I CAN’T AFFORD MY MEDICARE PREMIUMS! WHAT SHOULD I DO?

Life is getting more expensive every day. Even though inflation rates are down at the moment, it doesn’t feel like it. If you are having trouble paying premiums for Medicare health insurance there are several Medicare Savings Programs (MSPs) programs that might be a good fit for you:

HOW MUCH CAPITAL GAINS TAXES WILL I OWE WHEN I SELL MY HOME?

The rules around capital gains changed dramatically for 2013 so I’m glad you are asking this question now.  I will break it down into separate questions:

What is Capital Gains?

When you sell you home at a profit the IRS considers the profit “capital gains” rather than “ordinary income” such as the income you receive in your paycheck.  Capital gains are taxed different than ordinary income.  So, if you purchased the house for $100,000 and you sell it for $500,000 you have earned $400,000 in capital gains.

Are there any exclusion for Capital Gains on a home?

ALERT! GO ON MEDI-CAL AND LOSE YOUR FAMILY HOME!

Here is a bit of information that I couldn’t find on the Covered Californa website.   In fact, it didn’t occur to me to look for it until a client recently asked me this question:

"I’m 55 and eligible for the expanded Medi-Cal program.   If I go on the program will the State of California come after my property?”  

When she asked me this simple enough question a few thoughts went through my head:

•  Before the Affordable Care Act (AKA Obamacare) you could only be eligible for Medi-Cal if you were extremely poor. You couldn’t have more than $2000.00 in assets, in fact. 

• After Obamacare, there is a lovely thing called “expanded Medi-Cal” which allows anyone under 65 with a low income (regardless of their net worth) to become eligible for health insurance through Medi-Cal. Here is a refresher on the changes to Medi-Cal under the ACA.

• By all accounts, this new law will greatly increase the rolls of people on Medi-Cal. 

• In fact, the lovely Covered California website will direct you toward Medi-Cal instead of subsidized health insurance if you note a low income on the website form.  

But here is what I could not find anywhere on the Covered California site (although I know they have to tell you somewhere along the way if you actually sign up for Medi-Cal):

If you are over 55 with an income low enough to be eligible for expanded Medi-Cal— your estate WILL be subject to recovery.  

This means that for people between 55 and 65 it isn't simply health insurance:  it is a LOAN.

Oh and by the way, this applies to those of you who live in medicaid states too (Update:  Some states are closing this gap!  Yea Oregon!  Go Washington! Click here to support the California legislation.

Estate recovery means that the State wants a reimbursement for every dollar it spent on your health care while you were alive and, if a home is the only thing in your estate when you die, the home is what will be used to pay.


Hard to believe that the government would make it so easy for you to fall into a trap? It was for me too.  So I looked at the statute.  I felt sure that somewhere Obama and crew had put in a provision saying that if someone over 55 went onto the Covered California site and was directed to Medi-Cal instead of the subsidized programs the government wouldn’t seek reimbursement for their health care from their estate.  After all, for someone right on the edge of eligibility the subsidized program provides health insurance for only $1.00 a month— check below for how I got this number. We know the government isn’t seeking reimbursement for all of those subsidies it is paying. Why would the government waive reimbursement for someone paying just $1.00 a month for their health insurance but demand reimbursement from someone who is too poor to pay even that?

I didn’t see anything in the law that would fill this huge gap.  I checked the other State webpages (www.c4yourself.com not http://www.dhcs.ca.gov) that cover Medi-Cal looking for some information that would confirm that the people between 55-65 were protected, or at least confirm that they are not.  Nothing.

In fact, if you look for the answer to the question “Do I have to pay for Medi-Cal?” in the FAQ section of the State page it gives this answer:

"It depends. If your income is less than Medi-Cal limits for your family size, you will receive Medi-Cal services at no cost to you. If your income is more than Medi-Cal limits for your family size, you will have to pay a certain amount only in the month you have medical expenses. This is called a share of cost.” 

It neglects to mention that your heirs will have to pay for the services you received after the day you turned 55.  I may be asking a bit too much, but I think when someone asks, “Do I have to pay?” they mean them paying as opposed to the government paying not them paying as opposed to their children.  The handy-dandy FAQ section should read:

"It depends. If your income is less than Medi-Cal limits for your family size, you will receive Medi-Cal services at no cost to you, BUT YOUR HEIRS WILL HAVE TO PAY IT ALL BACK OUT OF WHATEVER YOU SAVED YOUR WHOLE LIFE IF YOU RECEIVE ANY BENEFITS AFTER AGE 55. If your income is more than Medi-Cal limits for your family size, you will have to pay a certain amount only in the month you have medical expenses. This is called a share of cost.”

Still hoping I’d just made a mistake and read the code wrong, I wrote to Medi-Cal directly. Here is the emailed response I got:

“Thank you for contacting the Department of Health Care Services (DHCS). Medi-Cal is required to recover the costs of medical assistance provided after the age of 55 from the estates of deceased Medi-Cal beneficiaries….This was not changed as a result of the passage of the Affordable Care Act. Natural and adopted children are treated the same under Medi-Cal.The applicable section of the federal law is Title 42, Unites States Code, Section 1396p(b).”  (The emphasis is mine.)

The DSCS was quick to explained that all of the usual exceptions apply to this type of estate recovery, but neglected to comment on how fundamentally unfair it is to force very poor people ages 55-65 to pay for their health care with their homes while everyone else, from birth to death, is now eligible for either subsidized health insurance or (for those over 65) medicare.

THIS AGE 55-65 MEDI-CAL DONUT HOLE IS SO BIG YOUR HOME COULD FALL THROUGH IT. 

Let me be clear: if you make the right amount to qualify for a subsidized health insurance plan, your costs are going to be shared and subsidized by the government. But if you go on Medi-Cal, you owe the entire amount that Medi-Cal spends on you from the day you turn 55.

If you die owing the State money for any medical services you received in the ten years between age 55 and age 65 when you became eligible for Medicare— your estate will have to pay.  That means your heirs will get a nasty letter from the government saying they own however many thousands of dollars it spent on your behalf and they must pay out of their inheritance.  If your only asset was your home, the State of California will graciously allow them to put a lien against the home in order to pay.

Of course, this is all part of a much larger problem.  As you may or may not be aware, family homes are regularly lost to the government’s reimbursement claims because of the high cost of nursing home care.  Contrary to popular hopes, Medicare does not cover long term nursing home costs.  People must spend their own money on nursing home costs and then, when they are broke, they must go onto Medi-Cal.  I have a post about the eligibility requirements.  When they die, their estate is subject to reimbursement.  Reimbursement is a federal mandated law, folks, so call your Congressperson to complain.

The fact that the government seeks reimbursement from homeowners at all is fundamentally at odds with the American Dream.  Carol J. Wessels, who is an attorney in Wisconsin, makes this great point about using homes as reimbursement for medicaid:

"This causes me to wonder why the state is taking such draconian steps against elderly individuals, just because they had the foresight to invest in the American Dream, a home. An individual who was less frugal, frittered money away and did not invest in a home, would receive the same Medicaid benefits, and not be penalized for being a homeowner. Even more offensive is that as far as I can tell, a homeowner can commit a crime and go to prison, receive food, housing and medical care there, which the State is required to provide, and still come out with no lien on their home. If I am wrong about that, I hope someone will point it out.”
Will Medicaid Recipients Ever be Able to Sell Their Homes Under Wisconsin’s New Budget Law? 

SO BASICALLY, THIS HOUSE SIZED DONUT HOLE TREATS THE FRAIL ELDERLY OF OUR STATE WORSE THAN CRIMINALS 

AND 

COVERED CALIFORNIA ENTICES UNSUSPECTING PEOPLE INTO A PROGRAM THAT COULD RESULT IN THE LOSS OF THE FAMILY HOME. 

I went onto the Covered California website and played around a bit.  This is what I found:

• If you are an individual that makes less than $15,856 a year the site directs you to Medi-Cal.  It doesn’t seem to even allow you to go forward and purchase coverage.
• If you are an individual that makes $15,857 a year you can get subsidized coverage at the SILVER level for $1.00 a month here in Santa Cruz (plan availability varies by county).   That is a no-deductible plan everyone.

So, if you are over 55 and earn less than  $15,856 a year, but have a home would you like to ask your children to cough up that $1.00 a month or would you like them to use that home to pay back the State after you die?  I know what I would like to do, but the State doesn’t let you choose.  

AS STRANGE AS IT SOUNDS, YOU HAVE TO PROVE UP ENOUGH INCOME TO QUALIFY FOR GOVERNMENT SUBSIDIES.  

If anyone out there has come up with a solution to the problem of not having enough income to qualify for the Obamacare government subsidies, I’d love to hear it.  One idea of mine is to do a reverse mortgage to slightly increase income but that still means that the poorest of the poor are having to pay mortgage companies fees and interest just to qualify for inexpensive health insurance.  There are also trusts that can act as annuities, basically a way to give yourself a reverse mortgage. Another idea of mine is for an anticipated heir, such as a child, to employ the parent, but this raises tax issues….

Politics and theoretical discussions aside, if you are on Medi-Cal and you own a home, you should contact an Elder Law attorney right away.  It is not good enough to simply go to an Estate Planning Attorney because the Medi-Cal laws are very difficult to understand and those of us that have made the effort are few and far between.

THERE ARE WAYS TO SAVE YOUR HOUSE, BUT THEY REQUIRE YOU TO TAKE YOUR HOUSE OUT OF YOUR ESTATE AND YOU NEED EXPERT ADVICE FOR THAT. 

By the way, if removing your home from your estate to avoid reimbursement causes you to feel guilty, check out my webpage on the topic.

1/1/2014 UPDATE:  Oregon just passed a new rule that they will not do estate recovery for ACA medicaid expansion enrollees!  Washington is considering doing the same!    Now for California… 

WHAT IS MEDI-CAL ESTATE RECOVERY?

The Medi-Cal program pays for medical care for some persons whose savings and income are too low for them to be able to pay for their own care. In turn, the person or their estate may be required to pay the medical care costs back to Medi-Cal. When notification of a Medi-Cal recipient’s death is received, the Department of Health Services will determine whether or not the cost of services must be repaid.

This decision will be based on how much was paid by Medi-Cal and what is left in the estate of the deceased Medi-Cal beneficiary. Regardless of what is owed, the Department will never collect more that the value of the assets owned by the person who received Medi-Cal at the time of his/her death.

AM I ELIGIBLE FOR MEDI-CAL?

[The best way to answer this question is to copy the information from the great issue brief put out by www.healthconsumer.org.  You can find the full, original version here.]

On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (ACA) into law.1 The new health care law aims to increase access to health insurance through more accessible private insurance and an expansion of Medicaid (Medi-Cal in California).

The ACA goes into effect on January 1, 2014.

HOW TO CHANGE YOUR LEGAL GENDER IN SEVEN STEPS

The other day my son, who is five, announced to no one in particular but generally in my direction that he could use the pink crayon since he was home and nobody would see him.  Boys, he explained, aren’t allowed to like pink.  I wasn’t surprised. Despite my efforts, the Rules of Gender and Color have been shaping my son’s world since he first opened those baby blues.  

Normally, I would have jumped on the opportunity to get him thinking a little deeper about the Rules of Color, but I had just watched an interview with the fabulous Laverne Cox so I decided to tackle Gender instead.  “You know, some people are born with boy bodies but they are really girls on the inside.  Do you think they are allowed to use pink?”  “Yes,” he replied with certainty,  “any kind of girl can use pink.”

IS YOUR TRUST A TICKING TIME BOMB?

When the question is whether or not a trust is up to date the answer can be complicated because so much of that depends on what has changed in your life recently.  However, a huge change in the law has left ticking time bombs in the hands of many unsuspecting people and I’ve decided that it is important enough to step outside of my usual format so you can be made aware of the problem:

WHAT WILL THE JUDGE DECIDE?

A few years back (okay, more than a few) my boss gave me a crystal ball.  Her wry sense of humor mixed delightfully with good taste and the large glass ball still sits beautifully perched upon its pewter stand in my office today.  It’s a fun reminder for both me and my clients that, while most people were out there having lives, lawyers were spending their time memorizing the law, learning the procedures, practicing arguing tactics, working on oratory skills and perfecting writing skills…but we failed to master precognition.  A glaring flaw, I know.

So, unfortunately, I can’t tell you what the judge will decide.  However, ever the pleaser, here is what I will do for you: I will explain how the decision will be reached.  

WHAT IS A TRUST?

I’m sure I don’t have to tell you that trust is a beautiful, delicate thing.  It is built, brick by brick, interaction by interaction, into a foundation strong enough to hold higher levels of interactions in the future but, like a Jenga game, one poor decision can cause it all to come crashing down.

That’s trust and it is definitely related to what you are doing when you enter into a “trust agreement,”  but it isn’t the whole story.

But first, a little background:

YEA! I FINALLY HAVE A TRUST! AM I DONE?

According to several polls less than half of Americans have an estate plan so congratulations on getting the first step done.  Putting your affairs in order is a very loving thing for you to do for your heirs and yourself (in the case of your incapacity) and I want to encourage you to finish the job.  Hopefully you went to a qualified attorney instead of some trust mill, but either way the chances that you are done are, unfortunately, slim.  If you have a revocable living trust-based estate plan (as opposed to a will-based estate plan) then what you have paid for is a (hopefully) beautiful (hopefully) complete intention.  Acting on that intention is the next step.

I MARRIED MY DOMESTIC PARTNER! WHAT HAPPENS TO THAT OLD AGREEMENT?

Back in the dark ages (last spring), many gay and lesbian couples in California entered into domestic partnership agreements as a way to confirm their promises to each other because they did not have the right to marry.  A marriage is basically a three way agreement between the government and the couple that includes all sorts of statutory rights and obligations the starry-eyed lovers may or may not be aware of.  A domestic partnership agreement, however, is similar to a pre-marital agreement in that it is completely individualized to the particular couple involved.  (My post on pre-marital agreements is called “Do I need a pre-marital agreement if I love my fiancé?”)

DISCLAIMER

Disclaimer

Informational Purposes Only

The content of this blog is intended for informational purposes only.  

To the extent permitted by law, I disclaim liability to any person for any loss which may arise from relying on or by using information contained on this blog.

Although the information on this blog is intended to be current and accurate, it is not guaranteed or promised to be current, accurate, or complete. Also, posts are not updated to reflect changes in law that occurred after they were posted.  

Answering your question on Ask Roxy does not create an attorney-client relationship with me or my firm.  Answering your question on Ask Roxy does not constitute legal advise.  There is no way I can give legal advice through a generalized forum such as this.  In order to give legal advice, I have to talk with you directly and learn the specifics of your situation.  Ask Roxy is only generalized legal information, even when the answer is to a question you asked.

Laws differ by jurisdiction, and the information on this blog may not apply to every reader. You should not take, or refrain from taking, any legal action based upon the information contained on this blog without first seeking professional counsel.

Links to Other Websites and Ads

This blog contains links to other web sites. I make no guarantees or promises regarding these web sites and I do not necessarily endorse or approve of their content.

Also, you must know that I have no control over the advertisements on this webpage (which are selected by AdSense) and I do not enforce anything being advertised on the blog.

Not An Advertisement

It is not intended to solicit confidential information, business or to provide legal advice.  DO NOT SEND CONFIDENTIAL INFORMATION.

No Attorney-Client Relationship

Your use of the blog does not create an attorney-client relationship between you and the Law Offices of Roxanne Sher Olson or Roxanne Sher Olson personally.

While I am happy to have you contact me, merely contacting me does not create an attorney-client relationship until an agreement has been reached between you and my firm to handle a particular matter.

Because unsolicited confidential information may not be subject to an attorney-client privilege and may not be treated as confidential, you should not send confidential information to me without first speaking to me and receiving authorization to provide confidential information. Receipt of unsolicited confidential information by me or my staff will not disqualify me or my firm from representing another party in any matter to which the information relates. I will also have no duty to keep any such unsolicited information confidential prior to the formation of an attorney-client relationship.

I do not desire to represent anyone desiring representation based upon viewing this blog in a jurisdiction in which this blog fails to comply with all laws and ethical rules of that jurisdiction.

Copyright Information— Don’t steal my work!

This contents of this blog, the name the Law Offices of Roxanne Olson, and the logos used on the blog are protected by the copyright laws of the United States and other jurisdictions. You may print a copy of any part of this blog for your own personal, noncommercial use, but you may not copy any part of the blog for any other purposes, and you may not modify any part of the blog. Inclusion of any part of this blog in another work, whether in printed or electronic, or other form, or inclusion of any part of the blog in another web site, such as framing, or otherwise without the express permission of is prohibited, however, you may link to my site.  

OBAMACARE LOOMING: EXACTLY WHAT ARE YOU REQUIRED TO DO?

Health care is a very political subject because there is a ton of money involved, but you’re not asking about politics.  Also, while the big picture economics are very interesting (here is a great video), I’m guessing that you want to know how the law affects the economics of your pocketbook.  There is a lot to know so I’ll break it down into easily digestible sections here:

HOW CAN I STEAL A CHUNK OF MY NEIGHBOR’S LAND?

You may be surprised at how often I get this question.  Usually there is a story: years ago someone put up a fence to keep the cows out of the orchard or the foxes away from the chickens or the kids in the yard.  Maybe no one knew where the property line was back then or maybe they did, the “who knew what who said what who agreed to what” is usually in dispute, but what is clear is that one party is using property on the wrong side of the surveyed official property line, and Mr. Robinson is suing his neighbor.

WHY DO CORPORATIONS HAVE MORE RIGHTS THAN RIVERS?

This is a fascinating question. The most fascinating thing about it is the way my mind reacts to it. Why, I have to ask myself, am I so annoyed by this question? “Don't you know,” my mind answers as my eyes roll, “that corporations are groups of people and rivers are simply property?” I have this reaction because, as a lawyer, I am particularly indoctrinated into our current system of laws, but there is more to it than a simple legal answer, isn't there? There is pain. Laws protecting the rights of corporations have allowed them to destroy rivers.

GIFTING CIRCLES: JUST HOW ILLEGAL ARE THEY?

 Here is an idea: You give me some money. By giving me some money you will be entitled to ask others to join our group. Eventually, there is a chance you will receive money. Sound about right? No? Okay, how about I form a sister empowerment group that shares abundance. We focus on fulfilling our deepest selves through gifting love (and cash) toward the center of our lotus circle and someday, after you gather more women together, with lightness and invigorating clarity, you might blossom into the center and receive the abundance.  Sound better?

NOT MILK? CAN I CALL MY FROZEN VEGAN CREATION “ICE CREAM"?

Here is a little t.m.i. for you all (by the way, t.m.i. stands for “too much information” if it’s been awhile since you were around teen-speak): my mother likes to joke that after I was born she understood the meaning of the term, “snot-nosed kid.”  I know it will come as a shock to all of you that yours truly was ever disgusting, but we all have some color in our pasts and mine, apparently, was greenish yellow.  Eww!  Did I forget to tell you to put down your food before reading this?  So, um, moving right along I will report that, after the hassle of an elimination diet, we determined that the cause of this minor blip in my otherwise perfect nature was a sensitivity to dairy.

I WANT TO ROCK OUT MY PODCAST WITH OTHER PEOPLE’S SONGS, ANY ISSUES?

So you’ve decided to start dj’ing for your internet fans and want to show off your prodigious talent for selecting cool tunes. Maybe this will kickstart your international empire of cool. Except, you don’t want to pay anyone to play.


Before you get rolling, I want to introduce you to a little friend of mine. He is called “copyright law”— and he is ever so cute. No, actually, I take that back. He isn’t cute at all. Copyright law in the United States (yes, this is federal U.S. law) applies to creative and expressive works, which are most of the things that are included in a podcast. This includes, for example, performances, scripts, interviews, musical works and sound recordings. Under current US copyright law, copyright attaches automatically to creative, expressive works once they have been “fixed”, i.e. written down or recorded. Copyright law gives the owner of copyright the exclusive right to control certain activities in relation to their work. Here are some examples of what a copyright owner can control:

HOW CAN I LEGALLY HAVE TWO WIVES?

You want two wives? This is an interesting question. Until I wrote this post, in 2013 I assumed that most men would enjoy having one wife and one or two mistresses more than being legally responsible for two full-fledged wives. However, clearly I was wrong. This is by far my most popular post-- which means that lots, and lots of you are typing the heading into search engines. 


Well, I always knew my readers are an extraordinary bunch and you are not most men. (If you are even a man at all— See my post on the latest laws regarding homosexual marriage.)

WHY DO WE NOTARIZE DOCUMENTS?

To notarize or not to notarize that is the question.

The purpose of notarization is to deter fraud.

A notary complies with a statuary method to determine the identity of the individual that signed a document and, as needed, administers oaths.  This greatly increases the reliability of the signature.

Although there may be other ways to prove that someone signed a document, a notarization is a clean, cost-effective method.  In many places notarization is required by statute for certain documents (deeds, mortgages, power of attorneys), but it is a good practice for any important document.  If the document is ever in dispute in a lawsuit the notarization provides a significant procedural advantage because it is “self-authenticating” meaning that the signer doesn’t have to take the stand and swear that he signed it before the court will accept it into evidence.  You can imagine how useful this is if the signer is dead or otherwise unavailable.

SHOULD I USE ONLINE LEGAL FORMS?

I think everyone should use a qualified lawyer for every legal decision in their lives, without exception.


The idea of my dear readers walking through their day without an attorney there to point out all of the little legal potholes of life is terrifying!


However, I started this blog because I know lawyers are expensive (law school is expensive, malpractice insurance is expensive, running an office is expensive, mandatory continuing legal eduction is expensive) and you need, you deserve inexpensive access to law. (I also think you deserve inexpensive access to medicine but, really, what do I know, I’m just some liberal from California who should probably be charging more for her services.)

WHAT DOES “PER STIRPES” MEAN AND WHY IS IT IN MY WILL?

You find the words “per stirpes” in a paragraph that goes something like this, “I leave my grand piano to my dearest cousin Herbie Jazz. If Herbie doesn’t survive me then to his decedents per stripes.”  “Per stirpes” is a Latin word meaning to take “by representation” or “by class.”

Basically, if the named beneficiary (Herbie) dies before the testator (the person who’s Will it is), then all of the living people who are closest in relationship to Herbie, basically his children, will take “by representation” what their deceased parent would have taken, and if any of those children pre-decease the testator, their children will take by representation what their deceased parent would have taken and so it goes down the line.

Can I get help paying for someone to take care of me?

(Please note:  This is a California specific post.)

Yes, you can if you qualify.  In California, there is a program called “In-Home Supportive Services” for people with low income who need help paying for a personal assistant in their homes.

In-Home Supportive Services (IHSS) provide people with low-income who are blind, disabled, or 65 years old or older with personal assistance and other services so they can live safely in their homes.  (Notice that I highlighted “blind” and “disabled,” that is because in public benefits world everything must be exactly defined — clicking on the links should give you the definitions.)  

WHAT IS PROBATE?

In the most simplest terms, probate is a court-supervised process for transferring a deceased person’s assets to the beneficiaries listed in his or her will. Typically, the executor named in your will would start the process after your death by filing a petition in court and seeking appointment. Your executor would then take charge of your assets, pay your debts and, after receiving court approval, distribute the rest of your estate to your beneficiaries. If you were to die intestate (that is, without a will), a relative or other interested person could start the process. In such an instance, the court would appoint an administrator to handle your estate. “Personal representative" is another term used to describe the administrator or executor appointed to handle an estate.


Simpler procedures are available for transferring property to a spouse or for handling very small estates.

ARE WAIVERS OF LIABILITY VALID?

So, you’re standing on the ledge, looking down into the abyss before you, and it occurs to you that the guy who just strapped you into your bungie-jumping harness may have made you sign a waiver of liability for a reason. Or maybe you’re a parent and you’re signing your precious child, the one you changed your whole life around for, the most important thing in your world, up for soccer camp. But, first you have to sign, first you have to accept that if anything terrible happens it’s nobody’s fault but your own because you chose to participate.

WHAT DO I DO IF A SERVICE DOG POOPS ON MY FLOOR?

That wasn’t the question that I was asked. I was asked, “What should my business policy be on service dogs?” but I can read between the lines. What she meant was: “what should I do if the dog poops or bites?” But, as long as we’re using nice terms like “policy” I will start there:

While you should train your staff on the laws around service animals, you don’t need to post a policy or make any effort to inform your customers of a policy. In fact, you should avoid anything that treats any one customer (abled or disabled) differently from other customers.  

IS A REGISTERED DOMESTIC PARTNER THE SAME AS A SPOUSE?

No. A registered domestic partner is definitely not the same as a legal spouse for all purposes.


A registered domestic partnership is the California name for a civil union of two same-sex people (or two opposite sex people if one person is over the age of 62). Registered domestic partners have all the same rights and obligations that married people have under state law (basically you have to share your stuff and take care of each other) and, until recently, it was the only option for gay and lesbian couples.

SHOULD I ACCEPT PAYMENT IN BITCOINS?

More and more people are becoming interested in using bitcoins for transactions (and, no, not just people trading in illegal goods). For those of you who are scratching your head right now, bitcoins are a form of digital currency.   Basically, you buy them online and then use them to conduct business. Bitcoin enthusiasts are very excited about them because you don’t need a bank or other money trader (and their fees) to exchange them. It’s part of the “cut-the-big-banks-out” revolution that is, understandably, very popular right now. Drug and arms dealers love them because they also don’t like using banks (with those sticky rules about having to use an ID to open an account) and some online black markets have switched over to using bitcoins exclusively.

Does signing on an iPad count as a legal signature?

With technology changing at such a rapid pace, the question of what makes for a valid signature is really getting interesting. If you can sign a little screen at the grocery store then can you sign a contract on your iPad? In a word: yes.






In most states, if a court finds that your signature was intended by you to be valid it really doesn’t matter what form it took (e-signature, a scribbled “x”, a signature that someone signed on your behalf with your permission). This is because signatures in our country are generally judged on the signatory’s intention when she signed rather than the modality of the signature. It is also related to the fact that in the U.S. many types of agreements do not technically require any writing at all to be valid (but see here for my post on what types of contracts do need to be in writing and why the rest of them should be).






There are two major exceptions to this rather lackadaisical approach to signatures. The first is by agreement: people and businesses can contract to accept certain methods of signatures in their business relations. You could, for example contract to only accept “wet” signatures that are handwritten with a pen or to accept faxed signatures as originals. Because of this freedom to agree about what constitutes a valid signature, the many different companies you interact with may have different rules that you agreed to (I know you read every riveting page of that agreement with Visa you signed when you got your credit card).






The second major exception to the general rule of “it’s valid because it was meant to be valid,” is when a specific statute in your state says that certain types of agreements or documents have to have a witnessed, acknowledged, sworn under penalty of perjury, and/or wet signature. In many states, for example, the signature on a will must be witnessed by two people. The signature doesn’t have to be fancy, with certain exceptions an X will do, and the person (called a “Testator”) doesn’t even have to write the signature themselves (though, unless there is a Court order, they must at least be directing the writer to sign on their behalf), but two witnesses must witness someone actually signing and rules are rules— the signature isn’t valid otherwise.






But can the Testator and her witnesses sign on the a iPad? Funny you should ask. (Well, you didn’t really ask, but far be it from me to let truth get in the way when I’m attempting a pithy segue.) Recently, in Ohio, a judge ruled that a will written on a Samsung Galaxy tablet computer, because no paper was available, was valid. I don’t know of a similar ruling anywhere in California, but it’s bound to happen if it hasn’t already, as electronic signatures are becoming the norm in every other aspect of our lives. For now though, I would stick with a wet signature for such an important document.





For more information on what constitutes a valid electronic signature see the Uniform Electronic Transactions Act. Here are the cliff notes: under UETA, the term means “an electronic sound, symbol, or process, attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.” If that sounds pretty broad, it is. Also, just to save you the research time, I will let you know that is the same definition adopted by the U.S. ESign Act of 2000, which has been adopted in every state except New York, Washington State, and Illinois (and each of those states have their own electronic signatures statute). So, yeah, basically if you signed the contract on an iPad, you’re stuck with it.

DO I REALLY NEED AN AGREEMENT WITH MY BUSINESS PARTNER?

So you and your best bud came up with a fantastic mousetrap that will blow the competition out of the water.  There are stars in your eyes, there is a fire in your belly and, for the moment, you are thrilled at the way your best friend’s talents complement yours.  Sound familiar?  It is familiar if you’ve ever been in love.  And just like love, business partnerships start out with the biggest hopes, the strongest ideals and a rosy-hewed generosity between the parties that, well, you just never see again.  Okay, that was harsh.  I will amend that to say that it is rare to find two people who can sustain that level of expansiveness throughout the duration of a relationship.  If you form a for or non profit corporation you will have a board of directors to help arbitrate, mediate, etc. in case of a disagreement, but in a simple partnership you are one your own.  So do yourself a favor and take advantage of all that good will to put a solid partnership agreement in place.

SHOULD I GET A REVERSE MORTGAGE?

You are not sitting with this question alone. In these difficult times hundreds of thousands of Americans have seen their retirement nest eggs crash in value. Younger adults have time to reconfigure and recover before they will need those funds, but many retirees are scrambling to come up with money to pay the bills today. For those seniors who own their homes, the reverse mortgage is worth considering.

A reverse mortgage allows you, if you are 62 or older, to receive cash advances based on the equity in your home. This means a lump sum, monthly payments, or a line of credit depending on the terms of your loan. Generally, they are set up so you do not pay anything back until you sell your home, transfer title, leave your home for an extended period, move out or die.

DO I REALLY NEED ESTATE PLANNING IF I’M HAPPY TO LEAVE EVERYTHING TO MY SPOUSE AND CHILDREN?

State law provides a set of rules that apply when someone dies without a Will. In California, when a married person dies without a Will their “community property” (marital assets) will go to their spouse and their “separate property” (assets that belong to only them) will be divided 1/2 to their spouse and 1/2 to the child (2/3 to the children if there are more than one). Sounds great right? Who needs to write up a Will, or even worse, pay a lawyer thousands of dollars to do an “estate plan” when they’re happy enough to have the default apply?


Well, my friends, the devil is in the details with this one and when I mean details, I mean YOUR details. Your details may be pretty today. Let’s say (just for kicks) that you’re the "typical" American family: 2 healthy married adults madly in love, 2.5 cute kids with no disabilities (for now we’re going to say that your son’s unquenchable potty mouth is not early onset tourettes), a house with a white picket fence and no termites, and some big, fluffy, friendly-type dog that doesn’t shed but might lick you to death. Sound like you so far?

DO I NEED A PRE-MARITAL AGREEMENT IF I LOVE MY FIANCÉ?

What do you think it means to get married (or register as domestic partners)? Most people think that it is their very loud (and sometimes very expensive) way of announcing to the public at large that they won’t be sleeping around anymore.

Am I eligible for Medi-Cal? I need to go into a nursing home.

First, let me explain what Medi-Cal is:  Medi-Cal, California’s version of Medicaid, is a state and federal program that covers most nursing home costs for those who have low incomes or whose resources have been depleted by health care costs. For the majority of California nursing home residents — about 65% of them — care is paid for by Medi-Cal.

Medi-Cal does not cover the costs of care in a Congregate Living Health Facility, except for hospice care at the end of life.

Will I have to pay estate tax?

No, unless you are rich and the definition of rich, my friends, has drastically changed recently. Now, don’t get me wrong, I feel rich because I have a wonderful family that loves me, but strictly in dollars and cents, I am far from rich and as of January 1st 2013, so are you. 

Rich people, you see, have to worry about things like estate taxes and thanks to the Obama crew and your friendly Congressional members any couple who jointly owns less than $10.5 million is now completely exempt from federal estate tax (and in California there is no estate tax so you’re basically home free). That is ten and a half million folks! 

Who has that kind of money? Well you may think your neighbor does— we all tend to over estimate what the Jones actually have in their bank account, but I’m here to tell you that unless you live in Beverly Hills your neighbor is exempt from estate tax. According to the U.S. Census, in 2010 the median net worth for American families was around $57 thousand dollars. That is all your assets minus all your debts. In California, it was around $60 grand. Now, you might argue, the country was in recession in 2010 and things are perking up. My real estate agent swears it! Well, in 1984, when just about everyone agrees that times were great the median net worth was only $73 thousand. 

(By the way, the infamous 1%ers didn’t see that level of drop between 1984 and 2010. See here for a great article on how much wealthier they are than you, if you’re in the mood to get depressed or motivated for a revolution).

So maybe your neighbor is a little above the median. He drives a Lexus for goodness sakes. It doesn’t matter. 99.7% of Americans will not have enough net assets to pay federal estate tax. So the bad news? You’re not rich. The good news? Unless you live in one of the few states that has a state estate tax, that is one tax you don’t need to worry about! 

If you want to do more research on net wealth start at www.census.gov or read a great article on American wealth from that site here.

When will the Supreme Court Decide on Gay Marriage?

This is one of the biggest decisions of our time, right up there with Roe v. Wade and Citizens United in its far reaching ability to change the lives of Americans.  The Supreme Court could decide that any two consenting adults have the right to marry regardless of their gender.  Or they could choose any number of cop outs and not decide this issue at all or decide it against gay marriage.  But when?  Unlike some other courts, the Supreme Court doesn’t announce in advance which cases will be decided on a particular day.  The only time we have a good sense of what will be done on a certain day is the very last day, when the Court issues its final rulings.  And the Judges get to decide when the last day is!  However, if history is any guide the last day will probably be on June 26th or June 27th, as they like to break for vacation in July.  So, what is the answer?  Soon, we will know soon.

Who will know your password after you’re dead?

Should you put your internet passwords in your will?  No.  Your internet passwords do not go into your will, however, you do need to list them out on a paper that you keep near your will and other estate documents so the person who administers your estate can easily access your online accounts.  Here is a great article on the topic from the New York Times:


BOB GINSBERG, a retired production manager for an educational publisher, is worried that he does not know any of the logins and passwords for online accounts belonging to his partner or brother and they do not know his.  At 72, he said his concern was not about Facebook or e-mail. It was for their financial lives, which have migrated online, making paper account statements anachronistic. Now, when people die without disclosing their financial affairs to anyone, there is often no paper trail for heirs to follow. Full Story

What is Supplemental Security Income (SSI)? (And how do I get it!)

SSI is a cash assistance program for U.S. Citizens and some non-citizens who are age 65 or older, blind or disabled.  First the bad news, only those with limited resources can qualify.  The good news is that if you do qualify you will receive a monthly check and, in California at least, you automatically qualify for Medi-Cal and you may qualify for other benefits too like in-home supportive services.  If you think you might qualify apply at your local Social Security Administration Office.

SHOULD I MARRY MY BOYFRIEND OF TEN YEARS?

I can’t tell you how many times I’ve had to break the bad news that there is no common law marriage in California. For those of you who don’t know what that is, common law marriage is when simply living together for a certain amount of time and holding each other out to the public as married makes it so.
But it doesn’t in California. Here you must be married to have the rights of a spouse and they are important rights! Spousal support is the first thing, but it isn’t the last. Let’s say snookie-poo and honey-pie are living happily ever after. Who needs legal documents when you have love? They have some kids and snookie-poo decides to stay home for five or six years while the babies are young. After a couple of years they decide their little apartment is cramped and so they go house shopping. What could be more dreamy than two kids playing in the front yard of your very own home?