Posts By: Gene Osofsky

Q.  My 86-year-old mother is in a nursing home and receives a Medi-Cal subsidy. We just learned that her brother died and left her $200,000 in his trust.  Will the receipt of this inheritance bounce mom off of Medi-Cal?  Is there anything we can do?

A.  The answer to your first question is easy: yes, the receipt of that inheritance will put her over the resource ceiling and result in the termination of her Medi-Cal nursing home subsidy. As of January 1, 2026,  that resource ceiling is now only $130,000 for an unmarried individual.

As your second question, there may be things you can do. Here are some options:

1) Purchase A Prepaid Funeral Plan.  If she has not already made her final arrangements, she can purchase a prepaid funeral contract or fund an irrevocable burial trust for herself and other members of her immediate family.  Most mortuaries have forms available. Those funds will then be considered exempt and will not count toward her resource ceiling.

2) Pay Debts and Expenses:  If Mom has any outstanding debts or expenses, she can pay them.  Be sure to pay by check and retain full documentation.

3) Reform Brother’s Trust?  In some cases, it may be possible to reform her brother’s trust by petitioning the court for a special order during trust administration, so that the bequest would bypass your mother and, instead, go into a Special Needs Trust (“SNT”) for her benefit.  The SNT would then be managed by a trustee, which could be a family member or a professional trustee appointed by the court.  If properly set up and administered, the funds distributed to the SNT would then not count against her $130,000 Medi-Cal resource ceiling.  Instead, they could be used to pay for things that Medi-Cal does not cover, such as a companion to spend time with her or even to supplement healthcare expenses not paid by Medi-Cal.

4) Join Pooled SNT: If it is not possible to reform her brother’s trust, consider joining a pooled SNT.  These are SNT’s set up and managed by nonprofit organizations, whereby all of the funds are invested and professionally managed as a group, but separate accounts are maintained for each individual beneficiary.  Distributions from the pooled SNT could likewise be used to pay for things that Medi-Cal does not cover.  The drawback is that funds remaining in the pooled account after Mom’s death must first be used to reimburse the state to the extent of Medi-Cal benefits paid out for her during her lifetime; the excess, if any, may remain in the fund for its ongoing nonprofit purposes, or be distributed to her designated beneficiaries, depending upon the terms of the Pooled SNT “joinder agreement”.

5) Make Gifts?  If mom has full capacity to consent to gifts, or if she has in place a Durable Power Of Attorney which has adequate gifting powers (unfortunately, most do not), consideration might be given to a very carefully designed plan of divestment in favor of children or other family members. CAUTION:  gifts are frowned upon by Medi-Cal, and any gifting plan should be designed and supervised by an Elder Law attorney with expertise in this area.  If gifts are not handled properly, they may result in the termination of Mom’s Medi-Cal benefits.

As to all of the options, timing is very important, and it is usually necessary to design the plan before the inheritance is actually received so that it can be fully implemented in the month of receipt.  To avoid running afoul of the Medi-Cal rules, obtaining expert advice is essential.

Posts By: Gene Osofsky

Q. My mom owned her home for 25 years before she recently passed, and she held that in her trust.  Her trust leaves it 50-50 to my brother and me.  I would like to keep the home by purchasing my brother’s interest for cash, and he is okay with that.  Is there a way that we can do this without triggering a property tax reassessment, especially now that Prop 19 has passed?
A. Yes there is!  However, the matter must be handled in a special way.
Background: Proposition 13, which California voters passed in the 1970’s to hold the line on property taxes, nevertheless allowed the County Assessor to reassess property whenever there was a “change in ownership”.  Proposition 58, which the voters adopted later, provided that a transfer of a home between parent and child would not be considered a “change in ownership”, provided that a Claim for Reassessment Exclusion were timely filed.  Proposition 19, which became law in early 2021, adds another layer of complexity to this matter.
Under these Propositions, your purchase of your brother’s 50% interest using your own money would be deemed a “change in ownership” as to that 50% portion, because it would be deemed a non-exempt transfer between siblings, rather than a parent to child transfer.  Your purchase of your brother’s half interest would then trigger a reassessment as to that 50%, and a higher property tax going forward.
Good news, however!  There is a workaround that has been approved by the California State Board of Equalization (“BOE”).  If — rather than using your own money — the trustee of the trust borrows money from a third-party lender, securing that loan by the home, itself, and then distributes the entire home to you (encumbered by the loan amount) and an equivalent value in cash (funded by the loan) to your brother, there then may be no change in ownership and no reassessment, assuming that the value of the home is not more than $One Million above than its assessed value when owned by your mother.  You would then be responsible for the loan. Per  recent advice from the BOE, this strategy still works after Prop. 19!
To illustrate how this applies in various fact patterns, assume the following facts:  In each case assume that the home has a value of $500,000, that the trust permits a non-pro rata division of assets, that it also permits the trustee to borrow money, that you move into possession and treat the home as your own principal residence within one year of your mother’s death, that the value of the home has not increased more than $One Million beyond its taxable value when owned by your mother, and that you file a timely Claim for Reassessment Exclusion:
1) Scenario #1:  The only asset in the trust is the home.  At the conclusion of trust administration, it is allocated by deed 50-50 to you and your brother.  Result: Change in ownership but only as to 50% owned by your non-resident brother.  Reassessment as to 50% of the home’s value.

2) Scenario #2:  The trust is comprised of the home and $500,000 in cash.  The entire home goes to you and all the cash to your brother.  Equal division and no reassessment.

3) Scenario #3:  The only asset in the trust is the home.  The Trustee borrows $250,000 from a third-party lender, and distributes the home encumbered by the loan to you and the $250,000 in cash to your brother. Equal division and no reassessment.

4) Scenario #4:  The trust is comprised of the home and $100,000 in cash, for a total trust estate of $600,000.  The Trustee borrows $200,000 from a third-party lender, and distributes the home encumbered by the loan to you and $300,000 in cash to your brother. Equal division and no reassessment.

Note:  These transactions must be handled very carefully, a suitable lender engaged and adequate documentation furnished to the County Assessor.  This is not a do-it-yourself project, and it is strongly recommended that these transactions be fully supervised by an attorney familiar with trust administration, non-pro rata distributions of trust assets, and Proposition 19.

If handled correctly, preserving a parent’s low property tax base can result in thousands of dollars in savings over time and help make retention of the family home affordable going forward.

Posts By: Gene Osofsky

Q.  My husband may soon need nursing care and I will need to apply for a Medi-Cal subsidy to help with the cost.  Our incomes are modest and, aside from our home, most of our savings is in the form of our IRA’s.  A friend thought I would have to cash them out and “spend down” the proceeds before my husband would be eligible.  Does that sound right to you?

A.  Not at all.  I am sure your friend means well, but he or she is misinformed. Although the Medi-Cal rules will, as of January 1, 2026, once again impose resource “caps” for eligibility,   funds held inside an Individual Retirement Account (“IRA”) are not counted in determining whether your nonexempt assets exceed the Medi-Cal resource ceilings, provided that certain requirements are met.  Here is how Medi-Cal will, once again, views IRA’s in 2026 and beyond:

IRA In the Ill Spouse’s Name: As the spouse needing nursing care, the IRA in your husband’s name will not be counted in determining whether his assets exceed the Medi-Cal resource ceilings, provided that he is receiving periodic distributions of  “income and principal”.  This requirement is easily satisfied by drawing out the Required Minimum Distributions (“RMD’s”) under IRS rules.  So long as he takes the RMD’s, whether as monthly, quarterly or annual draws, Medi-Cal will treat his entire IRA as “unavailable” and will not count its value when determining his eligibility.  Medi-Cal will, however, treat the RMD distributions as income, which may then go toward his “co-pay” (which Medi-Cal calls ‘Monthly Share of Cost’). Note: ROTH IRA’s, which do not require any distribution under IRS rules, must still distribute some interest and some principal in order not to be in counted when tallying up your husband’s countable resources.

IRA in Your Own Name: As the At-Home spouse, the IRA in your own name does not count at all, regardless of whether you are receiving any distributions.  In essence, the Medi-Cal rules encourage you to conserve your retirement nest egg and use it for its intended purpose.

We generally suggest that a person in your husband’s situation take out the bare minimum from his IRA as necessary to comply with both Medi-Cal rules and IRS rules.  This strategy keeps his Share of Cost low and still allows him to qualify for a Medi-Cal subsidy to cover the remaining cost of care. Note, also, that there are strategies available to minimize the RMD effect upon income, but that discussion is beyond the scope of this short article

Also know that your own IRA’s can be worth any amount and still be non-countable.  There is no upward ceiling on value.  In the eyes of Medi-Cal, the only difference between your husband’s IRA and yours is that he, as the “ill spouse”,  must be receiving RMD’s in order to render his IRA’s non-countable.  And, by the way, Medi-Cal applies the same rules to other retirement accounts, such as 401(k)’s, 403(b)’s, Roth IRAs, and the like.  So, in your case, provided that your other savings and nonexempt assets do not exceed the Medi-Cal resource ceilings (projected to be $130,000 for the “Ill Spouse” and at least $157,920 for the At-Home, spouse after January 1, 2026), your husband should qualify for a Medi-Cal nursing home subsidy.  The other good news is that IRA’s are exempt from recovery after his death, provided that the designated death beneficiaries are named individuals, rather than the owner’s “estate”.

Caution:  We find that couples in your situation are sometimes told that they need to convert the money in their IRA’s into an annuity in order to render the proceeds exempt for Medi-Cal purposes.  That is not the case, and such conversions are almost always both unnecessary and inadvisable.

In short, Medi-Cal’s treatment of IRA’s and other retirement accounts is designed to help individuals and couples manage the high cost of nursing care without unduly draining their retirement nest eggs.

Posts By: Gene Osofsky

Q.  My father signed a durable power of attorney a few years back, making it effective only in the event he later became unable to handle his own financial affairs. Sadly, I think that time has come. How do I activate it so that I, whom he designated as his agent, can now act for him?

A.  Excellent question! As part of my answer, some background may be helpful: Broadly speaking, there are basically two kinds of Powers of Attorney (“POA’s”): those that are (1) immediately effective upon signing, and (2) those that become effective only later, upon the occurrence of a specific event, which is usually the incapacity of the signer, whom we call the principal. The latter are often called “springing” powers of attorney, as they only spring into life upon the occurrence of that event.

From your description, it appears that your father’s POA was a “springing power”, becoming effective only upon his incapacity, which is usually described as “the inability to manage his personal or financial affairs, resist fraud or undue influence”, or by words of similar import. It probably also indicated that proof of same should come from a doctor who examined him and who then felt that he had reached that level of incapacity.

So, what you should do now is contact his physician, arrange for an assessment of your father’s mental status and, if the doctor feels that your father is now incapacitated under the definition used in the POA document, the doctor should write a letter to that effect. That letter should reference the provision in the POA that triggers the effectiveness, include the doctor’s opinion as to the underlying medical diagnosis (e.g. dementia, Alzheimer’s, or other malady) which now renders him unable to handle his financial affairs (using the definition of incapacity in the POA document as closely as possible), and provide the doctor’s opinion that, in fact, your father now meets that test.

Importantly, the doctor should end his or her letter, with the following words, which effectively turns the letter into an affidavit, and thereby qualifies that letter as the triggering document under the California Probate Code:

“I declare under penalty of perjury that the foregoing is true and correct”.

You should then be prepared to either show that doctor’s letter, or a copy, to any third party, such as a bank, whom you would need to honor  the POA, or you might just attach a copy to the POA document, itself.

Many POA’s actually require two (2) physicians to each render such an opinion in order to trigger the effectiveness of the POA. If that be the case with your father’s POA, then you would need to seek out two doctors who would each write such a letter.

Sometimes POA’s provide that the determination of incapacity is to be made by a designated family member and/or by that family member and one (1) physician. In that case, each of those persons should write a letter rendering their opinion that your father is now incapacitated (preferably quoting the definition of incapacity used in the POA itself), and each such letter should end with the declaration phrase recited above, converting each letter into an affidavit under California law.

Note: following the above procedure does not necessarily guarantee that third parties, such as banks or other financial institutions, will always then honor the POA. However, if their refusal is unreasonable, you may then be entitled to seek a court order compelling them to do so, in which case the court may then have the authority to award you reasonable attorney fees for your undertaking. However, short of a court proceeding, we have found that a well-placed letter from your attorney to the bank or other third-party, calling attention to the fact that the conditions provided by your father in the POA have been satisfied, will often result in the compliance that you seek.

Posts By: Gene Osofsky

Q.  My father just died and I have been named as his executor. Are there steps I should take to protect against theft of his identity?

A.  Yes. As disturbing as it may seem, even the identity of the deceased is subject to identity theft. By one estimate, thieves steal the identities of more than 2 million deceased Americans every year.  Part of the reason these thieves are successful is that it can often take up to six months for credit agencies to be notified of his or her death.  In the interim, the identity thieves strike, apply for credit, make purchases, and even access the deceased’s financial accounts.  So, yes, steps can and should be taken immediately after the death of a loved one.  Here is a short list of action steps:

  • Be careful about the kind of information you put in the obituary: avoid putting information that might be used in a credit application, such as date of birth, last address or mother’s maiden name. Thieves read these obituaries precisely to glean that information.
  • Send, via certified mail, certified copies of the decedent’s death certificate to each of the three major credit reporting agencies, namely Equifax, Experian and TransUnion, advising of the decedent’s death. Include a copy of the decedent’s will or trust certification showing that you are the executor or successor trustee charged with handling the decedent’s affairs.  With your letters, furnish the decedent’s full name, date of birth and Social Security number, along with his or her most recent address and date of death.  Most important: request that the credit bureaus put a “deceased – do not issue credit” alert on the deceased’s credit files.
  • Send copies of the death certificate to each bank, insurer, credit card company and other financial institution where the deceased had accounts.
  • Cancel the decedent’s driver’s license by notifying the Department of Motor Vehicles.
  • Continue to monitor the decedent’s credit report for at least a year to make sure that there are no problems. A free copy of the credit report is available annually to executors or trustees, so I would recommend ordering one from each of the separate credit agencies every four months.  To order your free report, go to AnnualCreditReport.com or call 1-877-322-8228. You can opt to either download a copy instantly or receive a printed report in the mail.

By taking these simple steps, you can protect the identity of your loved one and help to ensure the successful administration of his estate.

Posts By: Gene Osofsky

Q. I heard that, as part of the recently passed Trump Tax Bill, that home equity will become a factor for Medi-Cal eligibility, at least for Seniors. That wasn’t really discussed in the press. Is it true?

A. Yes, indeed, effective January 1, 2028. You are correct that this issue was not really discussed in the press leading up the passing of the so-called Big Beautiful Bill (“BBB”) in Washington, signed by President Trump on July 4. Yet, this limit is in the new law and will be effective January 1, 2028 for those individuals over age 65 seeking to establish or retain eligibility for long term care Medi-Cal. Here are some aspects of the new federal law of which to be aware:

1) It will have a dramatic change to the way Medi-Cal has long treated the home in California, where — regardless of value – it has always been considered an exempt resource, and the value did not count at all when assessing eligibility for Medi-Cal;

2) It will have a dramatic effect for many seniors living in high cost areas of California, where homes – especially in the Bay Area and parts of Southern California – carry high values, often well over One Million Dollars, even for so-called average homes;

3) On the good side, the increased home value cap will not apply if the Medi-Cal applicant’s spouse or minor or disabled child is living in the home;

4) Advance planning techniques will be all the more important. These may include carefully designed transfers of all or some of the equity in the home to trusted family members, transfers of the home (or portions thereof) to certain Irrevocable Asset Protection Trusts, use of Life Estate Deeds (i.e. transfers to trusted family members with a retained right of occupancy), reducing home equity by taking out new home loans, fractionalizing equity by creating co-tenancy interests with trust family members, etc.

5) If contemplating transfers of home equity to non-resident children, the effect of Proposition 19 must be considered in order to avoid a dramatic increase in property taxes.

6) By its terms it will apply to “nursing facility services or other long-term care services”. Questions yet to be answered: Will this phrase include home care under the In Home Supportive Services Programs (“IHSS”), or Home and Community Based Services programs (“HCBS”) now offered by Medi-Cal? What about Medi-Cal for routine care for non-disabled seniors living at home? We must await clarification by the California Department of Health Care Services for these and other questions.

7) It will not apply to homes that are zoned for agricultural use. Might this provision be an opening for some creative planning? Would raising chickens in the backyard qualify one’s home for agricultural zoning in your county?

8) Very important: The home equity cap will not apply to those individuals under age 65 who are not disabled, and for whom assets do not count at all, and where eligibility is based solely upon their Modified Adjusted Gross Income (“MAGI”), and who are sometimes referred to as the MAGI population, where eligibility stems from the Affordable Care Act signed some years ago by President Obama.

Planning should be considered early. Between now and the effective date of the new rule, I and my Elder Law colleagues throughout the state intend to pool our collective wisdom in order to develop strategies to help our clients in need meet the new home equity cap. So, stay tuned.

Posts By: Gene Osofsky

Q.  You recently wrote an article advising that Governor Newsom was proposing a return to the former asset cap of $2,000 for those older individuals seeking to qualify for Medi-Cal.  Has there been any decision on this?
A.  Yes, indeed!  And the news is not as bad as many of us feared.  A little background may be helpful:
Back in 1965, during the term of Lyndon Johnson, Medicaid was created to provide health care and nursing home care to persons of modest means. Medicaid is the name most states give to what we call Medi-Cal in California. The law provided that, to qualify, an applicant could not have more than $2,000 in savings or other non-exempt assets. This low resource cap remained the rule throughout the country for more than 5 decades.  Then, in July, 2022, and with a budget surplus, California –alone among the states – increased that long standing rule resource “cap” to $130,000 for an individual and $65,000 for each additional household member ( up to 10), and in 2024, the state eliminated the Medi-Cal asset cap entirely!
However, because of a current budget shortfall, Governor Newsom recently proposed a return to the decades old resource cap of $2,000 in order to curb the state’s expenditures for Medi-Cal. But, many legislators, as well as interest groups supporting Californians of modest means, pushed back. The Governor and legislators then negotiated a compromise agreement: rather than return to the original (and decades old ) $2,000 resource cap, they agreed to reinstate the more liberal $130,000 resource cap for an individual (plus $65,000 for each additional household member, up to 10), beginning next year in 2026. So, the good news for seniors needing Medi-Cal: the new resource cap will not be as bad as it might have been!
A few bullet points:
1) Even when the new resource cap of $130K takes effect, there are still legal and ethical planning options that may yet be available for those who are still over that cap, in order to reduce  their resources to the new resource cap in order to qualify;
2) The resource cap only applies to Non-MAGI Medi-Cal beneficiaries (i.e. persons over age 65 or disabled and on Medicare), but not to younger individuals under age 65 on MAGI Medi-Cal, where income, namely “Modified Adjusted Gross Income” (“MAGI”), is the key requirement, and for whom assets are not considered at all, thanks to the Affordable Care Act signed into law by President Obama;
3) For those persons currently on Medi-Cal, the new resource cap will only affect them at either (a) the time of their annual renewal in 2026 , or (b) upon their reporting a change in circumstances in 2026; until then, their current eligibility continues;
4) Income received will count, if at all, toward Share of Cost (“Co-Pay”), as before;
5) For married couples or Registered Domestic Partners (“RDP’s”), if only one spouse needs Medi-Cal, the other spouse may be permitted to retain additional resources under what is termed the “Community Spouse Resource Allowance” under “Spousal Impoverishment” rules. That amount changes each year with inflation, and is expected to be at least $157,920 next year. So, a married couple or RDP’s could, together, then retain at least $130,000 + $157,920 = $287,920 in total non-exempt resources and still qualify one spouse for Medi-Cal;
6) The state has not yet issued rules about how transfer penalties will be applied, so be wary of gifting away assets in order to accelerate Medi-Cal eligibility;
7) The SSI rules will not change, so recipients who wish to preserve their SSI benefit must still keep their countable assets below $2,000 for an individual and $3,000 for a couple;
8) We anticipate more change once the full impact of the recent federal “Big Beautiful Bill” becomes effective, but we do not anticipate that those changes will be helpful to current and prospective Medi-Cal beneficiaries.
So, it is likely that new developments will be announced by Medi-Cal as we near the end of this year and the beginning of next year, so be alert and stay tuned.

Posts By: Gene Osofsky

Q. My husband and I would like to make wills, but I am concerned because he has been diagnosed with early-stage dementia. Legally, can he still make a will?

A. It depends, but very often the answer would be yes. Under the law, he must have what is called “testamentary capacity”. This means that at the time he signs a will he must understand what he is signing and the implications of making a will. Simply because he has been diagnosed with a form of mental illness or disease process, does not necessarily mean he lacks legal capacity to make a will.

Generally speaking, he would be considered mentally competent to make a will if: (1) he is able to understand that he is making a will, (2) he understands the nature and extent of his property, which means he understands what he owns, and (3) he knows and understands who his family relations are. Further, he would only need to meet these requirements at the time he signs his will. Some persons are more lucid at certain times during the day, and he should sign his will during those lucid periods.

A related question is whether he would also have sufficient capacity to make a trust. The question here is whether signing a trust requires a greater degree of capacity than signing a will. A California court addressed this question in a case called Anderson vs Hunt. In that case, a father made an amendment to his original trust, created years earlier, to leave a 60% portion of his estate to his longtime romantic partner, thereby reducing the share going to his three children. When the father died, his children contested the trust on the ground that their father lacked sufficient capacity, urging that the act of creating or amending a trust required a greater degree of capacity than signing a will. On appeal, the court upheld the trust amendments, concluding that they were rather simple in nature and therefore the law concerning the capacity to make a will should control. The lessons from the Anderson case: (1) if the creation, or modification, of a trust were drafted to be relatively simple and straightforward, then the requirement of capacity would likely be construed– if later challenged — under the more relaxed standard applicable to the making of wills;  (2) alternatively, for a person whose capacity were questionable, perhaps a will would be the better choice.

If there is concern that capacity may later be questioned, it would be helpful to have evidence of your husband’s capacity at the time he signs the will or a simple trust, such as a current letter from his physician attesting to his capacity. If there is reason to expect a later challenge, then a full evaluation by a forensic psychologist or neurologist would be the better choice. I might also recommend a video taped pre-signing interview conducted by the attorney preparing the will.

If your husband has sufficient capacity to meet the relaxed standards for making a will, or even a simple trust, I would urge him to do so as soon as convenient. Further, if he does not plan to disinherit any children, or to treat them differently in the overall division, the chance of a later contest is much reduced.

Posts By: Gene Osofsky

Q. My husband was just diagnosed with Alzheimer’s, but still seems to be generally okay. Are there legal steps we should take by way of planning for the future?

A.  Yes. Once you or loved one has been diagnosed with Alzheimer’s or other cognitive impairment, it is important to take action to get your affairs in order. Here is my short list of suggestions:

  1. Check Your Long-Term Care Insurance Policy. If you are lucky enough to have a long-term care insurance policy in place, check its benefit provisions, especially its “benefit triggers”.  Many policies are triggered by an inability to perform 2 out of 7 activities of daily living, i.e. eating, dressing, bathing, toileting, ambulating, transferring and continence.  Check for waiting periods, cost-of-living adjustments, lifetime caps, and the extent to which the policy covers care in the home.  Some policies also provide an option to increase benefits periodically without new medical examinations and, if so, consider opting for such benefit increases now, or as soon as you are eligible to do so.
  2. Check Your Life Insurance Policy for Early Benefit Options. Some life insurance policies offer an option to accelerate benefits under certain conditions, such as the need for long-term care. Check with your insurance company to see whether yours offers an Accelerated Death Benefit.
  3. Consider Applying for a Reverse Mortgage Line of Credit. If you or your spouse are over age 62, consider applying for a Reverse Mortgage (RM) line of credit to draw upon in the event of future need.  To qualify for a reverse mortgage, it is usually necessary for both spouses to receive counseling and sign numerous loan documents.  It is best to do this when both of you are able to fully participate in the process.  Also, just because you have a RM credit line, does not necessarily mean you have to draw upon it; instead, consider it as a stand-by source of emergency money for care expenses should the need later arise. As an alternative, and if you have children or other family members with sufficient means, consider a Private Reverse Mortgage, which would have many of the same features as a conventional RM, but without some of the drawbacks.
  4. Check Availability for Veterans Pension. If you or your spouse is a veteran, check with the VA to determine whether you might qualify for a veteran’s pension to help with care expenses.
  5. Review Beneficiary Designations. Review the beneficiary designations on insurance policies, IRA accounts, annuities, bank and brokerage accounts, and the like, to make sure they still conform to your wishes.  Many people designate beneficiaries when they initially set up their accounts and, over the years, neglect to review and update them as family circumstances change.
  6. Have Your Estate Planning Documents Reviewed. Make sure you have in place good quality estate planning documents, such as Advance Health Care Directives, Living Trust & Will, and Durable Powers of Attorney (“DPOA”). Most importantly, make sure that your documents have been designed to incorporate Medi-Cal planning powers: such powers may enable you to access a Medi-Cal subsidy to help pay for nursing home expenses without depleting a lifetime of savings. Also, consider making the DPOA immediately effective, rather than triggered only by a formal finding of incapacity.

Note: Sadly, I find that most estate planning documents that I am asked to review do not contain adequate Medi-Cal planning powers.  I suggest arranging for a review of your documents by an elder law attorney with special experience in public benefits planning. Revising your documents now to include these powers may help you finance the future cost of your husband’s nursing home care without placing your own financial security at risk.

Posts By: Gene Osofsky

Q. Our grandson is graduating college and we would like to get him a gift which recognizes the beginning of his adult life and career. We thought of something of a “legal” nature and wondered if you have any ideas?

A. Great thought and indeed I do. Why not arrange through your attorney to provide him a basic estate planning package, which would include an Advance Health Care Directive, a Durable Power Of Attorney and a Simple Will. The message, of course, is that he has now formally entered the world of adulthood and needs to take prudent steps to protect himself and his loved ones from the unexpected. He would also learn that these essential “life planning documents” need to be kept up-to-date as circumstances change, e.g. when he marries, has a child, purchases a home or acquires wealth.

Understandably, his focus will most likely be upon other things, such as deciding where he will live, beginning a new career, and perhaps finding a life partner. But your thoughtfulness can also teach him that these new adventures come with a certain responsibility. What if, for example, he were in an accident or suffered serious illness and became unable to manage his own affairs or direct his medical treatment. This happens!

In our own family, while our son was away at college, he suddenly had to undergo emergency surgery. I can assure you it was quite unsettling to have to scurry around to prepare and arrange the remote signing of an Advance Health Care Directive while, at the same time, make emergency travel plans to be with him. Fortunately, everything turned out fine, but one never knows.

While your grandson’s own parents may feel that, should anything happen, they can always make decisions for him, they may be surprised to learn that the law does not agree. Once he turned 18, he became an adult in the eyes of the law, and his parents no longer had the legal right to make decisions for him or direct his medical care. Instead, if suitable legal documents were not in place, they could only acquire that legal authority through a court ordered conservatorship, a public, cumbersome, time-consuming and expensive legal proceeding.

Your grandson need not worry that his parents will take over management of his life. The Advance Health Care Directive and the Durable Power Of Attorney can be “springing powers”. This means they would only spring to life and become operational when and if he became incapacitated and could not make those decisions for himself. Also, he need not feel obliged to name his parents as his agents. Instead, he could name whomever he wishes, such as his siblings or even a very good friend to serve as his agent or successor agent.

One of the other benefits of this gift would be his introduction to a professional with whom he might build a relationship, and who might be able to assist him over the years as he matures. You might also consider introducing him to your banker or stockbroker, help him establish a contributory IRA and discover the wonders of compound interest. Indeed, you might be able to show him how– with regular contributions– he could be a millionaire by the time he is your age.