Articles Posted in ELDER LAW

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Many elderly persons wish to remain in their own homes, but lack the financial means to do so. One option for such individuals is to take out what is known as a “home equity conversion mortgage,” commonly referred to as a “reverse mortgage.” Whereas a conventional mortgage requires the borrower to make monthly payments until the loan is repaid, with a reverse mortgage, all payments are deferred until the borrower dies or decides to sell the property.

Most reverse mortgages are regulated and insured by the U.S. Department of Housing and Urban Development (HUD). Under HUD rules, any person over 62 who resides in the house they own may qualify for a reverse mortgage. HUD maintains an online directory of qualified reverse mortgage counselors to advise individuals on the best way to obtain such loans.

Reverse Mortgages and Estate Planning

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During your lifetime, it may be necessary for a court to appoint a conservator to oversee your affairs when you are no longer able to do so. A conservatorship can apply to both a person-i.e., someone to make healthcare decisions for you-and to the property contained within your estate. While you can nominate a conservator as part of your estate plan, the final decision rests with a California probate court. You can also sign a power of attorney granting another person control over your financial affairs, without the need for a separate court order.

California courts will look at whether a potential conservator exercised “undue influence” over a person. For example, an unscrupulous individual might use a conservatorship as a means of using an elderly relative’s assets for their personal gain. Similarly, other persons or groups with an interest in a person’s estate might use the conservatorship process to manipulate the situation for their own advantage.

In re Conservatorship of Person and Estate of Melanson

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On September 3, a California appeals court issued a landmark decision on the subject of financial abuse of the elderly. California maintains strict laws designed to protect persons aged 65 and above, who are more susceptible to fraud. In this case, the appeals court found the law could apply to potentially harmful financial transactions not yet completed.

Bounds v. Superior Court of Los Angeles County

This case involves an unusual legal remedy known as a writ of mandamus. In California, a mandamus proceeding is brought by a petitioner against a lower court, and the defendant or respondent is designated the “real party in interest.” If granted, the writ is a command issued by the appellate court to the superior court.

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An estate is not only responsible for distributing property after your death. It must also pay any valid debts to the extent your assets allow. Medical debts are a common expense most estates must pay. And if the deceased received health care benefits from the California Medical Assistance Program (Medi-Cal), the estate may have to reimburse the State of California for some of those expenses.

Estate Recovery

This is known as estate recovery. Medi-Cal is part of the federal Medicaid program. Medicaid rules require states to try and recoup the costs of certain long-term care from the estates of now-deceased recipients. California law goes even further and seeks recovery of costs for most covered services provided to people ages 55 and over. The Affordable Care Act (aka “Obamacare”) prohibits California from conducting estate recovery if the beneficiary was under 55 and received coverage under the low-income expansion to Medicaid and Medi-Cal.

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In dealing with an elderly person who suffers from dementia or who otherwise loses the capacity to make decisions, it may be necessary to create a conservatorship. This occurs when a probate court appoints someone to act as the disabled person’s agent in making legal, financial and healthcare decisions. Careful estate planning should include a power of attorney that nominates a guardian or conservator if either becomes necessary.

Unfortunately, disputes may arise between family members over how to handle a conservatorship. A recent California case-which actually involves courts in two different states-helps illustrate the problems than can arise from a conservatorship. This case is discussed here for informational purposes only, and should not be construed as an authoritative statement of California law on the subject.

Owens v. Thayer

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Marriage may be sacred, but under California law, one spouse cannot take advantage of the other when it comes to estate planning. Spouses have a fiduciary duty to one another, and when one party exerts undue influence over the other, the courts may intervene. Recently, a California appeals court upheld a lower court’s decision to invalidate part of a deceased man’s trust after finding his wife exercised such undue influence.

Lintz v. Lintz

Robert Lintz was a real estate developer worth millions. He was married several times, including twice to his final spouse, Lois Lynne Lintz. Shortly after their second marriage in 2005, Robert Lintz amended one of his trusts-which held his northern California properties-to give his wife a one-half share upon his death. The trust was amended several more times between 2005 and Robert Lintz’s death in 2009, each time increasing Lois Lintz’s share and decreasing the amount left to Lintz’s children from his prior marriages.

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Proper estate planning is key to protecting your assets from those who might take advantage of you, both during and after your lifetime. One all-too-common situation faced by individuals is the presence of home caregivers who might take advantage of their elderly charges. In some cases, it may fall to the executor or trustee named in the person’s estate planning documents to recover money improperly obtained by such caregivers and their associates.

Lintz v. Ramirez

A recent California case dealt with just such a situation. This case is discussed here as an illustration only and should not be considered a definitive statement of California law. The deceased in this case was Ruth Moynes, who died in 2006 at the age of 100. Moynes did not appear to have any blood relatives, but she was close with the family of Lynn Lintz. In 1994, Moynes executed an estate plan that included a living trust and what’s known as a “pour-over” will. Upon her death, any assets remaining in Moynes’ probate estate would be automatically transferred to the trust. Lintz was named executor of the will and successor trustee and sole beneficiary of the trust.

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Estate planning is supposed to prevent arguments among family members after you pass away. But even the best-laid plans are subject to changes in family relationships. One recent California appeals court decision highlights what can go wrong when a deteriorating marriage intersects with inheritance.

Please note this case is described here for informational purposes only and should not be construed as legal advice. The subject of this case is a home in Alameda County owned by the late Henry Rodriguez. In the late 1990s, Rodriguez asked his niece, Mirian Duncan, and her husband Edward to move into his home. Rodriguez had recently underwent heart surgery. He wanted the Duncans to help care for him and his home. In exchange, he promised to give them the house after he died this is known as a care contract.

To that end, Rodriguez executed a revocable living trust in 1998. Rodriguez transferred his house into the trust and directed that upon his death, the property would go to the Duncans “equally, as their joint and/or marital property.” The Duncans held up their part of the deal, moving into the home and caring for Rodriguez until his death in 2007.

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When an elderly parent becomes unable to make his or her own decisions regarding finances and medical care, an adult child or other person must assume the role of conservator. Through proper estate planning, a person can nominate, in advance, a conservator to act should the need arise. In the absence of such planning, however, it often falls to a probate judge to determine which person will act in the conservatee’s best interests.

Under California law, if a person does not nominate his or her own conservator, the probate court has the “sole discretion” to appoint one. The court must give preference, in descending order, to the person’s (1) spouse or domestic partner, (2) adult child, (3) parent, (4) sibling, or (5) any other person who offers to serve as conservator. When two or more people seek to act as a conservator, the court will follow the preference order only if the judge determines each petitioner is “equally qualified.”

Sibling Disagreement Leads to Outside Intervention

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When an adult can no longer manage his or her own affairs, a conservatorship may be necessary. If your California estate planning does not include a general durable power of attorney or advance healthcare directive naming agents to act in the event of your incapacity, a probate court may name an agent called a conservator to act for you. In some cases, a court may name two separate conservators–one for your person and another for your property or estate.

Conflicts can arise when multiple conservators disagree over what’s in the best interest of the conservatee. The California Court of Appeals recently had to settle one such dispute, which is discussed here purely for informational and illustrative purposes and should not be construed as a statement of the law. The argument arose over what to do with the property of an elderly man who was longer living at home.

Conservator of the Estate vs. Conservator of the Person

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