A living trust is a contract between you — as the owner of your assets — and you — as your trustee. All that is required to create a living trust is an agreement that documents your intentions and instructions with regard to your assets and the transfer of those assets into the name of your trust. Having your assets in a living trust does not change your relationship to your assets — you still make all the decisions with respect to buying, selling and investing.
Individuals who have a disability or disabilities that require significant, long-term resource support often depend on public assistance benefits to help defray the overwhelming cost of treatment, even when they or their family would not otherwise require such support. Many of the public assistance benefits, including Supplemental Security Income (SSI), Medicaid (Medi-Cal in California), housing subsidies (Section 8), Aids Drug Assistance Program (ADAP), In-Home Support Services, food stamps, and utility payment assistance are characterized as “needs-based” assistance and have strict income qualifications.
A common problem that arises in this context is that while public benefits do provide a critical source of supplemental income, they rarely cover all of an individual’s living expenses, so many recipients depend on their families for additional support. But the income eligibility guidelines are strict and complex and it can be very difficult to figure out how a family can provide the necessary financial support without putting the beneficiary over the income limits. In 1993 Congress authorized the creation of Special Needs Trusts (SNTs), a form of trust designed specifically to address this problem.
Establishing a trust during life provides protection and ease of asset management during a person’s incapacity. A trust also directs the disposition of assets at a trustor’s death and generally allows the decedent’s estate to avoid the costly, public probate process (assuming the trust is properly funded). However, a decedent’s trust must still be administered to insure that the successor trustee properly complies with her/his responsibilities and duties and that the beneficiaries receive their assets in a thoughtful and tax efficient manner.
We at DLKLawGroup PC have over 30 years of combined experience in trust administration and probate. We understand that there are often multiple interested parties and that sensitivity and thoroughness are critical to a successful administration process. We will work closely with each trustee to make sure they are fulfilling their duties completely and responsibly.
It’s not unusual for people’s eyes to glaze over when the topic of retirement plans comes up. But this is one time when you might want to pay attention because the Pension Protection Act of 2006 (the Act) includes provisions that really are great news for same-sex partners and other unmarried persons. The first important modification is that a non-spouse may now be the designated beneficiary for an eligible retirement plan. The second change is that an employee who designates a non-spouse beneficiary may now tap into the employee’s retirement funds in certain “hardship” situations to help the beneficiary. Each of these provisions is discussed in more detail below. However, in recognition of those glazed looks, some basic information about pension plans will probably be helpful.
In March 2003, DLKLawGroup client Thom Anderson lost Mac, his partner of 27 years. As the surviving joint tenant, Thom took ownership of Mac’s half interest in the home they had shared for the last 24 of those years. What Thom did not know was that because he and Mac were not a married couple, this transfer constituted a change of ownership under California law, a situation that triggers a reassessment of the property. The reassessed value of the home was over $150,000 more than the base year value in 2002, and Thom’s tax bill jumped more than 50%. The increase was so great that Thom, who lives on a fixed retirement income, has been struggling to pay the taxes and keep his home.
SB 559, authored by Senator Christine Kehoe (D-San Diego) and sponsored by Equality California (EQCA), addresses this issue by allowing individuals like Thom to seek a reassessment that would restore the property to its prior appraised value. The bill specifically excludes transfers of property between RDPs that occurred between January 1, 2000 and January 1, 2006 from the definition of change of ownership. Individuals who have been party to such a transfer would be allowed to make an application for reassessment until June 30, 2009, and assessors would be required to reverse any prior reassessments and restore the appraised value accordingly. The former appraisal value will serve as the base year value for taxes going forward.