My mother has a degenerative brain disorder that has caused early dementia, how can we can get her the help she needs either in her own home full time or in a retirement home?

Dear Len & Rosie,

My mother is very young, only 60 years old, but she has a degenerative brain disorder that has caused early dementia. She lives in southern California, so from long distance, we have tried to get her to agree to having help in her home. She is resistant to this idea. She no longer sees her neurologist because nothing can be done for her. Right now, she doesn’t even have a doctor. My sister does have an advance health care directive our mother signed a few years ago.  How can we can get her the help she needs either in her own home full time or in a retirement home?

Karen

Dear Karen,

There’s not a lot that you can for your mother against her will. Even if her advance health care directive gives your sister immediate authority over medical decisions, your mother has the right to make her own choices, even bad choices, concerning her medical treatment. Your sister can take over if and when your mother’s mental condition deteriorates to the point where she can no longer care for herself. But until that happens, your mother remains in control of her own life and she has the right to make unwise decisions.

Many people suffering from early dementia or Alzheimer’s disease confront their condition only reluctantly, when it becomes obvious to all concerned that they need day-to-day help. Since your mother legally still has mental capacity, you cannot just barge in and take over. You need to calmly persuade her that she needs help, and that she will have more independence in her life if she accepts help now, rather than stubbornly living alone until injury or self-neglect forces her to leave her home.

If your mother is willing to help you help herself, she should update her estate planning documents by giving you or your sister a durable general power of attorney in addition to her advance health care directive. If she has a revocable trust, it is probably a good idea for her to resign as trustee and let her children manage it. If she does not have a trust, she ought to create one now.

Your mother should also consider Medi-Cal planning. If her condition is progressive, there may come a time when your mother is physically and mentally incapable of living in her own home, or even in an assisted living facility. It is a difficult issue to confront, but your mother may eventually need nursing home care. By acting now, she can help shelter her assets from expensive nursing home bills. Remember that the goal here is not for you to take over your mother’s finances and ship her off to a nursing home for her own good. But you do need the tools to provide care for your mother to the extent that she needs it.

If she refuses assistance, then you may have to wait until she is clearly incapacitated. At that time, you can act on her behalf if you have a durable power of attorney. If you don’t, you may have to file for a conservatorship over your mother, which will get the court involved making things more complicated to deal with than if your mother has an estate plan.

Len & Rosie

How a Trust works

Dear Readers,

You may already have a trust, but it’s very important to understand that once you make a trust, the job is only half done. For your trust to work as advertised, it must be funded with your assets. Today’s column is about doing just that. As a rule of thumb, everything goes into the trust, with a few exceptions.

First, keep your day-to-day checking account outside of the trust and add your successor trustee to the title of the account as a joint owner. If you are married, keep the account in both of your names and wait to add someone to the account when either of you starts slowing down. You know, when you no longer read your mail, pay your bills, and read this column.

If you do not like the idea of adding someone to your checking account, then maybe you need to reconsider whether or not that person should be named as successor trustee. If you can’t trust someone now, don’t you dare trust that person when your incapacitated or dead.

Second, don’t bother transferring into the trust your automobiles and boats registered with the DMV, or modular homes registered with the Department of Housing. They do not count against the $150,000 limit that triggers a requirement for probate administration in California, so there is no real need to do this. These assets can be collected 40 days or more after your death using DMV Form REG-5 or a Small Estate Declaration under Probate Code section 13101.

Third, and perhaps most importantly, you cannot transfer to your trust retirement accounts such as IRA’s, 401(k)’s, 457(b)’s and the like. These are tax-deferred retirement accounts. Transferring one to a trust means cashing it in and paying all that income tax. In addition, you probably should not name your trust as a retirement account beneficiary unless your lawyer advises you to do so. Instead, name your children or other beneficiaries directly, unless you have a minor or disabled beneficiary who should not or cannot have direct access to the money upon your death.

Incidentally, life insurance and annuities can go either way. You can name the trust as beneficiary, or name beneficiaries directly. Sometimes it’s good for them to pay into your trust, to give the trustee more liquid cash while consolidating and selling those of your assets that will be sold.

Other than that, everything should be in the trust. Your lawyer should prepare and record deeds conveying your California real properties into the trust. The rest is up to you. Most lawyers provide their clients with a fancy three-ring binder with the law firm’s name emblazoned in big letters (We do this too). Use that binder as a tool. When you visit your bank or broker to fund your trust, take the trust binder with you. It should have everything you need, and financial institutions are well aware of how to title accounts in a trust, although they will abbreviate the name of the trust. It’s OK. They know what they are doing.

If you do all of this, and fund your trust correctly, then when you pass your successor trustee will have an easier job to do, and it will save your family money.