Sat, 05 Oct 2024 17:11:48 -0700WeeblyThu, 09 Jun 2022 21:59:25 GMThttp://maestatelaw.com/blog/i-just-need-a-will-rightNew clients often tell me they just need a Will. A Will is a necessary document that serves a very important purpose, but on its own does not provide all of the protection and security needed by most individuals and families. Your Will should be part of a more comprehensive plan that meets your needs and goals.
 
Planning for Incapacity
           
Because a Will is only effective after death, it does nothing to protect you or your family if you become incapacitated. Other documents can be helpful in this regard. By executing a Durable Power of Attorney, you can authorize someone you trust to handle your finances if you cannot. Similarly, by executing a Health Care Proxy, you can authorize someone you trust to make medical decisions on your behalf if you cannot. Additionally, an Advance Directive (sometimes called a Living Will) allows you to express your wishes regarding artificial life support.
 
Designated Beneficiaries and Unintended Consequences
           
Among your most valuable assets may be retirement accounts and life insurance policies. Both allow for the designation of death beneficiaries. If your designated beneficiary is alive when you pass away, that person will inherit that asset, regardless of the terms of the Will. For this reason, it is very important to regularly check your designations. In particular, problems can arise following a divorce. After a divorce, Divorced Spouse A might execute a new Will directing all of his or her property to someone other than Divorced Spouse B, but if Divorced Spouse B remains a designated beneficiary on a retirement account or life insurance policy, then Divorced Spouse B will likely inherit that asset. A Will cannot prevent this from happening.
 
 Protecting Children’s Inheritances

Remember that the legal age of adulthood is 18, meaning that under a Will, a child could inherit large, valuable assets at a relatively young age. Many parents are concerned about the risks of youthful inexperience if this situation arises, but a Will cannot prevent this possibility. Another arrangement, such as setting up a Trust, could protect and manage funds for children until they reach a more appropriate age.
 
Reducing Estate Tax Liability
           
Under current law, most estates are not subject to federal estate tax, because individual estates worth less than $12 million are exempt. However, there is a separate Massachusetts estate tax that imposes liability for any estate worth more than $1 million. There are techniques available to reduce that burden, but they are not available with only a Will. To achieve this goal, a plan must include methods such as trust funding and planned gifting.
 
Avoiding Probate
           
Finally, a Will does not help to avoid the probate process. To the contrary, after death, a Will is filed at the Probate Court as part of the probate process. This court-supervised process is a slow, complicated and expensive one that lacks privacy. A more comprehensive plan that may include trusts, joint ownerships and designated beneficiaries will help to avoid probate.
 
The advice and guidance of a qualified estate planning attorney can help you accomplish any of these goals that are important to you.

]]>Thu, 25 Jun 2020 19:34:25 GMThttp://maestatelaw.com/blog/are-trusts-only-for-the-wealthy
By Jessica S. Batsevitsky
 
When I meet with clients, we often discuss whether one or more trusts might help achieve their estate planning goals. More than one client has remarked that he or she thought trusts were “only for the wealthy.” Media images of “trust fund babies” help to create this misconception.

So what are trusts, and are they really only for the wealthy?

A trust is a legal relationship. One person or entity (the “Settlor”) transfers property into the hands of another person or entity (the “Trustee”) to hold and manage the property for the benefit of a third person or entity (the “Beneficiary.”)

Trusts are useful tools whenever it is preferable to have funds held for another by a third party, rather than giving funds outright.

Examples include:

1. Placing inheritances into a trust for children, rather than giving them property outright, can protect funds from youthful inexperience or an expensive court-appointed conservatorship. A trustee can manage and spend funds on the children’s behalf until they reach an age when they are ready to manage significant amounts of money on their own. 

2. Transferring funds into a trust, rather than into a beneficiary’s individual name, may reduce the size of the beneficiary’s estate at death, resulting in less estate tax liability. 

​3. Funds held in a special needs trust can benefit a beneficiary with special needs without negatively affecting his or her entitlement to public benefits. 

Trusts are not only for the wealthy. Trusts can be helpful to individuals and families of many ages and income levels, in order to achieve various estate planning goals. A qualified estate planning attorney can help you to understand the benefits of trusts for you and your family.
]]>Mon, 08 Jun 2020 20:29:47 GMThttp://maestatelaw.com/blog/divorced-now-your-estate-plan-is-especially-important​By Jessica S. Batsevitsky
 
If you are divorced, it is especially important to re-visit your estate plan. In all likelihood, your former spouse is the primary beneficiary of your will or trust, and holds many important positions upon your death or incapacity. This is probably no longer appropriate.

The first question to ask, however, is whether there are limitations on your ability to change your estate plan.

Several factors might bring limitations:

• You may have entered a prenuptial or postnuptial agreement containing terms related to your estate planning.

 

• While a divorce action is pending in Massachusetts, an automatic temporary restraining order is placed on the assets of both parties.

 

• Your divorce agreement or judgment may contain requirements related to your estate plan, such as a requirement to maintain a life insurance policy for the benefit of your former spouse and/or children.

 
If it is permissible to proceed, revising your estate plan can help ensure that your interests are protected in case of your incapacity, and your loved ones are cared for in your absence.

Questions to consider include:

• Who will make medical and financial decisions on your behalf if you become incapacitated?

 

• How should your property be divided and distributed when you pass away?

 

• Who will hold and manage funds for your children if they are minors when you pass away?

 

• Who should serve as your minor children’s guardian if you and your former spouse are both deceased?

 
A Massachusetts law revokes certain transfers to spouses, and appointments of spouses to fiduciary positions, after divorce. However, reliance on this law alone is not recommended. When the law applies, it could leave holes in your estate plan after a former spouse is removed. Worse, in some cases, is that the law might not be uniformly applied to all of your assets.
 
Pay special attention to the death beneficiary designations on your retirement plans. Many people neglect to update these designations following a divorce, so the former spouse remains the designated beneficiary. Some administrators of retirement plans take the position that, under federal law, they are required to pay proceeds to whomever is designated on the plan, even if there has been a divorce, and even if state law holds otherwise.

​An experienced estate planning attorney can help you through the process of creating an estate plan that fits your new circumstances. This can help you find peace of mind in knowing that people you trust are empowered to act on your behalf if needed, and your loved ones will be cared for in your absence.]]>Thu, 28 May 2020 17:01:11 GMThttp://maestatelaw.com/blog/what-is-probate-anyway-and-why-am-i-supposed-to-avoid-itBy Jessica S. Batsevitsky
​
     Over the years, I have met people who tell me they have no idea what probate is, but they’re pretty sure they’re supposed to avoid it. So what is probate and why is it so scary?

     The term “probate” simply refers to the court-supervised process of administering a deceased person’s estate (i.e. paying debts and distributing property). There might be a Will, or there might not be a Will, but either way the process is supervised by the Probate Court. The “supervised by the Probate Court” part is what many people wish to avoid, but why?

     First, the probate process is expensive. Most families must hire a lawyer in order to help them understand how the process works and what they need to do. There are also filing fees and other associated expenses.

     Second, the probate process can be slow. Court action might be necessary before a family can take an important step, such as selling the deceased person's house, and delays often happen.

     Third, the probate process lacks privacy. If there is a Will, it must be filed in Probate Court where it becomes part of the public record. Anyone who appears at the Probate Court and requests the file can review the Will, along with other paperwork filed with the Court that may describe the deceased person’s assets and what those assets are worth. 

     Finally, the probate process may leave an estate more vulnerable to claims by discontented parties and creditors.

     So how can your family avoid probate? The probate process is necessary only when a person dies owning property in his or her individual name only. The right combination of trusts, joint ownerships and death beneficiary designations can help families avoid the need for probate, but to avoid missteps, this type of planning should be done with the help and advice of a qualified estate planning attorney.]]>