A well-prepared package of trust documents can save your family time, anguish, and money


By James Ward

There are numerous reasons why most people should have a trust. Two main reasons are to avoid probate and to avoid conservatorships.

Probate on an estate of $1 million could be more than $45,000. And that’s true even if your house has a large loan on it. Probate fees are calculated on the fair market value of properties without consideration of debt.

And what about time delays? Probates in Santa Clara County are currently taking over two and a half years. Yes! That’s a long time.

What about the cost of a conservatorship? That can cost much more than probate. I have seen where the bills totaled more than $20,000 per month! Billing at that rate doesn’t take long to eat through many estates.

A well-prepared package of trust documents can save your family time, anguish, and money — maybe hundreds of thousands of dollars. It’s like prevention versus cure. You can buy a quart of oil for your car for less than four dollars, but if you burn out your engine for lack of oil, the replacement cost, even with buying a used engine, could easily be $4,000 to $5,000.

I do a lot of Medi-Cal planning and Medi-Cal eligibility work. It’s much more expensive for clients than regular estate planning, but the cost of not having Medi-Cal can be exorbitant. I recently spoke with two women who had met with me previously, but in both cases the family decided my fees were too high. Neither family became my client after we met.

In one case, they didn’t want to pay my fixed fee of $12,000, but they ended up spending $88,000 on nursing home care. We could have had Medi-Cal pick up nearly the entire cost. When I asked whether it would have been better to pay $12,000 than $88,000, and widow responded that everyone thought her husband was going to die, but he just kept on living so they kept on paying. It was a big financial loss for the family.

In the other case, they thought my fixed fee of $10,000 was too high, but the daughter was crying when she called me because she just found out that her mother had spent $550,000 on her father’s nursing home bills. Wow! What’s less?  $10,000 or $550,000? Which would you rather pay? The daughter had no idea that her mother was paying so much, and now she was devastated by the financial loss.

Advance Medi-Cal planning isn’t always necessary, but you have to make sure that the proper base documents are in place so that someone can still act to do planning for the elder even if the elder can no longer sign documents due to dementia or a stroke. Many estate plans won’t allow a Medi-Cal attorney to take the proper steps to protect the family assets and get the elder on Medi-Cal, so the first step is to make sure that you have the right foundational documents in place for when you need them. You need to be proactive — just like adding the oil to your engine before the engine freezes up.

We frequently run into problems when a couple made a plan years ago and now one of them is incapacitated or deceased. Sometimes the original documents simply won’t let us do what we need to do to protect the family assets. There are a lot of estate plans that will work just fine if the person suddenly drops dead, but many of those plans won’t work at all if there is a protracted illness and the elder needs care at home or requires skilled nursing care in a licensed facility.

Don’t close out your options. Make sure the options are there if you ever want or need them. Buy that extra assurance now so we may be able to save your family hundreds of thousands of dollars down the road. Make sure your estate plan is complete, and that it has the necessary elder law features.

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James Ward

Jim Ward is a longtime South Valley resident who resides in Morgan Hill. He went to law school in New England and obtained a post-graduate law degree in Estate Planning at the University of Miami. Jim worked as an Estate Planning and Elder Law attorney in Florida, and then returned home to open his own law firm focusing on both Estate Planning and Elder Law. He maintains one office in South Valley and another in Willow Glen.
James Ward
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