Q.  Our 35 year old daughter is going through a divorce. She is on disability and gets SSI and Medi-Cal. We worry that she may lose her benefits once she is awarded support and receives her share of community property. You recently wrote about a Special Needs Trust to protect benefits for a senior in a nursing home. Might that trust also be used in her situation to protect her benefits?

A. Yes, indeed, and my compliments for asking the question. Very few attorneys and judges are familiar with the use of the Special Needs Trusts (“SNT”) in the divorce context. As a result, the sad fact is that many persons on SSI and/or Medi-Cal lose their benefits when they divorce.  A bit of background:

To qualify for Supplemental Security Income (“SSI”), an individual with a disability must meet two conditions:  She must (a) have less than $2,000 in non-exempt resources (e.g. savings), and (b) her monthly income must be less than the SSI benefit rate, currently $895.72 (in 2017).  An award of SSI also entitles the beneficiary to Medi-Cal.

In the divorce context, a spouse would typically be awarded both spousal support and a division of marital assets, such as bank accounts, IRA’s, etc.  If that spouse were receiving SSI and/or Medi-Cal, the award of support and/or marital assets  could render that spouse ineligible for public benefits if they put her over the respective income or resource ceilings. The question, then, is whether there is a way to preserve BOTH a spouse’s public benefits AND her right to support and share of marital assets?

Answer:  YES. Enter the Special Needs Trust.  If handled with proper care, the SNT could hold both court-ordered support and resources, thus preserving for the spouse with a disability both her public benefits and the divorce award, and thereby helping to make her life post-divorce a bit easier.

Once inside the SNT, the Trustee would handle the funds in a manner compliant with the SSI and Medi-Cal rules. This typically would mean that the Trustee would not disburse funds directly to your daughter, herself, but instead would pay third party providers, selected by her, directly for goods and services that she needed, such as a car, computer, clothing, etc. A good trustee would comply with your daughter’s requests for payment to her selected providers, so long as those payments did not undermine her ongoing eligibility for the public benefit programs. The trustee would also typically make periodic reports to the government programs to affirm compliance with the program rules.

If mentally competent, your daughter could create her own SNT and even select her own Trustee, who might be a parent or trusted friend. Alternatively, she could join a Pooled SNT established by a non-profit organization, which would provide professional trustee services for a reasonable fee.

To make this option work, it is essential that your daughter engage an Elder Law or Special Needs attorney familiar with the use of the SNT in divorce. The SNT attorney would then work with her divorce attorney and might help educate the judge and opposing counsel to the benefits of this technique. It is also best that the SNT attorney be engaged early in the case.

ReferencesSI 01120.201(J)(1)(d) [“.unless the assignment is irrevocable.”]; SI 01120.200(G)1)(d) [“..as a result of a court order…”]; SNT Fairness Act

Q.  My wife suffers from Parkinson’s and has been in a nursing home for some time. About a year ago, we put everything in my name so she could qualify for a Medi-Cal subsidy to help pay for her care. We currently have only simple wills which leave everything to the survivor of us, and then to our two children. Is this the best plan?

A.  Probably not, and here’s why: if for some reason you predeceased her, then all of your assets would go to her. These assets would then put her over the $2,000 Medi-Cal resource ceiling for an unmarried individual, and she would be terminated from the program. She would then have to use these very assets to pay for her care, potentially depleting a lifetime of savings and leaving little or nothing as an inheritance for your children.

A better plan would be to change your own will and trust so that if you predeceased her, your assets would go into a Spousal Special Needs Trust (“S-SNT”) for her benefit. The S-SNT is a special trust which would hold these assets in the name of a “friendly” trustee, who would use them to pay for extra things for your wife not provided by Medi-Cal, such as a TV in her room, occasional outings, and perhaps companion visits. Because the assets would be owned by the trustee, they would not count as hers and would thus not undermine her continued eligibility for Medi-Cal. One of your children could serve as trustee.

Upon her later demise, the balance remaining would go to your children or other designated beneficiaries.

This spousal S-SNT requires that your plan be structured in a very special way. Because of a quirk in the law, it must be created by Will, and not by trust. In this sense the S-SNT created for a spouse is very different from the Special Needs Trust sometimes created for a child or grandchild on public benefits.

Your plan could still use a trust and companion will. They would be structured so they worked together but contained a kind of “toggle switch”:  If your wife predeceased you, then upon your own later demise they would pass everything to your children by trust.  But, if your wife survived you, the “switch” would trigger and trust assets would, instead, transfer to the Will to create the S-SNT for her.

Because the S-SNT for a spouse must be created by will, it requires some involvement by the probate court after your demise. Fortunately, this requirement does not necessarily mean that your estate would need to go through a full probate. It only requires that, after your demise, a petition be filed in the probate court seeking an order formally establishing the S-SNT and authorizing its funding from your probate estate. Once the order is granted, your estate assets would be so transferred, and the probate could then be closed.

This plan does require that it be in place before your demise and its design and implementation does require special skill.  I recommend that you seek out a knowledgeable Elder Law or Special Needs attorney to assist you in creating it.

Note:  A variation of this plan would be suitable for a couple, presently in good health, who wish to plan for the possible future long term care needs of the survivor of them.

Reference:  42 USC 1396p (d)(2)(A) [“Treatment of Trusts”]. Note the phrase “established … other than by will”.

Q.  A while back you wrote an article advising that the obligation to repay Medi-Cal for benefits received during life changed as of January 1, 2017. Does that mean that we no longer need to include Medi-Cal planning powers in our estate planning documents.

A. Not at all. While the rules requiring “payback” to Medi-Cal have changed dramatically for persons dying after January 1, 2017, (making only estates that go through probate subject to recovery), there is still a need to plan ahead for Medi-Cal eligibility and those rules have not changed.

Background:  Elders in need of nursing home care face costs of $9,000 per month or more, and risk running through a lifetime of savings to finance that care. Fortunately, the Medi-Cal program offers a safety net, helping those who qualify avoid financial ruin.  However, Medi-Cal has strict resource caps to qualify:  $122,900 in non-exempt assets for a married person, and only $2,000 for an unmarried person.

Persons over the resource caps must either shoulder the entire financial burden themselves until they “spend down” to the caps, or engage in proactive Medi-Cal planning to bring themselves under these caps. However, to engage in this planning the applicant must either have full mental capacity at time of need, or have legal documents in place — with special provisions — so others can do so for him. Consider these examples:

(1) Mary: Married Person: $300,000 in Cash Assets: In this case, Mary and her spouse are over the Medi-Cal resource cap by $177,100, and Mary would not qualify for a Medi-Cal subsidy. However, there may be lawful strategies that could be used to bring the couple’s assets down below the resource caps. Examples: give away the excess to children, albeit in a very special, Medi-Cal compliant manner; use the excess funds to purchase a very special kind of annuity; or, convert excess cash assets into exempt assets, such as by paying down a home mortgage. However, if Mary is incapacitated, she may be unable to join in these actions, unless special powers were included in her Power of Attorney and/or Trust authorizing others to do so for her.

(2) John: Single Person: Home Sale Contemplated:  Let’s suppose John cannot live safely at home. His family anticipates the need to sell his home, worth $750,000, to finance care in an Assisted Living Facility (“ALF”) on a private pay basis, as Medi-Cal usually does not subsidize care in an ALF, but only in a nursing home (“NH”).

If John’s care needs later increase to the point where he needs nursing home care, the sale proceeds still in his name would then likely place him over the Medi-Cal resource cap and render him ineligible for a Medi-Cal NH subsidy.   A better plan:  if a special “Medi-Cal Asset Protection Trust” (“MAPT”) were first created to hold title to the home, and title to the home were placed into this trust before sale, then the sale proceeds would not go to John, but rather to his Trustee. The Trustee could then use them for John’s care in the ALF. When he later needed a Medi-Cal NH subsidy, the remaining proceeds would not be treated as owned by John.  He might then qualify for a Medi-Cal NH subsidy if his other resources were below the cap, and thereby preserve his remaining estate for family. However, if John lacked capacity at this time of need, this planning option may not be available to him, unless he had advance planning documents in place — with special planning powers — so as to permit others to create the MAPT for him.

In sum, it is still wise to include special Medi-Cal planning powers in your estate planning documents, for possible future need.


Q.  I am a frequent user of Facebook and Twitter, and I sometimes wonder what would happen to my accounts upon my death. Would my family be able to access my posts?

A. Under a new California law that went into effect January 1, 2017, the answer is “yes”, provided that you take proactive steps during your lifetime to authorize access after your death. The new law is called the Revised Uniform Fiduciary Access to Digital Assets Act (“Act”) or AB 691. Previously, California law was silent on the right of family members to access such records after the owner’s death.

Under the new law, there are essentially four ways in which you may give a person you trust (your “fiduciary”) access to your social media accounts after your demise. The “Act” calls these “digital assets”.

1)  Use On Line Tool:  You may give consent in the “Online Tool” set up by the custodian, such as Facebook or Twitter, in response to the new law. The consent you provide in this tool overrides anything to the contrary in the custodian’s “terms of service”, or any contrary intention in your will or other legal document;

2)  Grant Authority In A Legal Document:  Under the new law, you may grant access in your Last Will, Power of Attorney, Trust, or other legal document.  However, this authorization must specifically grant the right to access your digital assets; a general grant of authority to deal with your estate may not be sufficient.

3) Terms of Service Agreement: If you have failed to grant access by using the  custodian’s “Online Tool”, nor given specific authority in your Last Will or other legal document, then the custodian’s Terms of Service (“TOS”) would control, and the TOS may or may not grant authority to access records of your digital communications after your death.

4) Court Order: Finally, unless you have specifically objected to the release in the Online Tool or in your Will or other legal document, your executor might apply for a court order, provided that he or she can show that disclosure is reasonably necessary for estate administration.

So, if you would like others to have access to your digital assets after your death, the two best ways to do this are as follows: (a) go to the custodian’s website,  locate the “online tool” established pursuant to this legislation and specifically consent to disclosure to your executor, successor trustee, or other designated loved ones after your death; and/or (b) specifically authorize disclosure in your Last Will, Power Of Attorney, Trust or other legal document.

If you have already prepared your estate planning documents, you might consider the creation of a stand-alone Power Of Attorney for Digital Assets.  Note: normally, a power of attorney expires upon the death of the maker. However, under this legislation, a consent in a power of attorney to access digital assets would apparently still be valid, for that limited purpose, after the death of the maker.

There are some shortcomings in the new law, namely: (1) it does not authorize access upon the owner’s incapacity, but only after the owner’s death; and (2) it does not appear to authorize access to financial accounts, such as bank or brokerage accounts, but only to social media and email accounts.  Still, if you desire to provide access to your social medical digital assets after your demise, you may now do so, provided that you take proactive steps as outlined above.

References: Revised Uniform FIduciary Access to Digital Assets Act (AB 691)

Q.  My wife and I are covered by a Medicare Advantage Plan, but we often find that doctors listed in our plan’s directory turn out not be in the Plan. This makes it difficult for us to rely upon the list to seek care from doctors in the network. Any comment upon this?

A.  Yes, and you are not alone. As you know, Medicare Advantage plans are a popular alternative to regular Medicare because the MA plans typically offer lower out-of-pocket costs and the same basic coverage as original Medicare, plus some additional benefits and services that original Medicare doesn’t offer. However, seniors need to make sure they know how their plans work

Medicare Advantage plans rely upon members seeking care from In-Network providers and they typically have different coverage rules for out-of-network care. It is therefore important to know which doctors and hospitals are in a plan’s network when you seek care. Reliance solely upon your plan’s provider directory could lead to surprises and unexpected medical bills.

A recent government review of Medicare Advantage plans revealed that their provider directories were often riddled with errors. The most egregious errors were the frequent identification of doctors as being in the Plan Network, who actually were not. In this regard, the Centers for Medicare & Medicaid Services (CMS) conducted a review of online provider directories for Medicare Advantage plans.  It found that there was incorrect information for half of the 5,832 doctors listed in the directories of 54 Medicare Advantage plans, together representing a third of all Medicare Advantage providers and covering approximately 17 million Americans.

As a result of that review, CMS warned 21 Medicare Advantage insurers to fix the errors by February 6, 2017, or face serious fines.

Before purchasing a Medicare Advantage plan, you should double check with the doctors and hospitals you use in order to verify that they are part of your Plan’s provider network. Once you are enrolled, and before you arrange for care from a new medical provider listed in your directory, you should first call the provider’s office and verify that he or she is actually still part of your plan’s network.  Doing so may prevent some unexpected bills for out-of-network medical care and help make your selected plan work for you.


CMS Report:  Online Provider Directory Review Report; Kaiser Health News Article

Q.  Tax day is coming soon and I wonder if I can claim a tax deduction for my Long Term Care Insurance Premiums paid during this past year?

A.   Depending upon your income and age, the answer may very well be ‘yes’, at least as to a portion of your premiums paid. Here’s the way it works:

AGI Threshold:  Premiums for qualified long-term care insurance policies are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed 10 percent of your Adjusted Gross Income. This is sometimes referred to as the “AGI Threshold”. However, in tax year 2016, taxpayers aged 65 and older only need medical expenses to exceed 7.5 percent of their income, but in 2017 they will have the same 10 percent threshold rule as everyone else.  If medical expenses do not exceed these AGI Thresholds, then they are not deductible.

Age Determines Extent of Deduction That Can Be Counted:  The amount of long-term care insurance premiums that are countable toward your AGI Threshold is based upon your age, and the amount changes each year. For the 2016 tax year, taxpayers who are aged 40 or younger can count toward their deduction only $390 a year; taxpayers between 40 and 50 can count $730; taxpayers between 50 and 60 can count $1,460; taxpayers between 60 and 70 can count $3,900; and taxpayers who are 70 or older can count up to $4,870 in LTC premiums toward their AGI Threshold.

What this means is that taxpayers must total all of their medical and LTC Premium expenses and compare them to their incomes. For example, suppose 64-year-old Frank has an adjusted gross income of $30,000 and long-term care premiums totaling $5,000, plus $1,000 in other medical expenses. Ten percent of $30,000 is $3,000, which is then his AGI Threshold. Therefore, Frank can only deduct any medical and LTC expenses that exceed $3,000. The 2016 limit for counting long-term care premiums is $3,900. That means Frank can only count $3,900 of his long-term care premiums. If he adds the countable $3,900 in long-term care premiums to the $1,000 in other expenses his total medical expenses are $4,900. He can therefore deduct $1,900 in medical expenses from his income ($4,900 — $3,000).

If Frank is 70 in 2016, the calculation changes because his medical and LTC expenses only need to exceed 7.5 percent of his income, which would be $2,250 in Frank’s case ($30,000 X 7.5% = $2,250). In essence, he has a lower qualifying AGI Threshold.  Also, the amount of premiums he can count toward his deduction is increased because of his age: because he is 70, he can count toward his threshold up to $4,870 in LTC premiums. Subtracting the 7.5 % deduction threshold from his total medical expenses, Frank can deduct $3,620 in medical & LTC expenses from his income ($4,870 + $1,000 — $2,250). In 2017, Frank will only be able to deduct medical and LTC expenses that exceed 10 percent of his income, so his qualifying AGI threshold will go up and, hence, the amount he can actually deduct from his income will go down.

In sum, the amount of your tax deduction will depend upon your age, the amount of your adjusted gross income, your applicable AGI Threshold and the extent to which your countable medical expenses exceed your AGI threshold.


Gene L. Osofsky wishes to thank ElderLawAnswers.com for permission to revise and publish this article.

Q.  My wife and I want to make a loan to our son to help him buy a home. We are really not interested in charging interest and we might even forgive the loan in our Wills. Are there any tax implications of which we should be aware?

A. Yes, there are. Concerns regarding intra-family loans of this nature often fall into two categories:

1) The Initial Loan: Imputed Interest: If you were to make an interest-free, or below-market rate, loan to your son, the IRS would presume that the loan was really a disguised gift. Gift Tax rules would then be implicated. Depending upon the amount involved, the “loan” could trigger an obligation to file a Gift Tax Return and either (a) a reduction in your remaining lifetime exemption amount, or (b) an obligation to pay a gift tax.  Thus, in order to recognize this transaction as a true loan, the IRS requires that it carry a minimum interest rate. This minimum rate is called the Applicable Federal Rate (“AFR”), which is published monthly by the IRS.

To the extent the interest on your loan is below that rate, you and your wife would be deemed to have imputed income, even if you never actually receive any interest payments. Some people refer to this as phantom income. If you failed to report it on your tax return, the IRS could determine that you had underreported your income, and you might then be subject to income tax on the phantom interest and an under-reporting penalty.

However, if you structure the loan properly at the outset, you can avoid these Gift and Income Tax problems. Essentially, you would prepare a written promissory note which assigned a rate of interest to the loan at least equal to the then applicable AFR.  By way of example, a $50,000 loan for a three-year term made in January, 2017, must carry an interest rate at least equal to 0.96% to comply with the AFR. If for a term of 3 to 6 years the AFR would be 1.97%, and if for a term of 9 years or longer the rate would be 2.75%.  Notes payable “on demand” require use of a blended rate. Further, if the loan were secured by a recorded deed of trust on your son’s home, he may be able to claim the home-mortgage interest deduction on his own tax return.

So long as the loan were structured in this manner and the corresponding interest declared on your tax returns, you would be in good stead with the IRS.  Note: There is an exception to the imputed interest rules where the total loans outstanding to your son do not exceed $10,000, and a qualified exemption for loans between $10,000 and $100,000.

(2) Loan Forgiveness; Recognition of Income: Sometimes parents provide in their wills or trust that loans to their children are to be forgiven upon the parents’ demise. The question that arises in this context is whether the debt forgiveness results in the recognition of income to the child under the “Cancellation of Debt” (“COD”) rule. Good news: generally speaking, amounts cancelled as a result of bequests or inheritances are exceptions to the recognition of income rule, and loan forgiveness in this context would usually not result in the recognition of taxable income to the child. Another option:  use your Annual Exclusion Amount ($14,000/person/year in 2017) to partially forgive his debt each year. Same result, over time.

These rules are complex.  Anyone considering debt forgiveness would be well advised to seek professional advice as part of one’s planning.

References:  Internal Revenue Code § 1274(d) [Determination of Applicable Federal Rate]; IRC § 7872 [Treatment Of Loans With Below-Market Interest Rates]; IRS Publication 4681 [Cancelled Debts @ page 4]; Rev.Rul. 2017-2 [AFR’s for January 2017];  Rev.Rul. 2017-07 [AFR’s For March, 2017]; Historical Index of Applicable Federal Rates. Note: The AFR “Short Term” rate is for loans of 3 years or less (or demand loans); “Mid-Term” rates are for loans of 3 years to 9 years, and “Long Term” rates are for loans for a term of more than 9 years.

Q.  My wife and I created our estate planning documents about 10 years ago and we really have not even looked at them since. Do you have any thoughts about when we should consider updating them?

A.  Yes, I do. I would tie a review and update into a New Year’s Resolution. Many of us resolve to eat healthier and exercise more in the New Year. I would suggest another resolution: persons who have not created an estate plan should resolve to create one; and those who have already created one, such as yourself, should resolve to update them as need and changes in the law may require.

A very basic estate plan would typically consist of the following legal documents: a “Living Trust”, a backup Will, and a Durable Power of Attorney and an Advance Health Care Directive for each person. These documents are designed to be reviewed, modified and updated as circumstances change. Benchmarks for updating these documents might include the following: changes in family structure, such as by births, deaths, divorces and marriages; changes in the ability to manage one’s own finances and/or the onset of incapacity; the need for long-term care; the disability of a child; and changes in tax law.

However, as much as we encourage clients to review and update their estate planning documents, too few actually take that advice. In this regard, I have seen wills of deceased parents, prepared two or three decades earlier, which still refer to their children as minors, and others that mention only one child when the parents subsequently had more children. Outdated documents can sometimes be more problematic than none at all.

If it has been 10 years or so since you created your documents, you very likely have provisions in them which were designed with old tax law in mind, and that would now make administration of your estate unduly cumbersome. I refer, specifically, to the common practice years ago, when the estate tax exemption was $1 million per person or less, of requiring asset splitting and sub trust funding at the first death in order to minimize the estate tax bite. Now, with the federal estate tax exemption at $5.4 Million per person (for persons dying in 2017), and the corresponding option afforded married couples to double that amount, the need for burdensome sub-trust funding is no longer necessary for most couples. If your 10 year-old plan falls into this category, you may wish to modify it to eliminate this requirement and make trust administration easier for the survivor.

For those who have not created an estate plan, I would encourage them to do so at the earliest opportunity. Sometimes setting a specific calendar deadline is helpful, such as taking steps to create a plan and have it in place by March 31 of the coming year.

The New Year is a time for renewal. Let’s add getting your legal affairs in order to your other resolutions. Your elder law or estate planning attorney can assist you in crafting an appropriate plan to meet your present circumstances.

Q.  I hear that President Obama just signed a new law that makes it easier for disabled persons to create their own Special Needs Trust. Do you know anything about this?

A.  Yes. With strong bipartisan support, just last week President Obama signed a comprehensive piece of legislation called the 21st Century Cures Act, primarily designed to find a cure for cancer, Alzheimer’s and other diseases. Included was a short provision known as the “Special Needs Trust Fairness Act”, designed to correct a decades old error in the law that presumed that all persons with disabilities under age 65 lacked the mental capacity to handle their own financial affairs.

Background:  in 1993, Congress passed legislation to help ensure that individuals with disabilities could use money they had saved, or received as gifts from family, in order to provide for their own supplemental needs not covered by public benefit programs while still maintaining their eligibility for Medi-Cal and SSI.  Congress did so by creating the “Special Needs Trust” (“SNT”). So long as these funds were held inside a properly established SNT, they were not counted against the individual and did not impair his or her eligibility for public benefits. In essence, the SNT allowed persons with a disability to live a better quality of life above the bare-bones minimum subsidized by public benefits.

There were, however, two “glitches”:  (1) the law made an artificial distinction between those individuals under age 65 and those over age 65; only the younger group could benefit from an individually customized, stand-alone SNT. The older group was limited to joining an existing Pooled SNT, created and managed by a nonprofit association for the benefit of many individuals; and (2) the law presumed that the younger individuals lacked the capacity to create their own SNT, instead requiring that it be established by a “parent, grandparent, legal guardian, or the court”.

For the younger individuals under age 65, this requirement presented problems for individuals who did not have qualifying family members willing or able to act; alternatively, the law required court proceedings with unnecessary legal fees, delayed implementation, and associated legal obstacles.

“Glitch” Now Partially Corrected : For the under age 65 group, that ‘glitch” has now been corrected, so that younger individuals with capacity may now create their own SNT without the need to rely upon the availability of a qualifying family member or the court.  Unfortunately, the law still limits those persons over age 65 to the option of joining a Pooled SNT, with its associated management fees.

President Obama signed the law on December 13, 2016, and it became  effective on that date. So, if you are under age 65, you can now sign your own Special Needs Trust and plan your financial affairs like everyone else without worrying that you may jeopardize your Medi-Cal or SSI and fall further into poverty. You should, however, seek out a knowledgeable Elder Law or Special Needs attorney to assist you in creating the SNT.

Note: the new law does not change the rule that requires that any funds remaining in your SNT, upon your demise, be first used to repay the state for Medi-Cal benefits received during your lifetime. But this rule would seem a small price for the new empowerment and opportunity to live an enhanced quality of life.

References:  21st Century Cures Act [Scroll to § 5007 at page 440]; Press Release, National Academy of Elder Law Attorneys; Statement By President Obama on Passage of H.R. 34; Social Security Emergency Message in Accord with the New Law; SSI POMS

Q.  My partner and I have been in a Non Marital relationship for approximately 10 years. Unfortunately, she is showing signs of early dementia, and her children from her former marriage are trying to take over her financial and personal life in a manner which is not in her best interest. We do not have anything formal recognizing our relationship, nor even any basic estate planning documents. Do you have any thoughts as to how we can legally empower each other to manage the other’s affairs when the time comes?

A.  Unfortunately, your situation is all too common. Whether her children’s behavior is motivated by concern for their parent, or by their perceived need to protect their own inheritance, the situation can definitely complicate your lives and lead to unintended consequences. If you have not married, not filed formal documents to become Registered Domestic Partners (“RDP’s”), nor created an estate plan recognizing your relationship, then in the eyes of the law neither of you would have the legal right to manage the personal or financial affairs of the other.

Some of the situations that could arise in this circumstance might include the following:

1) When she becomes incapable of making decisions for herself, her children, rather than you, would have legal standing to petition the court to become her conservators, with the associated legal right to control her care, manage her finances, determine where she lives, and even bar you from visiting if they were so inclined.  Further, if you now live in her home, they might even force you to vacate;

2) Unless you were designated as a signer on any of her bank or brokerage accounts, you would have no legal authority to draw upon her funds to pay her bills;

3) Upon her demise, you would have no legal right to become her estate administrator in the event a probate proceeding were necessary, nor any standing to be treated as an heir or beneficiary of her estate.

In short, if your relationship is not formalized and if you have not created an estate plan for yourselves, the law would treat you as merely her friend, rather than as a spouse or family member. As a result, you would have little if any legal rights.

One remedy for this situation is to create an estate plan which recognizes your relationship and, to the extent each of you so desires, designates the other as the agent, executor, successor trustee, and/or beneficiary of each other’s estates.

However, merely because your plan may recognize each other in some fashion does not mean that her children, nor yours if you have any, would need to be entirely left out.  Example:  If she owns the home you live in, she could give you the legal right, if you are the survivor, to remain in the home rent-free for the rest of your life with the home going to her children only after your demise.

Since you indicate your partner is showing signs of early dementia, it will be important to first establish her mental capacity to sign legal documents. In this regard, a letter from her physician so affirming will be helpful. The key is to start planning now and place a high priority on completing your plan soon.