Protect your family, assets, and preserve your legacy.
Choosing an estate planning attorney is a fundamental decision. You are essentially planning how your assets are managed and distributed during incapacitation or after your death. There are many benefits to working with an estate planning attorney. One of the most important aspects of estate planning is leaving a legacy to your family. A qualified attorney can make sure that your wishes are carried out after your death in a respectful and honorable way. You can never be too prepared when thinking about how your assets will be handled in the future. Establishing a will, trust, or other entity for asset protection may help you manage your holdings and ensure they are properly handled after your death. No matter how complex or straightforward your estate may be, you and your family can benefit from a solid estate plan.
How Can Estate Taxes Affect Me?
Taxes are one of the biggest concerns for many people when they are structuring an estate plan. Few people know how to minimize taxes on their estate and are often left unprepared. This is why working with a knowledgeable attorney in the field is so important. With all the different changes in tax laws across the country, working with an knowledgeable attorney can help you answer questions particular to your personal situation.
One mistake that many individuals make is trying to liquidate their assets as soon as possible when setting up an estate plan. However, this can have many tax repercussions later on in the year; it could also eventually affect your loved ones or your intended plan for your estate. Instead of trying to sell everything off, it is important to think about the tax consequences before executing a plan. For example, you may be able to establish a trust, which can minimize your tax liability.
How Should I Handle My Investments?
For many people, establishing how to distribute various investments is the main challenge of an estate plan. Some investments are not as liquid as others. For example, if you want to leave an investment property to your children, then you must make sure you understand that there are certain costs associated with selling the property. If your beneficiaries may not have the time or resources necessary to prepare and sell an investment property, then you may wish to make other arrangements.
Additionally, not all families are fully equipped to manage an estate on their own, so you may want to consider having an attorney who can handle these responsibilities in the future. An estate planning attorney can walk you through the process of managing investments during probate or trust administration so that you know what your family can expect. This is a stressful time for any family to go through. Not only do they have to deal with the death of a loved one, but they also have to make major financial decisions that could greatly impact their future.
This is one of the reasons why it is so important to plan your estate before you pass away. Doing so will likely prevent disputes from occurring later on in the process. Little is worse than fighting over an inheritance once someone passes away.
In the coming years, this is a field that is going to continue growing. Tax laws are only going to get more complex, and many people may struggle with this process without professional help. Hiring professional help is a great investment, especially if you have a large estate to manage. Now is the time to start planning this process for your family.
Estate Planning FAQs
Most people do not think of themselves as having an “estate,” thinking that the term is reserved for only the highly wealthy. But it is simply a term that refers to the assets you own, including your interests in all real and personal property. In this sense, everyone has an estate. “Estate planning” involves implementing strategies so that your wishes are carried out in the case of your disability or death. Among other things, estate planning involves putting in place decision makers to handle financial and medical decisions when you are unable and directing your assets to your intended beneficiaries following your death in a manner that minimizes such things as taxes, state reimbursement for nursing home fees, and settlement costs.
The failure to engage in estate planning can have costly and devastating consequences. Unfortunately, many people believe that if they get sick their spouse can handle everything and if they die, their assets will automatically go to their spouse and children. While there are certain default laws that apply where there has been little or no estate planning, failing to take appropriate steps in advance can lead to many unintended consequences, such as losing significant assets to the nursing home or taxation as well as litigation among family members.
As noted, your estate includes everything you own. While certain things are obvious, like real estate and personal property (bank accounts, clothes, jewelry, etc.) other interests are also included in your probate estate at death, interests that are less apparent, such as your share of ownership in a business, the value of retirement plans and insurance policies, intellectual property, and possibly assets held in a trust you created, depending on the authority you have over the trust.
Every estate plan is different and depends on the individual’s goals as well as family dynamics, so it is difficult to generalize. However, a number of estate plans require HIPAA waivers, healthcare proxies, and durable powers of attorney to facilitate financial and healthcare decision if you become incapacitated, and wills to dispose of your assets upon death. Some individuals may also benefit for the establishment of living trusts. Living trusts are more likely to be recommended where there are tax issues, minor beneficiaries, and in the case of blended families.
If you die intestate (without a will), Massachusetts statutory law will determine who receives your property by default. Typically, the distribution is to your spouse or children, or if none, to other family members. The statutory plan may or may not reflect your actual wishes. A will allows you to change the default statutory distribution scheme to suit your wishes, as well as to make a number of personal decisions to suit your objectives that the default provisions cannot address.
A will provides for the distribution of certain property owned by you at your death, and generally you may dispose of such property in any manner you desire, a major exception being statutory law that prohibits the disinheritance of a surviving spouse. Your will does not govern the disposition of your property that is controlled by titling, beneficiary designations, or payable on death designations. These assets pass automatically at death to those designated.
A will must be signed in the presence of at least two witnesses and certain formalities must be followed or the will may be found to be invalid. A will that is formally executed in front of at least two witnesses with all signatures notarized is deemed to be “self-proving” and may be admitted to probate without the testimony of witnesses or other additional proof. Even if a will is held to be valid in spite of errors in execution, such a challenge can be costly and difficult, and it is best avoided in the first instance by proper execution. In Massachusetts, a will may refer to a memorandum that distributes certain items of tangible personal property, such a furniture, jewelry, and collectibles, that may be amended without the formalities of a will.
If you own property with another person as joint tenants with rights of survivorship, or in the case of married couples, as tenants by the entirety, that is, not as tenants in common, the property will pass directly to the surviving joint tenant upon your death and will not be part of your probate estate or governed by your will (or the laws of intestacy if you die without a will).
A trust is a legal arrangement that can provide flexibility for the ownership of certain assets, enabling you and your heirs to achieve a number of goals that cannot be achieved otherwise. The term trust describes the holding of property by a trustee in the accordance of the provisions of a contract for the benefit of one or more persons called beneficiaries. The trustee is the legal owner of the trust property, and the beneficiaries are the equitable owners of the trust property. With certain trusts, a person may be both a trustee and a beneficiary of the same trust. In other types of trusts, the roles must be held by different entities or people.
A trust created during lifetime (a “living” or “inter vivos” trust) may be revocable, which means it can be revoked or changed by the settlor (the trust creator), or irrevocable, which means it cannot be changed by the settlor. Revocable trusts are commonly used to preserve assets from estate taxes or to avoid probate. Irrevocable trusts are commonly used for asset protection and to preserve assets from nursing home costs.
A testamentary trust is a trust created by a will. In Massachusetts, assets left to a surviving spouse by way of a properly drafted testamentary trust are not subject to the Medicaid/MassHealth five-year lookback period applicable to nursing home benefit applications.
Advance directives are legal instruments that appoint someone to make decisions on your behalf. With respect to healthcare decisions, a health care proxy appoints someone to make health care decision for you in case of incapacity. Similarly, a durable power of attorney appoints someone to make financial decisions on your behalf and can be useful if you become incapacitated and your family needs access to your assets.
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