It’s frustrating to see clients with inadequate legal documents.

By James Ward

James Ward

Do you already have an estate plan that includes a trust and a durable power of attorney? When was the last time you had them reviewed by a qualified attorney who practices both estate planning and elder law?

I recently had a new client who was referred to me by another attorney. Her husband had advanced dementia and she didn’t know what to do next, so her attorney friend sent her to me. The client had a full estate plan that was prepared by another attorney 12 years earlier, and she brought it in for me to review.

Well, she and her husband were proud of themselves for getting their documents in order several years ago to protect themselves and their children, but nobody had reviewed the documents for them since they set them up. The trust created a problem because it had restrictions placed on the surviving spouse that are no longer needed due to tax law changes, and the durable power of attorney was deficient since it was first signed 12 years ago. Yes, the wife could do some of the simple tasks such as paying the bills, but she was prohibited from taking some of the more advanced actions to protect the family assets and get the husband on Medi-Cal and save the family about $10,000 per month.

For most people, saving $10,000 per month is significant. It’s especially so when the surviving spouse, the wife in this case, was likely to live another 20 years or so and would probably need the money for her own support.

The wife in this case was in a real pickle. Her husband couldn’t sign any new documents because of his dementia, and she was spending money to pay for his care with no end in sight. A quick review by a qualified elder law attorney should have picked up these problems years ago and they could have been easily remedied while the husband was still competent and able to sign new documents.

The client and her husband had taken the right step to get their estate plan put in place, but the attorney they used didn’t understand elder law, and they never adjusted the trust to accommodate the change in tax laws.

I wrote this column because problems with poor planning documents come up frequently. Two days after the above client came in, another woman called. She’s in her early 60s and on disability with Medi-Cal paying for her Medicare. She can’t afford to lose her health care coverage, but she stands to inherit half of her father’s house, plus 100 percent of a rental home he owns, and his trust has no provision to protect her against losing her government benefits upon inheriting the properties from her father. It’s a simple fix, but her father’s attorney didn’t include the proper clauses to protect the disabled daughter.

It’s frustrating to see clients with inadequate legal documents. The clients tried to protect themselves, but the documents just weren’t done right. And, in many cases, the clients know or feel something isn’t right, but they never get around to having the right professional take a look at what they have.

First, get a professional estate plan prepared and put in place by a qualified attorney who practices both estate planning and elder law. Second, if you already have legal documents, get them checked by a qualified attorney to make sure they’ll work for you and your family at the time they’re needed. Don’t wait. Get it done!