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Estate
Planning
We offer estate planning services
tailored to meet the special needs and objectives of
each client.
Some
of the most common estate planning tools include:
Wills
Trusts
Durable Power of Attorney
Advance Health Care Directive
Homestead Protection
We take particular pride in drawing basic estate plans
for young families and couples to protect and provide
for their children. We also work closely with financial
planners who can offer further protection in the form
of life insurance, or assist you with general financial
growth.
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Frequently Asked Estate Planning Questions:
What is a will?
What is estate planning?
Does a will control distribution
of all of my assets?
Is a handwritten will valid?
What is a living trust?
What is a trustee?
What are the advantages of a
living trust?
How does a living trust avoid
probate?
Does a living trust save estate
taxes?
Does a living trust change my
income and property taxes?
What is estate planning?
Estate Planning is the
process by which people develop a plan that ensures
that the assets they have accumulated during their lifetime
are protected and distributed to those they love. Although
many people use the phrase "estate planning"
to refer to creating a trust or will, the process actually
involves much more. A comprehensive estate plan addresses:
Management of your assets, if you become unable to
do so for yourself
A method for making medical and personal care decisions
for yourself and your minor children, if you lose the
ability to make such decisions yourself
The distribution of your assets to your beneficiaries
after your death
Minimization of the administrative and tax costs of
transferring your assets to your beneficiaries
What is a will?
A will is perhaps the most common estate planning document,
and the one with which most people are familiar. A will
is a legal document that directs distribution of your
assets to your beneficiaries. In addition, your will
also identifies the Executor you have selected. The
Executor manages and distributes your estate after your
death. MOST IMPORTANTLY , your will may also name a
person to care for your children, if any of your children
are still minors at the time of your death. That person
is called a guardian.
Does a will control
distribution of all of my assets?
Generally, your will only controls distribution of
assets that you own that are titled in your name alone
at the time of your death. Common assets that are not
controlled by your will include retirement plans, joint
tenancy assets, "payable-on-death" assets,
and life insurance. Each of these is discussed below.
Retirement Plans
Investments you hold in an IRA, a 401(k), a 403(b),
or in other qualified retirement plans are distributed
to the person(s) you have named as beneficiary in the
plan documents, regardless of what your will might otherwise
direct. Your will controls distribution of retirement
benefits only if you have not named any beneficiaries
in the plan documents, or if the beneficiaries you have
named in the plan documents die before you die, or if
you name your estate as your beneficiary in the plan
documents. The last scenario-naming your estate as your
beneficiary-may create serious negative tax consequences
for you. Accordingly, you should only name your estate
as beneficiary of your qualified retirement plans after
consulting with a qualified professional to advise you
on the tax consequences.
Joint Tenancy Assets
Assets you own with another person as a joint tenant,
such as real estate, bank accounts, automobiles, and
securities, will pass to the surviving joint tenant
upon your death. The provisions of your will control
distribution of joint tenancy assets only if you are
the last of the joint tenants to die. However, if you
jointly own property with another person as tenants
in common, rather than as joint tenants, your will controls
distribution of your interest in the property (but not
the interest of the other owners) regardless of whether
you die before or after the other joint owners die.
"Payable on Death" Assets
Some bank account, securities accounts, and U.S. Savings
Bonds may be held with a beneficiary designation such
as "payable on death" (i.e. "POD").
Bank and securities accounts may also carry the designation
"In Totten trust For" (i.e., "ITT For")
or "Transfer on Death to" (i.e., "TOD").
These assets will pass pursuant to those designations,
and not according to the terms of your will, unless
the designated beneficiary dies before you die. If the
designated beneficiary predeceases you, your will controls
distribution of such assets.
Life Insurance
Insurance proceeds on your life are paid to whomever
you have designated as beneficiary of the policy in
the form you file with the insurance company. If all
of the persons named as you beneficiary die before you
die, the proceeds will be paid to the person(s) as set
forth in the boilerplate language of the insurance contract.
Most insurance contracts direct for payments to your
estate when all of your beneficiaries die before. In
such case, your will controls distribution of the proceeds.
Is a handwritten will valid?
Massachusetts law states that any person 18 years or
older may make a will. The will must be in writing and
signed by the testator or signed by another person in
the testator's presence and under the testator's express
direction. At least two competent witnesses must attest
to the fact that the testator has published the will
as his or her own and sign the will in the testator's
presence. G.L. c. 191, § 1. A written will recorded
in conformity with either the law of place of execution
or the law of the testator's domicile will be valid
in Massachusetts. G.L. c. 191, § 5.
A holographic will is a will entirely written and signed
in the handwriting of the testator without attesting
witnesses. Such wills are not valid in Massachusetts.
What is a living
trust?
A living trust, or inter vivos trust, is a legal entity
that you create during your lifetime to hold your assets
for your benefit while you are alive. Following your
death, your living trust directs distribution of your
assets to your beneficiaries.
What is a trustee?
Trustee refers to the person who manages your trust.
Usually you name yourself as the trustee of your living
trust. You also name the trustees you wish to serve
if you are unable to serve as trustee because of sickness,
incapacity, or death.
The trustee has authority to manage and control the
assets held in the trust. However, the trustee may not
use trust property for his or her own benefit. The law
requires the trustee to follow the terms of the trust
and to use trust property only for your benefit during
your lifetime and for the benefit of your beneficiaries
after your death. A trustee must account to you while
you are alive and account to your beneficiaries after
your death.
What are
the advantages of a living trust?
Living trusts afford several benefits, including:
Management of Assets During Incapacity without a Conservator
A living trust provides for the management of your
assets during your lifetime if you loose capacity to
manage for yourself. If you become incapacitated, the
person you have named as successor trustee can usually
assume responsibility for your assets and manage them
for your benefit without the appointment of a conservator
by the court.
Avoidance of Probate
After your death, your successor trustee pays your
debts, claims, and taxes, and then distributes your
assets to the persons you have named as your beneficiaries
in your living trust. The successor trustee is able
to settle your affairs usually without court supervision
and without the need for appointment of an Executor
by the court.
Privacy
Because creation and proper funding of a living trust
generally precludes the need for court intervention
during your incapacity and after your death, your finances
and estate plan never become public.
How does a living
trust avoid probate?
When you die, assets titled in your individual name
are generally subject to the jurisdiction of the probate
court. The court usually supervises the payment of creditors,
inventory of assets, sale of real property, and distribution
to beneficiaries. This usually translates into significant
costs and expenditure of time.
By contrast, a living trust avoids some of the expenses
and delays associated with probate administration. Assets
held in your individual name at the time of your death
are subject to the jurisdiction of the probate court.
Assets held in your living trust are not. Therefore,
if you transfer title to virtually all of your assets
into your living trust while you are alive, the probate
court will not have jurisdiction over your estate when
you die. In other words, when you die, you leave nothing
to probate because your assets are "owned"
by your living trust.
Because assets held in a living trust are not subject
to probate administration, the person administering
your estate after your death does not need to file a
petition with the court and wait for appointment at
the court hearing several weeks later before acting
to settle the estate. Instead, the person administering
your estate, called the successor trustee, can assume
control of your trust immediately upon your death. The
successor trustee can begin payment of debts and taxes
at once. Further, the successor trustee often can make
distribution to your beneficiaries more readily than
a court-supervised executor can.
Does a living trust
save estate taxes?
No. Creating a living trust does not, in and of itself,
save estate taxes. A living trust may contain provisions
that postpone, reduce, or even eliminate estate taxes
at your death. However, these same provisions can be
included in a will.
Does a living trust
change my income and property taxes?
No. Creating a living trust has no effect on your income
tax liability during your lifetime.
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