Why do I need an estate plan?
A properly drafted and executed estate plan makes your wishes and decisions clear to your family, your physicians, your business partners, and the courts in the event of your incapacity or death. An effective plan saves your loved ones from the confusion and discord that can result when your wishes and decisions are not known.
With an effective plan in place, critically important decisions can be communicated clearly, such as who will make medical decisions on your behalf if you are unable, and who would care for your minor children in your absence. Property can be distributed in an orderly fashion and as you decide. Without an effective estate plan, many of these decisions will be made by application of the intestacy statutes, resulting in possibly unintended outcomes as well as additional uncertainty, stress and expense for your loved ones.
Everyone should have an estate plan, and it is especially important to establish or revise an estate plan after a major life event such as a marriage, birth of a child, major financial change or divorce. Many people are uncomfortable discussing, or even thinking about, these issues. However, the process of drafting and executing an estate plan can be handled sensitively and efficiently, and we all wish to spare our loved ones any additional burden.
What are the contents of an estate plan?
An estate plan typically consists of the following executed legal documents: a will; a durable power of attorney; a health care proxy; an advance directive; a HIPAA release; and a declaration of homestead. An estate plan may also include one or more trusts if appropriate.
In a will, you set forth how your personal property, financial assets and real estate will be distributed following your death. You can also nominate a guardian to care for your minor children if needed. Additional issues that can be addressed in a will include the selection of a Personal Representative and the continued operation of a closely-held business.
By a durable power of attorney you authorize an agent of your choosing to handle financial matters for you in the event you become incapacitated.
By a health care proxy you authorize an agent of your choosing to make medical decisions on your behalf in the event you become incapacitated.
An advance directive is a document setting forth your wishes regarding artificial life support in the event of terminal illness. Though advance directives are not enforceable in Massachusetts, many people choose to execute them to provide guidance to the health care agent in case such a situation arises. This can be particularly helpful if there is disagreement among your family members as to the proper course of action.
A HIPAA release refers to the Health Insurance Portability and Accountability Act, which protects the privacy of individuals’ health information. A release of this type authorizes one or more designated individuals, including the health care agent, to receive your otherwise protected health information.
Filing a written, executed declaration of homestead can protect your home from certain creditors up to the amount of $500,000.00. Under the current homestead law, you may have automatic homestead protection up to $125,000.00 without filing a declaration. However, you must affirmatively file a declaration to receive the additional protection.
A trust is a fiduciary relationship with respect to property, where one person holds legal title to property for the benefit of another person. Trusts can be a useful tool for a variety of purposes in estate planning including the financial care of minor children, protection of assets and minimization of estate tax liability.
What are estate and gift taxes?
Estate taxes exist on both the federal and state levels. The estate tax is essentially a tax levied on the privilege of transferring property at death. It is calculated based on the value of property in the decedent’s estate. Estate planning techniques are available to defer and minimize estate tax liability.
Gift taxes are imposed on the transfer of property of certain values by gift during a person's life.
What is probate or estate administration?
This is the process of administering a deceased person’s estate. Typically, this includes marshaling assets, paying debts and expenses, preparing applicable tax returns and distributing property to beneficiaries.
A properly drafted and executed estate plan makes your wishes and decisions clear to your family, your physicians, your business partners, and the courts in the event of your incapacity or death. An effective plan saves your loved ones from the confusion and discord that can result when your wishes and decisions are not known.
With an effective plan in place, critically important decisions can be communicated clearly, such as who will make medical decisions on your behalf if you are unable, and who would care for your minor children in your absence. Property can be distributed in an orderly fashion and as you decide. Without an effective estate plan, many of these decisions will be made by application of the intestacy statutes, resulting in possibly unintended outcomes as well as additional uncertainty, stress and expense for your loved ones.
Everyone should have an estate plan, and it is especially important to establish or revise an estate plan after a major life event such as a marriage, birth of a child, major financial change or divorce. Many people are uncomfortable discussing, or even thinking about, these issues. However, the process of drafting and executing an estate plan can be handled sensitively and efficiently, and we all wish to spare our loved ones any additional burden.
What are the contents of an estate plan?
An estate plan typically consists of the following executed legal documents: a will; a durable power of attorney; a health care proxy; an advance directive; a HIPAA release; and a declaration of homestead. An estate plan may also include one or more trusts if appropriate.
In a will, you set forth how your personal property, financial assets and real estate will be distributed following your death. You can also nominate a guardian to care for your minor children if needed. Additional issues that can be addressed in a will include the selection of a Personal Representative and the continued operation of a closely-held business.
By a durable power of attorney you authorize an agent of your choosing to handle financial matters for you in the event you become incapacitated.
By a health care proxy you authorize an agent of your choosing to make medical decisions on your behalf in the event you become incapacitated.
An advance directive is a document setting forth your wishes regarding artificial life support in the event of terminal illness. Though advance directives are not enforceable in Massachusetts, many people choose to execute them to provide guidance to the health care agent in case such a situation arises. This can be particularly helpful if there is disagreement among your family members as to the proper course of action.
A HIPAA release refers to the Health Insurance Portability and Accountability Act, which protects the privacy of individuals’ health information. A release of this type authorizes one or more designated individuals, including the health care agent, to receive your otherwise protected health information.
Filing a written, executed declaration of homestead can protect your home from certain creditors up to the amount of $500,000.00. Under the current homestead law, you may have automatic homestead protection up to $125,000.00 without filing a declaration. However, you must affirmatively file a declaration to receive the additional protection.
A trust is a fiduciary relationship with respect to property, where one person holds legal title to property for the benefit of another person. Trusts can be a useful tool for a variety of purposes in estate planning including the financial care of minor children, protection of assets and minimization of estate tax liability.
What are estate and gift taxes?
Estate taxes exist on both the federal and state levels. The estate tax is essentially a tax levied on the privilege of transferring property at death. It is calculated based on the value of property in the decedent’s estate. Estate planning techniques are available to defer and minimize estate tax liability.
Gift taxes are imposed on the transfer of property of certain values by gift during a person's life.
What is probate or estate administration?
This is the process of administering a deceased person’s estate. Typically, this includes marshaling assets, paying debts and expenses, preparing applicable tax returns and distributing property to beneficiaries.