Q: My mother’s Revocable Trust states that her estate must be divided between her four adult children. She has now died, and each should receive about $150,000. The problem is one of my brothers is now disabled and is receiving SSI and Medi-Cal. If he receives this inheritance, it will disqualify him from his benefits and disrupt his life. Is there a way he can refuse the inheritance?
A: The answer is maybe. One way to accomplish this is by the use of a “disclaimer.” A disclaimer is a renunciation of one’s right to an inheritance. In order for a disclaimer to be effective, it must pass to the next person in line, without any direction on the part of the original beneficiary. The estate would be divided as if your brother had died before your mother.
Example: If your mother’s Trust had directed that if your brother died before she did, that his share would go to his children, then your brother could disclaim his inheritance and let it pass to his children. He could not disclaim in favor of the other brothers and sisters.
Another possible solution is to petition the Probate Court to allow the creation of a Special Needs Trust for the benefit of your disabled brother. Medi-Cal laws permits gifting of assets and still maintain Medi-Cal eligibility. Both these strategies requires the assistance of an estate planning attorney.
About the Author: Dustin MacFarlane, Esq.
California Licensed Attorney | Estate Planning Specialist
Dustin MacFarlane is the founder of California Probate and Trust, PC, with over 15 years of experience in estate planning, probate administration, and trust law. Licensed by the California State Bar, Dustin has helped thousands of California families protect their assets and plan for the future.
CA Bar License: Active | Practice Areas: Estate Planning, Probate, Trust Administration | Location: Granite Bay, CA
Why Estate Planning Matters in California
California has unique estate planning laws that differ significantly from other states. Without proper planning, your assets may not pass according to your wishes, and your family could face unnecessary probate court proceedings.
A comprehensive California estate plan typically includes:
- A revocable living trust to avoid probate
- Pour-over will as a safety net
- Advance health care directive
- Durable power of attorney for finances
- Beneficiary designations on retirement accounts and life insurance
How Trusts Work in California
California’s trust law (Probate Code Division 9) governs how trusts are created, administered, and terminated. Understanding these rules is essential for effective estate planning.
Key benefits of California trusts:
- Avoid probate: Assets in a properly funded trust bypass California’s lengthy probate process
- Privacy: Unlike wills (which become public in probate), trusts remain private
- Control: You maintain control during your lifetime and direct distribution after death
- Incapacity planning: Your successor trustee manages assets if you become incapacitated
- Tax planning: Trusts can help minimize estate and income taxes
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