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Irvine, CA Estate Planning Blog

Friday, April 12, 2019

Why Does Probate Take So Long?

Probate can be easily avoided, but most estates are dragged through the process.  Why?  Many people fail to create an estate plan, so probate is required.  And - others plan with just a Will, so probate is required.  As a result, assets end up at the mercy of a probate judge, open to public scrutiny, and delayed passing to beneficiaries.


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Friday, April 12, 2019

What is the Medicaid Lookback Period?

Medicaid is a healthcare program jointly operated by the individual states and the federal government. Medicaid is designed to help individuals with limited income and resources pay for healthcare costs including nursing home care, assisted living, or in-home care. However, qualifying for Medicaid can be difficult. While eligibility is state-dependent, there are generally four key requirements: (1) you must be 65 years of age or older, permanently disabled, or otherwise qualify depending on your specific state’s class requirements, (2) you must be a resident of the state in which you are applying, and either a U.S. citizen, permanent resident, or legal alien, (3) your income must be within your state’s income limitations, and (4) your assets must be within your state’s asset limitations.

To help individuals qualify for much-needed Medicaid coverage, multiple strategies exist to reduce one’s income and assets to the state threshold without adversely affecting the individual’s life. These include gifting assets to family and friends, transferring assets to a spouse, and investing in exempt assets (exempt assets are assets that do not count as “assets” for Medicaid purposes – most states allow certain home values to be exempt).


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Monday, April 1, 2019

The Effects of Gifts on Medicaid Planning

Medicaid is a healthcare program designed to help individuals with limited income and assets afford needed medical care. Importantly, Medicaid covers long-term healthcare services such as nursing home costs and costs for at-home personal healthcare. Because Medicaid is intended to benefit those with limited income and assets, there are strict eligibility requirements based on income and assets. Although Medicaid is a federal creation, it is jointly operated by the federal and state governments. As a result, the specific income and asset eligibility requirements for each state are different and you should consult with a Medicaid planning attorney in your area for specific eligibility advice.


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Friday, March 29, 2019

Reverse Mortgages and Older Americans

Perhaps you’ve seen the catchy commercials for a reverse mortgage stating that many older Americans are struggling to get by because they currently do not have enough in savings and retirement funds to manage their expenses, but yet many have equity in their homes. To solve the financial difficulties, the commercial recommends using a reverse mortgage to access that equity.

Suppose you’re one of the many individuals such commercials are targeting. You’re struggling financially but have significant equity in your home – perhaps you paid off your mortgage ten years ago. How exactly does a reverse mortgage help you?

At a basic level, a reverse mortgage is a loan from a bank secured by your house – just like a regular mortgage. The primary difference is that for a reverse mortgage, you receive a lump sum payment or continuous payments from the bank and do not make payments on the principal balance. Whereas in a regular mortgage you take out a loan and then make monthly payments, a reverse mortgage doesn’t require any payments to be made until a specified event occurs, such as your death, the sale of the property, or another event identified in the loan agreement.


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Friday, March 15, 2019

Preventing Falls in the Home

Unfortunately, as we get older, falls become more serious as they can result in health complications such as fractured arms or hips, internal bleeding, and head trauma. To minimize your risk of falling while at home, consider taking the following steps.

Add assistive devices

 Assistive devices can be installed throughout your residence to provide for better support in day-to-day activities. Some examples include:

  • A handrail for the stairs provides extra support when going up and down the stairs
  • Handrails in the shower and bathtub provide support in an area that is notoriously easy to slip and fall
  • A seat in the shower or bathtub reduces your time standing and helps to reduce the risk of slipping and falling
  • A handheld showerhead can be combined with a shower seat to allow you to bathe while sitting down, significantly reducing your time standing in the shower or tub

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Friday, March 1, 2019

Legal Issues of Caring for Parents with Dementia

Ever increasing life expectancies mean we get to spend more time with our loved ones, but it also means facing greater health problems as we age. One of the most challenging health issues for aging adults is dementia. Dementia is not a specific disease, but rather describes a group of symptoms that are associated with a decline in memory and cognitive function. In severe cases, those suffering from dementia may not remember their family members, or who they are, and may generally not be able to continue to live independently. As a result, many families take on a caregiver role for parents who suffer dementia. The following legal issues should be considered by families when caring for parents with dementia at any stage:


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Tuesday, February 26, 2019

A Brief Introduction to End of Life Legal Planning

While being one of the most important aspects of your later stages in life, end of life legal planning is often the hardest to deal with. The issue is a mix of emotions, finance, and law – a combination that will bring anxiety to anyone. Nonetheless, being prepared for the unexpected, and eventually the expected, is exceptionally important. End of life legal planning can be split into two primary categories: healthcare and financial.


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Friday, February 15, 2019

4 Reasons Everyone Needs an Estate Plan

Many people are under the misconception that estate plans are only necessary for those with substantial wealth. In fact, estate plans are important for everyone who wants to plan for the future. For those unfamiliar with the concept, an estate plan coordinates the distribution of your assets upon your death. Without an estate plan, your estate (assets) will go through the probate system, regardless of how much or how little you have. There are many reasons that everyone needs an estate plan, but the top reasons are:


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Friday, February 1, 2019

What is the Older Americans Act?

The Older Americans Act was signed into law on July 19, 1965 by President Lyndon B. Johnson to address economic shortcomings for those in their later years of life. While focused on aiding Americans who are 60 years of age and older, the Older Americans Act has had far reaching implications affecting Americans of all ages. The Older Americans Act is a piece of umbrella legislation that introduced many new programs, agencies, and centers, including the Aging and Disability Resource Centers, the National Family Caregiver Support Program, and the Administration on Aging. The Older Americans Act also brought in many new forms of funding for services required by seniors to retain their independence, such as transportation services, education services, and legal aid. Notably, the Older Americans Act was brought in during 1965, the year of significant change in social welfare programs in the United States – 1965 also seeing Medicaid and Medicare coming into existence.

How is the Older Americans Act Funded?

The Older Americans Act is funded through discretionary funding at the federal level. For each fiscal year, the legislature must allocate funding to the Older Americans Act -- funding peaked in 2010 at $2.33 billion and has slightly decreased since. Because funding has not kept up with the increasing demands placed on the program by an aging population, government agencies stuggle to provide services. Therefore, seniors who rely on the programs under the Older Americans Act face long waiting times and waitlists to receive the services.


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Friday, January 18, 2019

Removing a Trustee

Trustees are responsible for administering a trust for the benefit of the beneficiaries. In some instances, multiple trustees may administer a trust as co-trustees. Occasionally, issues arise causing the beneficiaries of a trust or the co-trustees to pursue removal of a trustee. These issues could be general unhappiness with trust accounting or failure of the trustee or co-trustee to provide information when requested. In short, the grantor (creator) of the trust, co-trustees, the trust beneficiaries,  and the  probate court have the ability to remove a trustee

Reasons a Trustee Can Be Removed

The reasons for removal of a trustee depend upon the trust documents and applicable state law. Generally, a trustee can be removed for:

  • Incapacity – Trustees may be removed if they become incapacitated, whether due to medical issues or self-inflicted incapacity due to drug and alcohol abuse.
  • Violating the terms of the trust – Trustees may be removed if they violate the terms of the trust, such as not consulting with a co-trustee in a decision.
  • Failure to account or report as required – Trustees have an obligation to account for trust activity and report as required by the beneficiaries. Failure to accurately report the requested information is grounds for removal.
  • Self-dealing – Trustees owe beneficiaries fiduciary duties which require them to always act in the best interest of the trust and the beneficiary. Selling trust property to one’s self at a discount constitutes self-dealing and is grounds for removal.
  • Theft of trust property – Due to the fiduciary duties described above, theft of trust property is a violation of those fiduciary duties and is grounds for removal.

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Friday, January 11, 2019

An Overview of Retirement Plan Options

Retirement planning is essential given ever-increasing life expectancies in the United States. Unfortunately, many Americans fail to save adequate amounts to make it through retirement. Often, individuals believe that they will be fine on Social Security. However, Social Security is only designed to compensate for 40% of your income; Social Security is designed to be an income supplement rather than a sole income source. To make matters worse, workers tend to overestimate how late into their life they will be able to work. Inadequate savings and an inability to work produce an exceptionally stressful retirement. Remember, it’s never too late to start saving.

401(k) Plans

401(k) plans are employer-sponsored retirement plans that offer tax advantages to investing. When investing through a 401(k) plan, you will declare how much of your paycheck you would like to contribute to the 401(k). The employer will then contribute the designated amount before taxes to your 401(k) account. The contributions made to your 401(k) account are non-taxable meaning that your taxable income is decreased by the amount contributed. As of 2018, the maximum amount that a taxpayer can contribute to a 401(k) account is $18,500. The tax advantages of the 401(k) plan mean that if the taxpayer earns $80,000 annually in salary and contributes $10,000 to his or her 401(k) plan, then the taxpayer’s taxable income for that year would be decreased to $70,000. When the taxpayer begins to withdraw from the 401(k) account, those withdrawals will be treated as taxable income.

However, money contributed to a 401(k) plan may not be withdrawn before the age of 59.5 without incurring a penalty unless certain exceptions apply. Unfortunately, not all employers offer 401(k) plans. If your employer doesn’t offer a 401(k) program, make sure to take advantage of other retirement plan options such as a Traditional IRA or a Roth IRA.

Traditional and Roth IRA

The Traditional IRA functions very similar to a 401(k) plan except that it does not have to be employer-sponsored. This means that if your employer doesn’t offer a 401(k), or you’d like to contribute more than the 401(k) contribution limit, you can set up a Traditional IRA. From a tax perspective, a Traditional IRA functions the same as a 401(k): the amounts contributed are not taxed and distributions are taxed.  However, unlike a 401(k), the contributions to your Traditional IRA are made by you. As a result, whatever you contribute to your Traditional IRA will then be deducted from your taxes when you file.


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Law Offices Of Michael J. Wittick, A Professional Law Corporation is located in Irvine, CA and serves clients with estate and wealth preservation matters throughout Irvine, Lake Forest, Laguna Woods, Laguna Hills, Foothill Ranch, Tustin, Aliso Viejo and the surrounding areas.



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