiction.)

You see a lot of advertising on television and in the papers about the supposed benefits of Reverse Mortgages.  While they can result in receiving payments charged against your equity in your home on a monthly, or some other basis, there are typically significant costs involved in starting and continuing to maintain the reverse mortgage.  That is not to say in a particular case they might not be a good idea, but you should also look at other alternatives.

Also, if you are receiving some type of means tested aid such as MediCal (Medicaid) or SSI, you could find under certain circumstances receipt of monies from the equity in your home could disqualify you for the benefits you are receiving.

The subject is far too complicated to discuss in a brief article such as this, but if you are considering getting a reverse mortgage, I feel it is important you speak to someone knowledgeable about reverse mortgages (besides the person or entity trying to sell you one) and alternatives before committing yourself to one.

A knowledgeable attorney can help you with this.

William J. Sweeney
Attorney at Law
915 Highland Pointe Dr., Ste. 250
Roseville, CA 95678
(916) 786-2011

My dad’s Will says I get a “Life Estate” in a house when he dies. What does that mean?

by William J. Sweeney on 04/28/15

(Mr. Sweeney is an attorney licensed in California. The comments below are not intended as legal advice for any specific situation and may not accurately reflect the law in other jurisdictions. There may have been changes in the law since this was written.  You should always consult an attorney in your own jurisdiction.)

Generally speaking, a “Life Estate” means the house (or other property) is deeded to you for your life (you would typically be called the “Life Tenant”), and on your death, the interest in the property vests in someone else (typically called the “Remainderman”).  

It is possible the measuring life could be someone else.  For example, lets say your father-in-law left a home to you and your wife (his daughter), for her life.  If she dies before you, you would lose the house and the property would pass to whoever he named as remainderman.    

While you are the life tenant you have control of the house and theoretically even have the right to sell it.  I say “theoretically” because you can only sell what you have, and there isn’t going to be much interest in purchasing a house when the buyer knows that as soon as a specific person dies, they lose the house.  They might have it for years, or could lose it in a few days.

What I see more frequently is an older parent who transfers a home to a child and retains a life estate.  That way they still have the home for their life and on their death, full title passes to the child.  This is NOT something you do without getting legal advice.  

There can be tax issues, creditor issues and also other considerations if someone is on MediCal (Medicaid).  Always consult a knowledgeable attorney before creating a Life Estate so you know what you are getting into.

William J. Sweeney
Attorney at Law
915 Highland Pointe Dr., Ste. 250
Roseville, CA 95678
(916) 786-2011

My brother died in California and named me as Executor in his Will. I don’t live in California. Can I be the Executor?

by William J. Sweeney on 04/14/15

(Mr. Sweeney is an attorney licensed in California. The comments below are not intended as legal advice for any specific situation and may not accurately reflect the law in other jurisdictions. There may have been changes in the law since this was written.  You should always consult an attorney in your own jurisdiction.)

Yes you can.  It may not be as convenient as it would be if you lived nearby, but it can be done.  

In my experience, in the majority of probate proceedings the Executor never has to appear in court.  Things that might require an actual appearance in court can include sale of property, or if there is a dispute with beneficiaries, or creditors.  Many times they can be resolved without actually appearing in court.  

Typically, some time on location is required at the time the probate proceedings are initiated since it is the Executor’s job to gather and protect the assets as well as gather information about any known  creditors.  Sometimes it is necessary to get a house ready to sell.  Once these initial matters are addressed, further trips to California may not be necessary since your attorney should be able to handle most things my telephone, email or regular mail.  It really comes down to how involved the estate is.

For your information, some courts in California may still require an out of state Executor to post an Executor’s bond even though the Will specifically waives the bond.  The bond is paid for out of the estate.  An experienced attorney should be able to evaluate your particular situation and provide advice on how to address the matter.

William J. Sweeney
Attorney at Law
915 Highland Pointe Dr., Ste. 250
Roseville, CA 95678
(916) 786-2011