Estate Planning Preferable to the Crisis Before Dying

The difference between the theory of estate planning well in advance and the reality of dealing with a mother, father, sister, brother or child dying can’t be measured in money or emotion. It’s not until you have to put that plan into effect that you begin to understand its absolute necessity.

The only thing worse is to get to those days of a sudden emergency that eventually causes a death only to find out that the estate plan isn’t valid, either because it doesn’t represent the person’s last wishes or because events have changed in the life of the trustee/testator that makes the old revocable trust or last will and testament invalid.

This not only would cause you to revoke the old revocable trust and transfer the real estate in that trust back to the original trustee, but then to create a new revocable trust or will while the trustee/testator is still alive and competent — making sure it is accomplished before the trustor/trustee dies.

This requires extraordinary haste in drawing up the legalities necessary to perform this documentary feat, which means it’s never going to be cheap — unless someone in the family is an estate planning attorney. It begins with the durable power of attorney to manage personal financial affairs meant to aid those who can’t make it to the bank.

As we have discussed, if the bank doesn’t know you, it will only provoke an argument as to what the trustor wants done. Normally the resolve can end with the bank manager who has personally heard it from the trustor’s mouth. But some banks, such as the Bank of America in one known incident, will give you only the fax number to their legal department to send the document and letter of explanation, and you don’t get called back without more diligence until weeks later.

But putting the legal documents aside, the even bigger challenge is having to deal with the social services such as Social Security, Medicare and Medi-Cal, which hopefully have been put in place, and will be if the patient is 65 years old or older.

Those first two federal agencies are a godsend when it comes to the aid of the exorbitant cost of getting your loved one the vital surgeries that must be performed immediately to save the patient’s life. There will be no three weeks to wait for Anthem Blue Shield to give the OK, presuming the patient is lucky enough to have insurance.

If the patient is in the hospital longer than 72 hours, Medicare also will help pick up a portion of the tab for 24-hour health care at the rehabilitation center. But the margin on the balances of the medical bills during this period, which can be months, are expected to be paid by the patient —or, depending on their financial status, it will have to come from your pocket.

However, there is the third resource, Medi-Cal, if the patient is indigent, meaning he doesn’t have more than $2,000 in cash or doesn’t have private insurance to pick up the “co-pay” after Medicare has paid its share of the medical cost.

Medi-Cal is California’s version of the federal Medicaid program, and it must be approached very cautiously because California’s rule and regulations as to which applicants can qualify for benefits conflicts with many of the rules regarding Social Security’s Medicare. In many cases, it will turn out that you can’t qualify for both. If you have planned ahead and do qualify for both, then you have the best insurance available.

But for many who could use it, the mere filling out of the application for medical insurance is so daunting a task, fraught with the requirement of verifying every asset regarding its cost and value, along with filling out the statement of facts by stating just the right things, that clients would rather get an ulcer over starving to death than getting one filling out the application form for Medi-Cal.

This short article is not capable of walking a reader through the complications and review system that is required every year. The best advice is to plan this insurance resource well in advance of the five-year “look-back” by the agency at the time the application is filed to determine when you would be eligible.

Other than that, keep living a healthy lifestyle of exercise and nutrition, and good luck.