What the One Big Beautiful Bill Act Means for Your Estate Plan

Learn how to include charitable giving in your estate plan to reduce taxes, support causes you love, and leave a lasting legacy.

California’s Medi-Cal program is once again shifting course. Starting January 1, 2026 , the state will reinstate asset limits for most older adults and individuals with disabilities seeking long-term care or other non-MAGI (non-Modified Adjusted Gross Income) Medi-Cal benefits. This change marks a return to rules lifted just a few years earlier, creating uncertainty and concern for many California residents. Here’s a look at the history, what’s changing, and what you should do to prepare. A Brief History: From Asset Limits to Expansion and Back Again For decades, Medi-Cal eligibility for older adults and individuals with disabilities included strict asset tests . Applicants had to keep countable assets below $2,000 for an individual or $3,000 for a couple , excluding certain exempt assets like a primary residence and one vehicle. But that changed in 2022 , when California began phasing out the asset test: July 1, 2022 : The asset limit increased significantly to $130,000 per individual . January 1, 2024 : The asset test was eliminated entirely for most non-MAGI Medi-Cal applicants, allowing people to qualify regardless of how much money or property they held—so long as their income met the program’s thresholds. Under a recent state budget agreement, the asset test is returning in 2026 , reversing the recent reforms and reverting to a more traditional eligibility framework. What Are the New Medi-Cal Asset Limits in 2026? Starting January 1, 2026 , California will reinstate asset limits for non-MAGI Medi-Cal eligibility. The limits are higher than they were decades ago, but the reintroduction still represents a significant change: $130,000 for an individual $130,000 for an institutionalized spouse (in a nursing home), plus $157,920 for the community (at-home) spouse SSI-linked Medi-Cal beneficiaries will continue to be subject to much lower limits Who Will Be Affected? New Applicants After January 1, 2026 Anyone applying for non-MAGI Medi-Cal after this date must disclose their assets and stay within the new limits. Current Medi-Cal Beneficiaries Beneficiaries already receiving Medi-Cal will be required to report their assets during their annual redetermination process starting in 2026. People Who Transferred Assets During the No-Limit Period Those who gave away assets in 2024 or 2025 may face unexpected scrutiny. It remains unclear whether such transfers will trigger penalties under the reinstated rules or if they’ll be exempt because the asset test wasn’t in place at the time of transfer.  What Assets Count Toward the Limit? The definition of countable vs. exempt assets is not changing. Here’s a summary: Exempt Assets (Not Counted): Primary residence (if you or your spouse live there) One vehicle Household goods and personal effects Jewelry (within reasonable limits) Retirement accounts in payout status The $130,000 individual property reserve Countable Assets: Cash, checking, and savings accounts Investment accounts (stocks, bonds, mutual funds) Real property other than your home Second vehicles Business interests (in some cases) What If You Gave Away Assets in 2025? One of the most significant unresolved issues concerns asset transfers made during the no-limit period (2022–2025). For example, if someone gifted $50,000 to a child in 2025 while legally eligible for Medi-Cal, will that gift now trigger a transfer penalty in 2026? So far, California’s Department of Health Care Services (DHCS) has not clarified its position. This uncertainty leaves families wondering whether their previously legal actions will now jeopardize future eligibility. What You Should Do Now If you or a loved one receives Medi-Cal or plans to apply in the future, you should begin preparing for the 2026 changes now: Inventory your assets : Identify what is countable vs. exempt. Avoid last-minute gifts or transfers : These may not be protected once the new rules take effect. Talk to an elder law or estate planning attorney : Legal professionals can help you: Restructure or protect assets through legal strategies Set up irrevocable trusts or other tools Avoid transfer penalties Navigate your renewal and reporting obligations Proper planning could allow many current beneficiaries to maintain coverage with minimal disruption. Final Thoughts The reinstatement of Medi-Cal asset limits in 2026 marks a dramatic policy shift, one that rolls back recent progress toward expanded access and simplicity. While the new limits are more generous than in the past, they still demand close attention and proactive planning. For those who qualified during the no-asset-test period, now is the time to review your financial position and prepare for annual reporting . And for those approaching eligibility, consulting with a knowledgeable attorney could make the difference between approval and denial. If you have questions about how these changes might affect your situation, contact our office for guidance . We can help protect your eligibility, your family, and your future.

Estate planning is crucial in ensuring that your assets are distributed according to your wishes and that your loved ones are taken care of after you're gone. However, an estate plan is not a set-it-and-forget-it document. Regularly updating your estate plan is essential to reflect changes in your life, family, and the law. Here’s why it’s necessary and when you should consider making updates.  Why You Need to Update Your Estate Plan Reflect Current Wishes and Circumstances Life is dynamic, and your estate plan should be too. Changes in your personal or financial situation may affect your initial decisions. Updating your plan ensures it accurately reflects your current wishes and circumstances. Accommodate New Family Members Births, adoptions, and marriages bring new members into your family who may need to be included in your estate plan. Ensuring these individuals are considered can help prevent disputes and ensure everyone is provided for according to your wishes. Account for Deaths and Divorces Unfortunately, deaths and divorces are part of life’s changes. If a beneficiary or appointed executor passes away or if you get divorced, it’s crucial to update your estate plan to reflect these changes and avoid unintended consequences. Adjust to Changes in Law Estate planning laws can change, potentially affecting the distribution of your assets. Regular updates ensure your estate plan remains compliant with current laws and takes advantage of any new benefits. Incorporate Changes in Assets Over time, you may acquire new assets or dispose of existing ones. Your estate plan should be updated to include new assets and remove those you no longer own, ensuring accurate and intended distribution. When to Update Your Estate Plan After Major Life Events Marriage or Divorce: When you get married or divorced, your estate plan should be updated to reflect your new marital status and any changes in your wishes regarding asset distribution and guardianship. Birth or Adoption of a Child: New children or adopted children should be included in your estate plan, with considerations for guardianship and financial provisions. Death of a Beneficiary or Executor: If someone in your estate plan dies, you must update your plan to appoint new beneficiaries or fiduciaries. Significant Financial Changes Acquisition or Sale of Assets: Buying or selling significant assets, such as a home or business, requires updating your estate plan to reflect these changes. Changes in Financial Status: Increases or decreases in wealth can impact your estate planning strategy, including how much each beneficiary receives and potential tax implications. Changes in Relationships Estrangement or Reconciliation: If relationships with beneficiaries change, such as becoming estranged or reconciling, your estate plan should be updated to reflect these new dynamics. Health Changes Diagnosis of a Serious Illness: A severe health diagnosis may prompt you to review and update your estate plan to ensure that all healthcare directives, powers of attorney, and end-of-life wishes are current. Moreover, if one of your fiduciaries or beneficiaries suffers from health concerns, you may need to adjust your estate plan. Changes in the Law New Estate Planning Laws: Periodic reviews with an estate planning attorney can help you stay abreast of any legal changes that might affect your estate plan or estate tax situation. Conclusion Regularly updating your estate plan is critical to ensure that your final wishes are honored and your loved ones are protected. It is crucial to revisit your estate plan after significant life events, financial changes, relationship shifts, health issues, and legal updates. Consulting with an estate planning attorney can provide guidance to navigate these updates and maintain an accurate estate plan. An outdated estate plan can lead to unintended consequences, legal challenges, and family disputes. Keep your estate plan current to ensure peace of mind for you and your loved ones.

No one likes to think about the possibility of becoming incapacitated due to illness, injury, or old age. Planning for incapacity, however, is a critical aspect of estate planning that ensures your wishes are respected and that your affairs are taken care of if you cannot do so yourself. This blog post outlines the essential steps to prepare for this possibility, helping you maintain control over your financial, legal, and health care decisions. Understanding Incapacity Incapacity means being unable to make decisions for yourself due to mental or physical impairments. This could be temporary, due to an injury or illness, or permanent, as with advanced age or chronic conditions. Planning can help prevent court-appointed conservatorship, which might not align with your personal preferences, and can save your loved ones significant financial burdens, stress, and confusion. Legal Documents to Prepare Effective planning for incapacity involves setting up several key legal documents: Durable Power of Attorney For Finance: This document allows you to appoint someone you trust to manage your financial affairs if you become incapacitated. Unlike a general power of attorney, a durable power of attorney remains in effect if you lose mental capacity. Advanced Health Care Directive: This health care power of attorney allows you to designate a person to make healthcare decisions on your behalf if you cannot do so. This document should be accompanied by discussing your medical preferences with the appointed individual. In this document, you outline your wishes regarding medical treatment if you are incapacitated and unable to communicate. This can include instructions on life support, resuscitation, and pain management. Revocable Living Trust: A trust allows you to maintain control over your assets while alive, even if incapacitated, and simplifies management and transfer after your death. You can appoint a successor trustee who will manage the trust’s assets if you can no longer do so. HIPAA Release: This document authorizes your doctor to write a letter of incapacity -or capacity, as the case may be- so that your successor can step into your shoes.  Choosing the Right People Selecting individuals to act on your behalf is crucial to planning for incapacity. Consider the following when making your choices: Trust and Responsibility: Choose individuals who are trustworthy and capable of handling the responsibility, whether they are family members, friends, or professionals. Willingness to Serve: Confirm that the people you designate can act in these roles when needed. Understanding Your Wishes: Ensure that the designated individuals fully understand your preferences and are prepared to advocate on your behalf. Communicating Your Plans Once your documents are in place, it is important to communicate your plans clearly: Inform Key Individuals: Make sure that anyone named in your documents and close family members know about the plans and where the documents are stored. Obtain Legal Advice: Consult with an estate planning attorney to ensure that all documents are legally sound and reflect your current wishes. Update Your Wishes: Review and update your documents regularly, especially after major life changes such as divorce, the death of a designated individual, or significant changes in your health. Conclusion Planning for incapacity is a proactive step that protects you and eases the burden on your loved ones. By establishing clear, legally sound documents and communicating your wishes, you can ensure that your preferences are honored and your affairs are well-managed, no matter what the future holds. Call to Action If you have yet to plan for potential incapacity, or if your current plans need updating, consider contacting an estate planning attorney today. Protecting your future starts now, and we are here to help guide you through every step of the process. Contact us to learn more about how we can assist you in securing your peace of mind.

The definition of family has broadened significantly, with blended families becoming increasingly common. These families, consisting of spouses, their children from previous relationships, and any children they might have together face unique challenges—especially regarding estate planning. Proper estate planning is crucial to prevent disputes and ensure that all family members are treated fairly and according to the estate holder's wishes. The Unique Challenges of Blended Families Blended families often face complex dynamics that can complicate estate planning. Issues such as previous marital agreements, children from prior relationships, and varying financial situations can create potential conflicts. Without a clear estate plan, there's a risk that certain family members may feel overlooked or unfairly treated, leading to disputes that can strain family relationships. Key Components of an Effective Estate Plan For those navigating estate planning within a blended family, several key components should be considered: Wills: A will is essential. It specifies how assets should be distributed and can help ensure that no family member is unintentionally disinherited. It's important to address any promises made to children from previous relationships. Trusts: Trusts can offer a flexible way to manage assets. For example, a bypass trust can ensure that the surviving spouse is cared for during their lifetime, with remaining assets then passed to children from a previous marriage. Guardianship: It’s vital to make guardianship arrangements for any minor children, particularly if they are from a previous relationship and their other biological parent is not the chosen guardian. Life Insurance: Life insurance can provide specifically designated funds for certain family members or help cover estate taxes, thus not depleting other assets intended for different parts of the family. Retirement Accounts and Beneficiaries: Updating beneficiary designations on retirement accounts is crucial, as these assets typically pass outside of a will and can be a significant source of contention if not carefully allocated. Legal Considerations Neglecting estate planning in a blended family can have serious legal ramifications. Without a clear directive through legal documents, state laws will determine how assets are divided, often not reflecting the deceased’s wishes or the family's needs. Engaging with an attorney skilled in blended family estate planning is essential to navigate these waters smoothly. Tips for Open Family Communication Open communication is perhaps the most critical component in estate planning within blended families. Here are a few tips: Hold Family Meetings: Regularly discuss estate plans with the entire family present. This can help manage expectations and reduce misunderstandings. Be Transparent: Honesty and transparency about what each family member should expect can prevent feelings of resentment. Encourage Questions: Allow family members to express their concerns and ask questions to ensure they feel heard and valued.  Conclusion Estate planning in blended families is about distributing assets and caring for loved ones after you're gone. It’s also about ensuring that all family members are provided for in a way that supports your overall family dynamics and respects your relationships. Don’t wait until it’s too late. If you’re part of a blended family, consider speaking to an estate planning attorney to create a plan that affirms your wishes and protects your family’s future. For more information or to start your estate planning, contact us today .

In a landmark shift that promises to reshape the landscape of healthcare eligibility in California, Governor Gavin Newsom signed Assembly Bill 133 into law on July 27, 2021. This transformative legislation heralds a two-phased approach toward a more inclusive Medi-Cal program, specifically targeting Non-Modified Adjusted Gross Income (Non-MAGI) Medi-Cal programs, encompassing Long-Term Care and Medicare Savings Programs. The essence of this law is the elimination of the asset test, a move that aims to make healthcare access more equitable and less cumbersome for applicants. The Journey to Change The path to this significant change wasn't immediate. It involved careful planning and the federal Centers for Medicare and Medicaid Services (CMS) approval. On July 14, 2023, CMS gave its nod to the California Department of Health Care Services' (DHCS) State Plan Amendment, effectively giving the green light to do away with the asset test for determining eligibility. As of January 1, 2024, the way Medi-Cal evaluates eligibility has fundamentally shifted: an applicant's assets will no longer weigh in the balance. Instead, the focus shifts entirely to the applicant's and their spouse's income to determine the share of cost - or the monthly out-of-pocket expense for the applicant. What This Means for Applicants This change is monumental, especially for those with substantial assets. Previously, many individuals found themselves ineligible for Medi-Cal benefits that would subsidize their long-term care costs due to the asset test. Now, the doors to essential healthcare support are wider, allowing more Californians to qualify for benefits irrespective of their asset holdings.  However, while the asset test for eligibility is now a thing of the past, Medi-Cal's stance on asset recovery remains intact. Medi-Cal will continue to seek recovery from assets that pass through probate upon the death of a beneficiary. This is crucial for Medi-Cal recipients and their families to understand, as it underscores the importance of informed estate planning. The Importance of Estate Planning With the elimination of the asset test, individuals who benefit from Medi-Cal for their long-term care will likely possess more substantial assets. This change brings to light the critical role of estate planning. These assets should not be subject to probate to shield assets from Medi-Cal estate recovery claims after the beneficiary's death. One effective strategy to achieve this is by holding the individual's assets in a Trust. Estate planning, particularly in the context of this new Medi-Cal landscape, is more vital than ever. It ensures that beneficiaries can enjoy the full scope of their benefits without the looming threat of asset recovery. It secures a legacy for future generations, safeguarding assets within the family. Looking Ahead The enactment of Assembly Bill 133 and the subsequent approval of DHCS' State Plan Amendment marks a pivotal moment in California's healthcare policy. It reflects a shift towards a more inclusive and equitable system, where financial assets are not a barrier to essential healthcare services. This change offers Medi-Cal applicants and recipients a new opportunity to secure their health and financial well-being. As we navigate this new era, the importance of comprehensive estate planning comes into sharp focus. By taking proactive steps to manage assets effectively, Californians can ensure that they and their loved ones can fully benefit from the Medi-Cal program without jeopardizing their financial legacy. In summary, eliminating the Medi-Cal asset test is significant in making healthcare access more equitable. It underscores the need for diligent estate planning to protect assets from recovery claims, ensuring beneficiaries enjoy peace of mind and security in their later years.

In 2024, the Corporate Transparency Act (CTA) ushered in a significant change in the landscape of corporate regulations in the United States. One of the key provisions of this act is the Beneficial Ownership Information Reporting Rule (BOIR Rule), which aims to enhance transparency in corporate structures and prevent illicit financial activities. Understanding the BOIR Rule is crucial for businesses and individuals, as compliance is now mandatory. Let's delve deeper into what this rule entails and its implications. What is the BOIR Rule? The BOIR Rule requires certain businesses to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Beneficial owners are individuals who directly or indirectly own or control a significant portion of the business. This rule aims to curb illicit financial activities, such as money laundering, terrorism financing, and tax evasion, by providing law enforcement agencies access to crucial ownership information. Who is Affected? The BOIR Rule applies to a broad spectrum of legal entities, including corporations, limited liability companies (LLCs), and other similar entities formed under state law. Specifically, entities created or registered after the rule's effective date are subject to reporting requirements. Even entities formed before the act must comply with reporting obligations during specific triggering events, such as ownership or corporate structure changes. What Information Needs to be Reported? Businesses covered under the BOIR Rule must report detailed information about their beneficial owners to FinCEN. This includes the owner's full legal name, date of birth, current residential or business address, and a unique identifying number from an acceptable identification document, such as a driver's license or passport. Furthermore, entities are required to provide updates to this information within a specified time frame following any changes or upon request by FinCEN. Benefits of the BOIR Rule: Enhanced Transparency: By requiring businesses to disclose information about their beneficial owners, the BOIR Rule promotes transparency in corporate structures, making it more difficult for individuals to hide illicit activities behind complex ownership arrangements. Improved Law Enforcement: Access to accurate and up-to-date beneficial ownership information empowers law enforcement agencies to investigate and prosecute financial crimes more effectively, including money laundering, fraud, and terrorism financing. Leveling the Playing Field: The BOIR Rule helps level the playing field for businesses by ensuring that all entities, regardless of size or industry, adhere to the same reporting standards. This fosters a fairer business environment and reduces the risk of illicit actors gaining unfair advantages. Reporting Timeline: The Beneficial Ownership Information Reporting Rule (“BOIR RULE”) under the Corporate Transparency Act (“CTA”) became effective January 1, 2024, implemented primarily through a rule published by the Financial Crimes Enforcement Network (“FinCEN”) on September 30, 2022. This rule triggered beneficial ownership reporting requirements for millions of businesses and entities (unless exempt). If the business was established before January 1, 2024, the initial report is due by January 1, 2025. This provides existing entities with a grace period to gather and submit the required information to FinCEN. If the business was established after January 1, 2024, but before January 1, 2025, the initial report is due 90 calendar days after it was established. This timeline ensures that newly established entities promptly comply with reporting requirements. For businesses established after January 1, 2025, the initial report is due 30 calendar days after it is established. This tight deadline emphasizes the importance of immediate compliance for newly formed entities. It is important to note that failure to comply with the reporting timeline and requirements outlined by the BOIR Rule can result in hefty penalties. Noncompliance may subject businesses to fines, sanctions, or other enforcement actions imposed by FinCEN. Therefore, businesses must understand their reporting obligations and adhere to the specified timelines to avoid potential penalties. Challenges and Concerns: While the BOIR Rule offers numerous benefits, its implementation may pose challenges for businesses. Compliance with reporting requirements can be time-consuming and resource-intensive, particularly for small and medium-sized enterprises with limited administrative capacity. Moreover, there are concerns about the privacy and security of the information provided and the potential for misuse or unauthorized access by third parties. Conclusion: The BOIR Rule introduced under the CTA represents a significant step forward in combating financial crimes and promoting transparency in corporate ownership structures. By requiring businesses to disclose information about their beneficial owners, the rule aims to deter illicit activities while leveling the playing field for businesses of all sizes.

A Warning from the IRS on Dubious Tax Claims

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