Monday, November 25, 2013

What happens when a family member takes advantage of a parent’s estate? Can a Trustee be removed?

Lynn A. Dean
Estate Planning Attorney
When there are questions by family members of whether a trustee breached the fiduciary responsibility for a loved one’s estate, recourse is possible but can be timely and costly. 

Case in point:  A clients’ mom had passed away where the daughter, the clients’ sister, was the trustee.  While mom was living, she had multiple strokes and sister decided to have major construction done to her house.  She built two bedrooms, a bathroom and living area and moved mom in.  Mom’s house and the rest of her assets were to be equally divided among all the children. The sister, who still lives in the house now claims there is no money left.  The family believes that the sister spent all the assets all the while claiming the home reconstruction was for mom’s benefit.   The second house (mom’s original property) is occupied by the sister’s child, who is not paying rent to the trust.  The family asked “Is there any way to force pay back to the estate or have the sister removed as Trustee?”

These situations are unfortunate and not simple to answer.  It is a good reminder of the importance of choosing a proper trustee for your Estate and to review who that is over time. 

First, the family believes that the sister took advantage of her position as successor trustee, in order to benefit only herself. This is what we call “self-dealing.”  While mom was alive, the sister was assigned to ensure that any monies spent were to benefit mom’s care. If mom was still living in the home when construction occurred, the first question would be: Did she consent to the work sister was doing? If she did, then there may be an uphill battle trying to persuade a court to force sister to pay back funds.  Whether the sister breached her fiduciary duty to her mom by doing the home construction would be expensive to litigate.

If the sister does not distribute the remaining assets to the family and does not force her child living in the second home to move or pay rent, then there may be a case to remove her as trustee.  Family members can request that the sister provide an accounting of the estate. She is required to account for all funds that came into her possession while acting as trustee.

Visit our resource guide to consider what information you will need in planning your estate.   

Monday, November 18, 2013

You Are a Family Caregiver If...

  • You recently had a family member needing your support as a result of a mental illness, chronic illness or physical injury.
  • You have a special needs child.
  • You are spending more time helping your aging parent, relative or friend.
  • You are one of the 44 million American families and friends who provide unpaid care to another adult!
If you answered yes to one or more, you are not alone; you represent 80% of the long term care in the US!

If you are caring for an individual with special needs, you need to think about how that care will continue when you are no longer in the picture.  A Special Needs Trust allows the individual with special needs to receive income from the Trust without impacting their federal eligibility for income dependent benefits, like Supplemental Security Income (SSI) or Medi-Cal. Assets held in this type of trust do not qualify as available income when calculating eligibility, as the funds are not considered to be within the recipient’s direct control. Set at just 2/3 of the poverty level, SSI alone is not enough to cover someone’s minimum needs. Without this type of trust, your loved one with special needs will likely face enormous hardships after your death, depleting funds from their inherited estate within just a few years. A Special Needs Trust allows them to draw on federal financial benefits in addition to drawing income from the estate.

Family Caregivers need support and tools to help them manage the complex task of assisting someone.  Be sure the loved one has at a minimum, a valid Power of Attorney and Advanced Health CareDirective.   

There are many resources for caregivers.  If your loved one is an elderly person wanting to continue independent living, help can be found with the Area 4 Agency onAging.  The Agency serves seniors in the Placer, Nevada, and Sacramento as well as Sutter, Yolo and Yuba counties. 

You can also contact our office where we can create the documents necessary for your situation and provide you with resources for other support needs. The Law Office of Lynn A. Dean, website: www.LynnDeanLaw.com or phone: (916) 786-7515.

Monday, November 4, 2013

MANY ISSUES AN ELDER LAW ATTORNEY FOCUSES ON

There are many issues that an Elder Law attorney will focus on, including estate planning, retirement planning, and planning to preserve wealth (tax planning). The Law Office of Lynn A. Dean offers a comprehensive portfolio of Elder Law services, including:

1.      Probate
2.      Conservatorships
3.      Medi-CalPlanning 
4.    IrrevocableTrusts 

Elder Law deals with legal issues that may arise with a person’s advanced age. In recent years, attorneys have been called on to fight the growing problem of elder abuse. Elder abuse may take many forms, from mistreatment in a nursing home, to financial abuse by a caregiver or family member. Elder Law attorneys can prepare documents, allowing one or more persons to become the agent for an incapacitated or vulnerable senior. If the senior did not prepare these documents prior to being mentally incapacitated, then the Elder Law attorney may need to establish a conservatorship for the senior.

WARNING SIGNS OF ELDER ABUSE TO WATCH FOR:
  1. Taking a large amount of cash out of various financial accounts or multiple smaller amounts at a time that don’t have obvious reasons.
  2. Writing a large check to someone, especially if the they do not know the person.
  3. Changing power of attorney or beneficiaries on insurance or investment accounts.
  4. Bills going unpaid or overdrafts from accounts that should have enough money.
  5. Making unusual or unnecessary purchases – Jewelry or camping gear.
  6. Agreeing to make unnecessary home repairs – new siding on the house.
  7. Becoming too close with a much younger person or an inappropriate person.
  8. Having a caregiver or house-cleaner too involved in the finances.
The challenge of Elder Law is that every family situation is unique. An Elder Law attorney will often act as a counselor as well as an attorney, helping to facilitate relationships between family members. Attorneys are even called upon in extreme situations to fight elder abuse. It’s critical that these situations are dealt with swiftly and effectively, which is why choosing an attorney specialized in Elder Law is so important.