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Changing Beneficiaries in a Revocable Trust After Death

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.