I just finished reading Paul Newman’s will.  You can too by going to the website Radaronline.com.  Mr. Newman signed his will on April 11, 2008 and passed five months later on September 26.  As an estate planning attorney who probates many estate annually it is always interesting for me – maybe not for most others – to read the work product of other attorneys who practice in the same area of the law as I do.

A couple of things caught my attention.  One is that Mr. Newman’s will never directly mentions the names of his children (he left 5 daughters).  Second is that very early in his Will he indicates what is to happen to his airplane and race cars (they are to be sold with the proceeds distributed to his trust) and his Oscars and other theatrical awards (which are left to Newman’s Own Foundation).  Third, I read that one of his co-executors lives in Manhattan Beach, California which is where I reside.

Newman did have a Living Trust (“the Amended and Restated Newman Living Trust Number One”), but his Will is very specific concerning the distribution of many of his assets.  It is unclear whether a lot of his assets will be subject to probate or if in fact they were owned by his living trust. 

It is rare in California that a will executed in the last fifteen years has as much detail as Mr. Newman’s.  Most people who do estate planning in California save the details for their living trust and the will is much more general.  Therefore, the public generally knows less as a result of the filing of a will in probate court.

Probate proceedings take many forms.  The laws and procedures vary from state-to-state.  Thus, when someone calls me and asks me a question about someone who died in a state other than California, I quickly tell them that I am not qualified to answer their question.  In California, our probate procedures do not provide for the judge to administer the estate. 

While I do not know the law in Alabama, I have been reading about the case of a Covington County probate judge who has recently been convicted on theft by deception and ethics charges. Specifically she was convicted of stealing 1.8 million dollars from an estate with no heirs.  Witnesses testified that she put the money in a personal account instead of a public account.  Moreover, there was testimony that she made withdrawals to buy an expensive car, a truck and to pay off mortgages.

In California, the administrator or executor of the estate is in control of the assets of the estate.  Only that individual has the legal ability to handle the estate assets.  This is not to say that there are not unscrupulous administrators or executors.  Frequently, but not always, the probate judge requires them to post a bond.

The Judge in the Alabama case was sentenced to three years in prison and is currently a free woman because she posted a $20,000 appeal bond.  The lesson to learn is that beneficiaries of probate estates ideally should be aware of the status of the probate proceedings.

In California we are very fortunate.  Our probate courts have some very exceptional judges and people assisting them in one way or other.  In our larger counties, including Los Angeles County, we have judges that are full-time probate judges.  Probate judges do more than just decide cases involving the distribution of the assets of a decedent.  They also hear cases concerning the administration of trusts, conservatorship cases, guardianship cases, elder abuse cases, petitions regarding specific medical treatment, petitions to establish the fact of birth, marriage or death and even tuberculosis-detention proceedings among others.

The probate judges cannot do it all by themselves especially in the large counties.  While the number of cases a judge hears is obviously smaller in Alpine County (population 1,208), Sierra County (population 3,555), Modoc County (population 9,449), Mono County (population 12,853), Trinity County (population 13,022), Mariposa County (population 17,130), Colusa County (population 18,804), or Plumas County (population 20,824) than it is in Contra Costa county (population 948,816), Sacramento County (population 1,223,499), Alameda County (population 1,443,741), Riverside County (population 1,545,387), Santa Clara County (population 1,682,585), San Bernardino County (population 1,709,434), San Diego County (population 2,813,833), Orange County (population 2,846,289), and Los Angeles County (population 9,519,338).

In the larger counties, there are some combination or all of the following: probate examiners; probate investigators; probate attorneys; and research attorneys.  For example, Aviva Bobb the Supervising Judge of the probate departments of Los Angeles County has written that for the Los Angeles central district (the largest courthouse for Los Angeles County) the court has a staff of 19 probate investigators, 14 probate attorneys, 1 research attorney, and 8 probate examiners.

Obviously, in the smaller counties, the judges hear cases in a variety of areas of the law.  However, because the probate process in California is similar throughout the state, the judges hearing probate cases become very expert in those counties as well.

By some estimates, there are over 2,000,000 children between the ages of 5 and 15 in this country with a disability.  In fact, approximately 30% of that group, or more than 600,000 people, have two or more disabilities.

Parents of special needs children need to seriously think about doing long range planning and consulting with an experienced estate planning attorney when preparing their estate plan including their living trust.

Life insurance is certainly something that an estate planning attorney can and should discuss with the parents of a special needs child.  The reason that parents want to discuss with an estate planning attorney is that life insurance proceeds can theoretically disqualify an individual from federal assistance.  Inheritances can affect eligibility for programs offered by the state of California. Moreover, an inheritance of greater than  $2,000 can disqualify a recipient from federal assistance including Supplemental Social Security (SSI) for up to three years.

 In the event a special needs trust is correctly set up for the special needs beneficiary, the beneficiary remains eligible for assistance.  In this way the trust can be utilized to pay for things such as rehabilitation, entertainment, trips, home health aides, etc.

Used correctly, life insurance may be a great source of funding a special needs trust.  Parents should consider term life, whole life, and second-to-die.  Each has its advantages and disadvantages when used in this context.

For  more information, contact an estate planning attorney who has experience in this area and understands how to create a special needs trust within a living trust.