Medi-Cal Planning Preserves Homes for Children

Aging is inevitable, but lucky for us, medical technology continues to improve, which has increased our life expectancy. As we live longer, long-term medical care costs continue to raise. The super wealthy in America can easily pay for their long-term medical costs and thus the focus of their estate planning is on how to minimize their estate taxes because their estate will be taxed at a rate of 40% of the amount that is over the federal estate tax exemption of $5.45 million per person.

However, for most middle class Americans, one of the major ways of financing their long-term medical costs is through Medi-Cal planning because for them to pay for their own long-term medical care would deplete their lifetime savings.

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Homeowners: 2016 New CA Law to Protect Your Home from Probate

In California, there are a variety of ways to hold title to your home that will dictate who will become the new owner of your home when you die. Starting January 1, 2016, California homeowners can add a new way of holding title to their homes called the "Revocable Transfer on Death Deed" (TOD deed). TOD deed is a non-probate deed whereby you as the homeowner may deed your home to a named beneficiary and the transfer becomes operative on your death but will remain revocable until you die.

California Assembly Bill 139 created the "Revocable Transfer on Death Deed" (TOD deed) as an alternative "poor man’s" estate planning instrument to avoid probate without having a trust. It was approved on September 21, 2015 and will take effect on January 1, 2016 and expires on January 1, 2021. The TOD deed covers only one to four residential dwelling units, a condominium or agricultural land of 40 acres or less with a single-family residence. T

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Most Famous Tax Loophole for Real Estate Owners

Real estate owners buy real estate hoping to accumulate and build wealth for themselves and their families. However, some real estate owners are not aware of the biggest tax loophole when it comes to passing their real estate wealth on to their families.

The most famous tax loophole for real estate owners is the “stepped-up basis”. When you inherit a house, the current IRS tax code gives you a stepped-up basis in cost. Your stepped-up basis is the market value on the date of your benefactor’s death. This taxpayer-friendly rule allows heirs to sell the house they received and owe nothing to the IRS.

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Real Estate Asset Protection

Did you know that you can create legal entities that you can use to protect you real estate assets? This article is a summary of the common ways of vesting title in legal entities that real estate investors use for asset protection.

Three legal entities that you can create are C-corporation, S-Corporation, and Limited Liability Company (LLC). Both C-corporation and S-corporation are formed by filing legal documents with the Secretary of State of California. Both of these corporations are distinct entities from the owners and thus shield the owner-shareholder(s) from personal liabilities stemming from the corporations. The difference is that the S-corporation is able to be taxed directly to the shareholders and avoids the double taxation that a C-corporation brings.

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How Medi-Cal Can Be Dangerous to Your Home?

Many homeowners who are under the California Medi-Cal health plan are concerned about whether their homes will be taken away from their children after their deaths because they used Medi-Cal during their lives. Although, California is one of the most liberal states out of the 50 states, there some traps for the unwary to consider. Therefore, read on because one day you or your loved one might need Medi-cal. Below are some common questions that I have assembled so that homeowners can make wise and informed decisions when applying for Medi-Cal.

What is Medi-Cal?

Medi-Cal is the short name for “California Medical Assistance Program”. Medi-Cal is California’s version of Medicaid, which is the Federal Health Insurance Program for people and families with low incomes and resources. California participates in Medicaid under the name Medi-Cal.

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