The problem of not having legal documents in place is often from lack of knowledge or plain old procrastination

By James Ward

James Ward

Perhaps the biggest legal problem families face at the time of incapacitation or death of a family member is the absolute lack of proper legal documents. The second problem is people who have legal documents that either won’t work for what they need, or the documents don’t properly reflect the person’s current wishes.

As an attorney solely focused on estate planning and elder law, I see this far too often. Families get harmed by these errors.

A couple came to see me a few years ago and I recommended making changes to their old plan done years before I met them, but they figured they’d probably be okay without the recommended changes. Now, after the husband suddenly died, the widow and her adult children realize they have a huge problem with the way things were set up through their former attorney. The cost of correcting things now is more than double what it would have been because we now have to go through the court and get the court’s authorization to change the deceased husband’s part of the old trust. That’s what happens with a lot of the old trusts.

Two widows recently asked in total bewilderment, “How could my husband have done this to me? He said I was getting everything when he died.” True and not true, but the widows had also signed those old trusts, and it was likely that neither the husband nor the wife fully understood the documents they signed. Yes, the assets of the deceased person can generally be used to pay the expenses of the surviving spouse, but the surviving spouse does not have full control to do as they wish.

Trusts such as these are commonly referred to as A/B trusts even if that term cannot be found in the trust document. This is a type of trust common years ago, but these trusts can cause havoc if we need to get the survivor on Medi-Cal to cover nursing home expenses. They can also cause a problem with capital gains tax for the heirs or the surviving spouse if the property is sold during the survivor’s lifetime.

The problem of not having legal documents in place is often from lack of knowledge or plain old procrastination. The problem with having the wrong documents is from not consulting a qualified elder law attorney who understands Medi-Cal, or even having documents where the clients don’t understand what happens if a person is incapacitated or one spouse dies. You may never need to use Medi-Cal to pay for a nursing home stay, but your family will be grateful if it’s possible to have Medi-Cal pick up most of the tab. Make sure your documents don’t prohibit us from doing what’s best.

A well-prepared trust can avoid probate and conservatorships. Both of these situations are very costly to the family, and probates in our area can take up to 30 months now. Yes, it frequently takes two and a half years or more to settle your estate if your estate has to go through the probate court.

A young man came to me recently after his father died suddenly without a trust. The son consulted with an attorney the family used before, and he was told that since others in the family had used this attorney previously, the son should too and everything would be resolved in 12 to 18 months. Really?  It has been more than 30 months now and things are still dragging on with the son having received nothing and the legal bills keep piling up.

Don’t let this happen to your family. First, make sure you have the proper legal documents in place, and that each document is valid. Second, make sure you understand what your documents say. Who’s in charge if you’re incapacitated? What happens after the first spouse dies? How is the surviving spouse treated? Don’t leave it until it’s too late. Get the proper documents in place now and know what they say.

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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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