Special Needs Estate Planning, with New York Attorney Jackie Cara

0:00 Okay, so welcome to Probate Weekly and you know failing to plan is planning to fail. One of the areas that I saw when I went to court every day up until co was just the nightmare in particular of special needs and guardianships and conservatorships in particular probate that when you don't plan ahead that area I think where you have the most vulnerable and maybe needy clients are the ones that suffer the most because they're just unable to really handle that. And I'm excited today to have an attorney focuses a lot on estate planning for special needs to avoid that scenario. Jackie Cara. Jackie, thank you for joining us today. Thanks for having me, Bill. What got you into special needs estate planning in particular? It's a pretty narrow niche of the niche of estates and trust and then estate planning and then special needs estate planning. Obviously, a niche of a niche of a niche. What got you into that? So, a number of years ago, I was planning on having one baby and I had two and they were born prematurely and they had a lot of special needs. And so I went from being a trial attorney and in court every day to, you know, a mom with two children who had very special concerns and a mom who was worried about the future and how we were going to support these two children and the needs they might have that might exceed the needs of your average child. So if you mind talk a little bit about what that is because I think for those of us who don't have special needs children, we're not really exposed to it that much. I have a good friend who actually is a attorney specializing in this area. So I have a chance to look at it a little bit as a business point of view. But what are some of the major issues that you have to deal with that are unique in with special needs cases? So in special needs cases, what we want to make sure we do is first of all we want to make sure there's sufficient funds available for a child who may not be able to live independently in the future. For a child who may need supplemental assets available to pay for extra help in the home extra services, companion

2:06 Services and things like that when the parents are gone or no longer able to take care of them. Right? So financing the future of these children becomes a very big concern of most of my clients. And the other big concern is when special needs children and or going into special needs adults, people who are on disability, for example, people who are receiving governmental benefits for their housing, their dayhab, their educational purposes and their home care or their attendance. They can lose all those benefits if they inherit money directly. So for those families, we want to make sure that we are not only finding strategies to provide funding for those family members, but also strategies to make sure that money is secured and doesn't interfere in the benefits that they need every day. So listen, there's a few things there. So, first off, just in general, I don't think not you know, I'm only aware of it because of my friends that the simple process of who's going to write the rent check or the mortgage check or the property tax check or the insurance check, who's just going to do that can become monumental when the parents are longer around. Right. Exactly. Simple things that otherwise are normal everyday activities. And you say, "Well, it's not such a big deal. Writing a check." Yeah. You have auto payment on account. Well, if that account changes, the bank closes, somebody has to reorient the whole process all over again, right? And so those are where who's the one who steps in and makes that assessment. Who's the one who's control of those decisions at that point? So, it depends. There are a few things that we can do. For a lot of parents with special needs children, when the children turn 18, they move for guardianship of the child. And they do that so they can continue providing the same level of support they're able to provide as parents. If there's a guardianship in place and a parent becomes incapacitated or is no longer able to act as a guardian, they can name a successor guardian. Sometimes a sibling or another family member, somebody like that, and that person would have the authority to pay the bills, apply for governmental benefits, make sure housing stays secure, and all

4:11 Of those things you think of parents doing for their children. So, that's one way to deal with that. So theoretically they if you set up it properly with a guardianship they can provide all the same kind of oversight administrative support that say a parent might for a child exactly or similar and that's a process where if they're a conservatorship when they're children automatically though you have to reapply for guardianship. Now you're in New York just to be to clarify but I believe that's true also in California. I'm not an attorney, but you have to think about that process and there's a transition be ready for that transition process. Correct. Exactly. And a lot of parents don't think about that like all of us special needs children or no we don't like to accept when the kids are growing older and no longer need us or we're no longer authorized to help them in certain areas. So moving for guardianship when a child turns 18 is very important to allow a parent to continue supporting them the way they need to be supported. Now, call me silly, but it seems to me sometimes children don't want parents to have the control that they need to have. And I can imagine, you know, with a child, they don't have capacity to make those decisions. I imagine in some cases, some of these adults don't similly don't have the capacity. They may not want guardianship, but does the court still look at what's their best interest and will consider that in the process? Yes. So the reason I like the area of guardianship so much is because it's sort of a unique area of law where everybody involved is really most interested in that person's best interests. So regardless of what hat you're wearing in the proceedings, lots of people involved. Everybody is trying to figure out what this person needs to be best supported and what is in line with their functional limitations. So what's right for one person is not right for somebody else.

6:01 And that's one of the most the most interesting things about guardianship. Now you say that everybody is looking off the best interest of the child now the subject of guardianship adult. But my experience is you throw money in and the whole game changes. You're exactly right. And that rule applies to everything. Yes. You throw money in the mix and everything changes. So, if you put some money in the mix, regardless of who the guardianship's about, you know, up all the time with older people who haven't planned, when there's money in the mix, now there are new people crawling out of the woodwork with an interest in the proceeding and there might be arguments among family members about how the money should be managed and where it should be managed. And money does add a whole new dynamic to any kind of proceeding. And I've seen, you know, expense reports reviewed in court down to the Okay, we went to I remember one Arby's roast beef. I don't know why one stands out where the I forgot the term for the person who I guess the guardian versus the who's the person that's being guardianed. Is that the that's the subject or the it's the incapacitated person here in New York. There. There you go. Incapacitated person. And the guardian and the guardian took them on the way to some doctor's appointment on the way. Stopped off at Arby's roast beef and or you know got a sandwich, a coke and fries or something and the attorney was objecting that the guardian sandwich was included and the guardian say well yeah but it was all day cuz we had to go like an hour and a half and this and a waiting and you know if it's more than four hours you're allowed to have the meal but if you're not you know it's a routine you don't get the meal paid for and they spent 15 minutes arguing over I think was this like a $6 expense of a sandwich and a fry of coke. I'm thinking, "Oh my gosh, between these attorneys and the judges time, this costing hundreds of dollars." And it does sometimes seem to me that when there's money involved, these things degrade into like it's kind of the equivalent of the Russian Ukrainian war.

7:59 What side you're on, there's people dying and it's like a meat grinder of fighting going on. It seems to me that often these guardianships and conserips become kind of like that when there's a lot of money involved. Yeah, it can definitely happen. I had a an ice cream case. There's an ice cream case in New York. Sure. The guardian would So the incapacitated person was an older person who really didn't have any family and the guardian was really their family. And the guardian would take them every Friday for ice cream. But they the guardian who was an attorney would drive, you know, two hours to wherever the person was and then take them out for the day. And that would require an aid and a van and you know all of these things to get an ice cream cone. And when those bills for the ice cream cone were submitted, you know, they weren't $5 bills for an ice cream cone. They were large invoices for an entire day getting an ice cream cone because this was the outing for the, you know, incapacitated person. And there were hearings and hearings over the ice cream the ice cream escapade. But yes, exactly what you're talking about. And on one side, in fairness, the subject enjoys ice cream. It's nice to go out. And the other side, it's a very expensive process that anybody who's that might come out of their pocket may object to. And so, it's one of those things where you have a battle set up. And then if you can use this to prove the other one's misspending money and there's millions of dollars involved, all the more reason it becomes like a civil war almost.

9:31 Exactly. That's when you're really hopeful that you have a great judge. You know, a great judge can really help sort of cut through this stuff. So, you know, you say that and as a you know, I'm a real estate broker. I'm not an attorney. I've been in many courtrooms over probate matters. And it seems to me there's always the law, the letter, the rules, the procedures, the documents, your pleadings, your objections. Are they filed out right? Are they on time? But there always to me is the underestimated value of the judge's impression of the attorney. The great attorneys get it and I think the average ones just don't realize how much discretion the judge has until they lose something that's important to them. And how that has to be worked non-stop, you know, like so talk a little bit about the importance of your relationship with the judges. I know the court is the guardianship court is fairly narrow, so my guess is you're seeing some of the same judges regularly. Yeah. So, in the guardianship part, at least here of where I practice in downstate New York, we typically have the same judges practicing in the guardianship part. And they practice there they sit there a little bit longer than the average judge. And which is so valuable because guardianship is, you know, this really specialized niche area with its own set of rules. And having a judge who understands the rules, but also has enough experience to have seen different things, understands what's involved in caring for a person with a disability, complying with all the financial and Medicaid rules, you know, if you have a judge who understands all of that, you know, and then can sort of gets good at reading personalities and cutting through the nonsense, it's such a gift to a guardianship. Yeah. So, what are some things that you do to maintain or elevate your relationship with the judges that maybe you see some of your colleagues overlook or not pay as much attention to? Well, I think because I've been doing this for a long time and I've handled a lot of guardianships, judges really appreciate it when you know what

11:34 You're doing. You know, they really appreciate it when you're cutting down on their workload because you're documents properly drafted. You're, you know, you're helping them through the process. I also think judges really appreciate when you're brief, when you're concise and brief and you're not dragging up all of the he said, she said. You're sort of really letting the facts and circumstances follow the rulings. You know, I again, I'm not an attorney, but I'm often in court on properties and there are times that I have to make a appeal to a judge on a matter. And what I've learned is as few words as possible. Yes. As brief as possible as and then and I watched the other real estate agent and by nature we tend to want to talk and talk and talk and you can just see with each word the judge is getting more upset. I'm like yes keep going keep going. There's one thing is just keep the ball moving. Do not hold the judge up. They got a long agenda or if they don't and they're done they want a break. They've worked through a long agenda and they want to get off of that. So number one is kind of keeping things moving. So let's go back a little bit because one of the things you brought up also I think is hard to understand for outsiders which is the importance of planning because if the recipient of the inheritance gets assets those can almost be used against them to qualify for certain resources right and then inevitably they're going to run out.

12:56 There's no nobody has or I should say very few people have enough resources to hold off forever the expenses are required for many people who have special needs. It sounds like gaming the system to the outsider, right? You know, you're you could otherwise leave to your child $3 million, $5 million or not in a certain way and they end up getting money in the state. On the flip side though, we've paid taxes for those services. So, it's always a depending on which side of the equation you're on. If you're the writer of the check, you want to you want to get your tax benefits back. If you're the just a taxpayer, it might bother you. Talk a little bit about why it's important and how you see it benefiting the recipient in the long run. So, it's important because if somebody receives an outright inheritance, right, cash in their pocket, and they are receiving benefits under a program that requires a low income or a low asset level to maintain those benefits, they're going to lose those benefits if they've come into this money. Right. Right. The other thing that's important to remember is with special needs children as they age into adulthood quite a few of the benefits and services they receive cannot be purchased with money. Like all world may not be able to be privately paid for the benefits that they're receiving. So it's important for them to retain their housing, retain their medical coverage because it follows them and it helps them to live a productive life. So you don't want to mess with that system that's been set up. So it's really important that money not go into their pocket, but go into the proper vehicle to protect the money, allow them some extras, but not disrupt the services they're receiving. So what are some of the taxes tactics in an estate plan that can both provide for some of the extras, but at the same time will not disqualify them from receiving the essential services? Well, the big one is always the supplemental or special needs

14:59 Trust, you know, which is a trust specifically designed for people who are disabled and it allows them to hold money, right? There's different kinds, but to make it simple, it allows the trust to hold money on their behalf. They can't be the bene the trustee rather. There has to be another trustee and sometimes that's a family member and sometimes that's a professional. But it has to be administered very carefully and it allows the supplemental things to be paid for out of this inheritance while not disrupting the benefits that the person's receiving. So what are examples of supplemental things they can get versus things they can't get? So I've had people who have taken who have gone on day trips with that money. I've had people who have had family that's able to come and take them and I described the ice cream story, but similarly I have family that's able to come take the person out when they require a van and an aid to go with them and it's a costly endeavor and that can come out of a supplemental needs trust. Some of the other things that come out come can come out of that trust are purchases for maybe some clothing or a trip or a vacation or some extra help that they're not getting otherwise the supplemental the supplemental needs in life. So these are things that you identify ahead of time and get approved and then that way they're available for and obviously the nature of special needs is in many cases each individual person's needs are special, right? Some people need certain things, not other things. And you want to make sure you provide for those particular things. One of the people I know, like me, is not just Jewish, they're religious, or they keep kosher. Well, when they want to eat something, there are some restrictions involved or they want to go somewhere.

16:44 Well, there's some restrictions involved. So, they can't just go to stay at a Holiday Inn and eat at the breakfast bar or they can. Depends on what's going on there. But there are certain needs that have to be thought of, and sometimes the costs are different, and a family's gonna fight over those costs. It can become a little bit of a mess. So, one of the areas I know that's related to special needs trust in some ways is elder law, right? In some ways, you have the same kind of situation where you have somebody who is a human being who has their own sanctity and their own authority, but it's limited and they're not able to make these decisions on their own at some point in time. And so, you're kind of preparing for that, I guess, possibility. Or once they reach that, you're trying to deal with it. So talk a little bit about kind how estate planning is done for say spouses or family members who have memory loss issues and other capacity issues and how similar those are to special needs. So the planning is very similar. I guess that's sort of how you end up with a practice that does special needs planning on elder law. But the planning is very similar, right? We want to make sure that if the person is inheriting money, which sometimes happens when a spouse passes away or something like that the money is going into some sort of a secured account or vehicle so that person can continue to enjoy, say, their Medicaid benefits, for example, or if they're in a nursing home, they continue to have their care paid for, but there's a little extra money there for the things that exceed the $50 a month in New York that you're allowed to keep if you're in a nursing home. So that might again be a day trip. It might be a trip to the beauty parlor. It might be a visit to have your nails done or you know go to a wedding for a family member or something like that.

18:31 How often? So go back to special needs for a sec for a second. What percentage of families have the trust set up you know immediately because I mean boy I hope this comes across right. I mean, you know, you have a special na needs child fairly early in life, not maybe at birth, but fairly early years. You can anticipate you're going to have a problem of some sort or a challenge of some sort that's unusual and I mean anybody with children should have an estate plan. And it you know, so it may not need a special needs provision in it, but you need to have a plan. And obviously, if you are doing a plan and your child has special needs, you really can't start too early. When should somebody look into preparing, you know, the special needs portions of the estate plan? Is that is that done right away in estate planning or do you wait till the child's closer to maturity that you need these things? How does that work? So, there's a couple of different things, right? So, if you are a family with a child, you're concerned will be a special needs child or an adult with disabilities. It's important to convey that to the estate planning attorney so that we can include a testimeamentary special needs trust which means a trust that's created when you die. Right? And that's a way of passing a portion of your estate to that child without jeopardizing their benefits. So just another So that would be as soon as you set up your estate plan if you happen to have an a special needs child. The only way to do it correctly is with the special needs provision from the from the get-go. I would always do that. And you know, don't forget that every family with young children should have an estate plan out of the gate because you want Oh, that's why I have this podcast. I get everybody should have if you have a house or you have a child, you should have a plan. Yeah. So, there you go. Simple as that. Just if you have a house that you own, any real estate and or in California for sure, or a child, you should have an estate plan.

20:25 Now, the plan might be just a will. The plan might be documents and a friend or whatever. Most the time the document includes some sort of a formal estate plan with an attorney. I'm just I'm just saying that's why I do I'm sorry I interrupt you a bit. That's a soap box I'm on all the time. Me too. So any family with a young child should be making sure they're putting guardians in place and somebody to take care of money to support that child if they die before the child reaches the age of majority. But for those families with special needs children, we want to make sure we're adding extra provisions so that if there is any distribution, the child is still protected with their benefits. Now, if a family has assets or a child is expected to receive an inheritance, there's money coming in from a grandparent or an a malpractice suit or something like that. We can set up what's called a freestanding trust, which is not a part of the parents estate, but a trust set up just for the benefit of that child that's funded with money that either comes to the child through say a malpractice suit is when it happens a lot or comes, you know, through family members into a trust set up for that child's benefit. I've seen this. I saw this with automobile accident settlement where they were perfectly healthy and then not and needed additional help and the money was put into a trust that gave them kind of additional protections and some things we talked about. Yes, exactly. Okay. So again, just to recap back for the those are sort of simpler. If everybody should have an estate plan has children and if your child is special needs or and I guess you know when you say special needs that's broadly speaking you know sometimes kids grow into things or they grow out of things but we want to plan ahead and so that's something for the attorney to know about and make an appropriate legal assessment right we don't know medically you hope things whatever again I'm talking more about medical versus say u mental cases,

22:31 But they're cases we hope people, you know, improve and recover fully medically, but if they don't, that's a whole another special need, right? When people have medical issues that need particular attention and they're not able to take care of themsel as a result. Yes. I mean, I've handled cases where there have been severe traumatic brain injuries and somebody that will have to live in a facility for the rest of their life. And that trust was able to pay for specialized wheelchairs and computer equipment so communicate. So, you know, great needs. And then I've done special needs planning for kids who are maybe on the autism spectrum and they're going to be able to function to some degree independently but not completely, right? You know, and we want to make sure the protection is there. Yeah. I think with those are that's probably the case of the person where you're hoping they with medicine and treatment maybe that changes and nobody wants to say, you know, you're doomed forever to have any medical problem. We always hope people have recovery, but we want to plan for the possibility that they that it is what it is or it gets worse so that we're prepared in case things don't go well and we don't make it worse than it has to be. That's absolutely right. Okay. So, good. So, there we talked about a bit of estate planning and elder law somewhat kind of overlaps a little bit with that.

23:49 Let's talk a little bit about the business of law and estate planning practice. You're a sole proprietor. I am. And so, can you share like obviously everybody would like to be in a position where business just comes at you non-stop and all we're doing is handling that. But I just find even with the best trades that's not the case. There's a certain amount of activity that goes into generating business. So, you can pick and choose. Can you describe like what percentage of your day or week is on say business generation or you know developing new relationships versus the practice of li the ministry of duties. So I would say that the networking I do a lot of networking and that's how I a lot of my work comes through networking relationships that I've built over the years and I'd say I probably spend about 25 to 30% of my time networking in one form or another. I just came from breakfast with some friends I met at a networking group. So nice. I do that a few days a week and you know that's a very big part not just of the clients coming to me and the referrals coming to me but also in my being able to build a team to help my clients as fully as possible. You know, I work with trust companies and professional trustees and financial advisors and all kinds of other professionals who can provide my clients with well-rounded services. One of the things one of the groups people looking to work with attorneys offering are real estate agents, maybe not as much with special needs, but more maybe more traditional real estate. And I would say to them, rather than call and call attorneys and asking for leads, try to find where you can create value for the attorneys that you want to work with. So, what are things that a real estate agent can do for you or is there anything they can do for you as far as providing for your resources for your practice, as far as being part of your team or being part of the value proposition to your customers? So, I mean, a an agent that understands how estate planning fits into the process of buying a house, for example, if they're

25:51 Representing young families who are buying property, is it possible that they can work into the conversation how important it is now that you're buying a house to speak to somebody about creating a will or a trust, you know, having real estate agents who understand that they can add value by creating the same team for their clients, you know, 100%, you know, assets that way. And to me, that's just such a low hanging fruit. Like anytime you work with a buyer, you know how they're going to take title. As a real estate agent, we write under the contract, you know, Bob and Mary Smith or the Bob Mary Smith trust is one or the other. We know from the time they write their first offer, the first property, even when they're being pre-qualified, if they don't have it, if the bank account says in their name, excuse me, I notice the bank accounts in your name. Do you know the evangel estate plan? Why? When you're buying a house, it's important to consider this. One of the things, I don't know if it's as common in New York as is in California, but so many estate plans are done where the assets aren't funded in the estate. And so now you have a house that's in Bob and Mary's name and you have this fancy trust with no assets in it. And I would say, well, the time to do this, if you can is while you're looking so that when you buy the property, it's deed in the trust. It has tile insurance in the trust. That's the most secure way to do that. How are your thoughts on that process? Well, I so I always tell my clients, right, when they set when they come to me and they set up a plan and we create a trust, I always tell them when you buy the vacation home of your dreams, when you go and you buy the, you know, your condo in Vegas or whatever your dream may be, remember to call me first because you really don't want assets outside of your trust if we've created a whole estate plan based on assets being in your trust, right? So, you know, give me a call and let me tell you how to do that.

27:39 And it's super easy. Like you just described, if you tell your Realtor® and the title company, hey, I have a trust. I need to title this into the trust. It goes right in. It's not a big deal. It's really not a big deal at all. It gets done. They draw the deed, right? You sit the attorney to verify or whatever if you want to do that. But it's not But doing it afterwards. So, as a real estate agent, there's nothing like you talk to the customer about selling their property and you say a notice. You don't have a trust. Oh, no, we haven't at trust. Are you sure? Cuz I pull the title report. Like, I know the answer. I'm not I'm being polite. And they'll pull out the fancy booklet with all the documents and they even pull out the deed the attorney prepared them that they never signed and never got recorded. So, which is like having a nice safe in your house, but you put your gold bricks on top of the safe instead of in the safe and close the door and lock the door, right? You leave the door open to the safe, you know, for easy access, you know. So not, you know, a trust has a little homework involved and I always explain that you have to be willing to do a little homework when you create a trust. It's a great benefit to your family, but let's make sure it's handled properly. And that's a perfect example of not handling it properly. Yeah. And then you discover. Now, in California, we do have a process where you can kind of put the gold bars in the safe after the fact. Of course, for California, everything has to be unique here. But I don't think any of that provision. And as a result, if it's not in the trust, it's not in the trust and I think you're pretty much stuck at that point in New York. Is that the case? So, in New York, we do something called a pourover will. Correct. Yeah.

29:14 Like it sounds pour over will like pouring a teapot. And you pour the assets you've left out into the trust after your death. But there still has to be a legal process to do that. So if you've tr if you funded the trust properly at the setup and then bought one other thing that's outside the trust. The good news is the proceeding is limited to that one thing. The bad news is there has to be a proceeding. Good news is you only need one legal procedure. The bad news is you need a legal procedure. Exactly. And it's interesting. California we call it a Heggstad petition where you can get that deed, you know, if it's intention and you can prove it and blah. But the challenge there is the like right now if you file in LA County a probate filing from file date to first hearing is about 35 days on average. On a hex petition hearing an 850 hearing just a filing date 6 months out from the day you file. So it's easier but it just takes 6 months. And then by the way because it's a little specialized attorneys charge almost as much as they do on a probate. So it's kind of like it's easier but it's not. It's faster but it's not. How about let's just get it right the first time. And so I think as real estate agents I always try to encourage my agents to at the purchase verify upfront so you get that done and you might offer them a estate plan process to get it done during their home buying process.

30:38 Sellers, you want to check the documents right away. And then I think for a past client development, we should be going online identifying where our customers are and pointing out to them, hey, I noticed that I sold his house 5 years ago and it's still deed in your name. So you guys not familiar with the advantages of a estate plan? So if somebody wanted to talk to you about estate planning, what's the kind of the doorway in? What's the first step on working with you and considering you as a resource? You do today we talked about guardianships and conservatorships and elder a little bit, but you also do standard estate plans. It's all part of that mix. Correct. Of course. Yeah. So somebody had you know if they have particular need, special needs trusts or in general estate planning, what's the first step? Is there a call to you or a consult or do you do webinars or what's the first step to start working with you? So people can call or they can email me and they can also send a request through my website and we'll obviously get back with them and we'll send them a brief introduction form to get some basic information about what their goals are and we'll set up a consultation. Most of our initial consultations are on Zoom because most people find that most convenient, but we can also do that in person. Anthony, use your state plan. Will her daughter look that cute that cute? Everybody gets a daughter that looks that cute with this. Now, my daughter looks looked that cute when she was that age, just for the record. Now she's older and has kids, but she did actually look that's a that is one cute little girl. Okay, so it's jackiecarolataw.com is a website. We also have it down below in the banner ad. And then on there you can click to start planning and or make a phone call and get set up and talk to her. And then again, one of the focuses of her practice is special needs trust area that she's really an expert in and has put some time and effort into providing some extra value. So Jackie is always I always learn so much when we talk. I really appreciate your time today. Thank you so much for being on Probate Weekly. Thanks, Bill. It was great to be here. And for the rest of you, this is Probate Weekly. We do this weekly new episode talking to attorneys primarily but vendors as well across the country to be more effective in our business. If I can help, I'm at Bill Gross Probate on social media. You can

32:41 Reach out, call, text, or email. If you like this, you have comments, please put the comments below. And also, I would say if you know somebody who you think I should interview for the program, please feel free to make those suggestions. We're always looking for great guests as well. I'm at Bill Gross Probate. You can continue the conversation on our Facebook group, Probate Weekly. You can go there if you have referrals out of the state, out of the area for Realtors®, for attorneys or just general questions. We have attorneys who monitor the messages there all the time. So again, thank you so much.