The Kenwood Press|
Breaking a Trust
Dear Len & Rosie,
Dear Len & Rosie,
My mom doesnít have a will yet but weíre encouraging her to make one. She has a draft will that leaves her home to all three children, but I have some questions. First, the house is under my motherís name and my brotherís name. Is it true that he will get the house automatically on our motherís death? Also, my other brother is autistic and will have special needs. How does my mom work that language into her will?
We hope that your mother isnít trying to make her own will. Doing your own estate planning works for some people, but you should never try it if there is anything about your estate that is out of the ordinary. Your motherís proposed will wonít work the way she wants, and itís not what your disabled brother needs.
If your motherís home is in joint tenancy with your brother, then when your mother passes away, your brother will own 100% of the home outside of probate, regardless of what your motherís will says. Wills do not have any effect on assets not subject to probate administration, such as assets held in joint tenancy and accounts with pay-on-death beneficiaries. If your motherís home is to pass under the terms of her will, either your brother has to give it back to her or he has to pass away first.
As for your disabled brother, your mother can create problems for him if he inherits a share of her estate outright. If your brother collects Supplemental Security Income (SSI) or Medi-Cal benefits, then he can have only $2,000 in countable assets. An inheritance from his mother can cause him to lose medical benefits that he relies on today and will need in the future.
Your mother has three planning alternatives for your disabled brother. She can simply give him his share outright, and cause him to lose his benefits. She could also disinherit him and rely on you and your other brother to step up and provide for your autistic brotherís needs. Or she can create a special needs trust for his benefit.
A special needs trust isnít for do-it-yourselfers. These trusts are designed to follow specific loopholes in federal entitlement regulations to allow an inheritance to be held for a disabled person without causing a loss of public benefits. Your mother should meet with an estate planning attorney and create an estate plan that wonít make things more difficult for her children down the road.
Len & Rosie
Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at (707) 996-4505, or on the Internet at www.lentillem.com. Len also answers legal questions each weekday, 12-12:45 p.m., and Sundays, 4-7 p.m. on KGO Radio 810 AM.