Think about everything you own – perhaps you have personal possessions, savings bonds, real estate, life insurance, and financial accounts such as checking and savings, investment, and retirement accounts. Your physical personal possessions, such as your vehicles, furniture, clothing, jewelry, artwork, boats, collectibles, and other items are known as your “tangible personal property”.

Some tangible personal property is financially valuable – consider the countless stories you hear of a person discovering that the painting she bought at a garage sale is worth millions.

However, often the most significant value of tangible personal property is its sentimentalmeaning to you and your family. For example, your mother’s costume jewelry which you remember seeing her wear during special occasions. If you have siblings or other family who have similar emotions and memories attached to the same item, tangible personal property can quickly become a source of serious conflict between family members after death.

To avoid conflict that will damage the relationships between your surviving family members, speak with a qualified estate planning attorney to determine how you may best direct the distribution of your tangible personal property. One option is to identify and direct what happens with a specific item in your Will (and/or Trust). For example, the Will can state that your $3,000 statue is to be sold and the sale proceeds distributed equally among your children after your death. However, you must carefully consider whether disposing of your tangible personal property in your Will makes sense. If you later decide the statue should instead be distributed to your daughter, you will need to change your Will which will involve another trip to your lawyer’s office and another fee to make that change.

The better option is often to list specific items and their recipients on a tangible personal property memorandum. Under Massachusetts law, a memorandum that is incorporated by reference in the Will is legally enforceable even though it is a separate document from your Will and one that you can change on your own at any time. For instance, if you later prefer the statue to be distributed to your son instead of your daughter, you may update the memorandum yourself without the time and expense of changing your Will.

A third option is to distribute specific items of tangible personal property to the family member you wish to receive it while you are alive. Before doing this, consider whether you will miss the item, whether other family members will dispute that gift after your death (in which case you should document the transfer in writing), and whether you will be upset should the recipient decide to sell it or give it to someone else without consulting you.

Beyond the specific items you wish to distribute to certain recipients, it is important that your Will also describe what happens to all your other tangible personal property. For example, the Will may state that your other tangible personal property is to be distributed equally among your children. If your children do not want your remaining tangible personal property, your Will may direct your Personal Representative (Executor) to sell it, donate it to charity, and/or otherwise dispose of your tangible personal property.

A little inheritance planning goes a long way, especially after you are gone. At Samuel, Sayward and Baler LLC, we recognize the importance of maintaining family relationships, and look forward to tailoring your estate plan to fit your tangible personal property distribution wishes now and for the future.

May, 2019      

© 2019 Samuel, Sayward & Baler LLC

You may be asking yourself “What is a Continuing Care Retirement Community?” A Continuing Care Retirement Community (CCRC) is a community that consists of graduated levels of residential and health care options to accommodate elders who are looking to downsize but remain independent and ensure that their health care needs are met as they “age in place” in a familiar setting. Generally, a couple or single person’s financial and health eligibility are rigorously reviewed by the CCRC and a signed agreement outlining the terms of residency, services, fees, transfers between types of residency units, and other matters (Agreement), along with a large Entrance Fee deposit (similar to a security deposit from renters), are required to join a CCRC. Here are five things to consider if you are contemplating moving to a CCRC.

1. How are CCRCs Regulated?

There are currently about 30 CCRCs throughout the Commonwealth of Massachusetts. Under Massachusetts’ consumer protection law (G.L.c. 93, §76), CCRCs are required to disclose specific information regarding the terms of residency and services prior to or at the time the Agreement is signed or a deposit is paid, and to provide the same to the Executive Office of Elder Affairs (EOEA), which had made several CCRCs’  Agreements and other information available here. If a CCRC knowingly and willfully fails to disclose this information, the resident may recover damages, costs and attorneys’ fees, and in certain cases, a refund of the Entrance Fee, sometimes less certain costs outlined in the Agreement. However, in Massachusetts there is no state agency that has authority to oversee and enforce the CCRCs’ adherence to the statute.

2. I Meet the CCRC’s Financial Requirements – Does It Meet Mine?

Typically, a large Entrance Fee deposit is required to buy in to a CCRC, and each CCRC treats the manner by which the Entrance Fee may be utilized during your lifetime and the process by which it is refunded differently.  For instance, some Agreements state that the Entrance Fee may be used by the CCRC to pay your monthly expenses if your other methods of payment have been exhausted. Other Agreements state that you, or your family if you are deceased, will not receive a refund until a new resident buys in to the CCRC, unless you are willing to receive a greatly reduced refund. Yet other Agreements may link the Entrance Fee refund to your period of residency, which means the refund may be significantly less than the deposit you paid if you reside there for several years. Carefully consider the Entrance Fee refund provisions and decide if they are acceptable to you and your family when reviewing an Agreement.

Also pay attention to the financial strength of the company that supports the CCRC, especially if the Agreement makes it clear that your receipt of a refund is dependent upon the buy in of a future resident.  If the company declares bankruptcy, you may lose your entire refund.   The Commission on Accreditation of Rehabilitation Facilities (CARF) is a nonprofit accreditor of health and human services providers and provides a Guide to Understanding Financial Performance and Reporting in CCRCs on its website.

Another matter to consider is what happens if you no longer have adequate funds to pay your monthly expenses, especially if you are in the skilled nursing facility section of the CCRC. Carefully review the Agreement to determine if there are terms that explain the procedure by the CCRC to collaborate with you to pay your expenses, including applying for Medicaid benefits.  Most CCRCs do not accept Medicaid.

3. What Are the Monthly (and Other) Fees I Will Pay?

The CCRC should provide you with a detailed written description of the services included with the monthly fee you will be paying them as well as a list of fees for additional services.  For example, is transportation to local grocery stores, laundry services or light cleaning of your unit included in the monthly fee or are these additional fees? It’s a good idea to calculate the fees for the additional services you anticipate utilizing along with the monthly fees you will be paying.  Be aware that these fees generally increase annually.

4. What Happens If My Health Declines?

The major appeal of CCRCs is that you can remain within a familiar community that provides more residential and health care support if and when your health declines. Many Agreements include provisions that broadly describe the process, factors and decision-makers that influence when you may be temporarily or permanently transferred from an independent living unit to an assisted living unit or a skilled nursing facility unit or to another facility outside of the community if warranted. Some Agreements permit residents or their legal representatives to weigh in and appeal the decision to permanently transfer the resident to another unit while others do not. A move to assisted living or skilled nursing can significantly increase your monthly expenses.  Additionally, the decision to permanently move you to a potentially more expensive unit may be out of your hands.  Carefully consider the factors and individuals involved in deciding if you require transfer to another unit, and note whether the Agreement clearly explains the fees if your healthy spouse remains in your independent living unit.

5. What Else Is Important to Me?

Arbitration: Another part of a CCRC Agreement to consider is the arbitration/dispute resolution provision. Some Agreements state that any disagreement you have with the CCRC may only be resolved with arbitration and/or dispute resolution and not via the court.  This will limit your ability to pursue an outcome that may be more beneficial to you. Consider carefully if it is important to you to have all legal options available to you in the event the CCRC violates its Agreement with you.

Resident Rights: Beyond any rights described in the Agreement, residents may establish a residents’ association, submit comments to the CCRC regarding resident health and welfare, and request information about construction and the financial reserves of the CCRC under Massachusetts law. Think carefully about whether you will be comfortable with a limited ability to effect change within your community as a resident. Also keep in mind that you will be sharing common space with people that have different lifestyles from you; for instance, would you be bothered if your neighbor smokes cigarettes or has a noisy pet?

Activities: Review the activities, events and meal schedules of the CCRC and consider whether they appeal to you and fit your lifestyle.

For more information, an extensive consumer guide to questions and other topics for consideration regarding Massachusetts CCRCs can be found at the EOEA’s website.

If you are considering making a Massachusetts CCRC your future home and wish to better understand the terms and legal ramifications of the Agreement for you and your loved ones, contact an experienced elder law attorney to thoroughly review and discuss the Agreement with you.

Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is an active member of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA).  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020. 

February, 2019

© 2019 Samuel, Sayward & Baler LLC

In February, you’ll get tax forms – use them as an estate planning checklist for reviewing beneficiary designations.

By February 15, financial institutions will have sent you all the forms needed for your tax returns.  This nifty pile can help you review your beneficiary designations to make sure they are up-to-date. Beneficiary designations determine how retirement plans and life insurance proceeds will be distributed at death. Brokerage and bank accounts may also have beneficiary designations. Out of date designations may mean that assets go to the wrong people, and that’s just bad estate planning. You designated beneficiaries when you enrolled in your retirement plan. You may have filled out POD (payable on death) or TOD (transfer on death) forms when you opened investment or bank accounts.  Things to keep in mind in reviewing beneficiary designations are:

Your Designations May Be Wrong.  Life brings change, so it is wise to review your beneficiary designations and change them as needed.  Rules for retirement plans and remarriage are complex, and when the companies managing your assets merge, beneficiary designations may not transfer.  Review your designations when your marital status changes and when the institutions in charge of your assets change. Name contingent beneficiaries to receive assets in case primary beneficiaries do not survive.  Otherwise, these assets will need to be probated.

When providing for children or grandchildren, be thoughtful about the type of assets to leave them and the manner in which the assets will be distributed.  Do not name a minor as beneficiary.  Also, be cautious about naming a young adult as a beneficiary. Instead, create a trust for their benefit and name the trust as beneficiary.  Then, you can control when the child or grandchild can access funds. Contact a lawyer for wills and trust to discuss the right strategy for your children.

If a loved one has become disabled, you will want to change your designations to assure that you do not jeopardize that person’s eligibility for Social Security Supplemental Security Income (SSI). SSI provides income and Medicaid insurance to disabled people with less than $2,000 ($3,000 for a couple) in “countable resources.”  Inherited assets will be “countable resources” and jeopardize eligibility for benefits.  Instead, create a Special Needs Trust for the benefit of your disabled loved one and designate the trust as the beneficiary.

Your Designations Can Save Taxes. Retirement assets paid to an estate must be paid out within 5 years of death rather than over a named beneficiary’s lifetime. Name beneficiaries to save taxes! Life Insurance owned by a Life Insurance Trust can remove that asset from your taxable estate.  Finally, you can rollover or distribute your required minimum distribution to a charity and save income tax during life.

Your Estate Plan Needs Annual Exams.  Even if life has not handed you major change, review your beneficiary designations and make sure your loved ones know where to find important estate planning documents. Keep copies of your 1099 tax forms and use the contact information on the forms to call your financial institutions and check your designations.  Remember where you put your important documents and create a list for your family.

February, 2019

© 2019 Samuel, Sayward & Baler LLC

I recently read an article about a man in Washington who donated more than $11 million to several charities after his death via his Will.  It got me thinking about charitable giving and legacy planning, and when it’s a good idea to consider naming one or more charities as the recipients (beneficiaries) of your estate assets.

• When Charitable Donations Are Important to You.

If you regularly make gifts to one or more charities now, you may wish to consider donating to the same organizations after your death.  This can be achieved through setting up a Will or a Trust where you name the charities, the portion of your estate or the amount to be gifted, and specify the purpose for which you wish the gift to be used by the charity.

• When You Want to Reduce Taxes.

Most people know that if you donate money or assets to a qualified charity you are entitled to a deduction on your income tax return.  Similarly, if you leave money to charitable organizations at your death, your estate is entitled to a deduction equal to the value of the gifted assets.  For Massachusetts residents who have an estate in excess of $1 million, leaving money to a charity will reduce the estate tax that would otherwise be due.  Naming a charity as the beneficiary of an IRA or 401K plan doubles the tax savings since not only is there an estate tax deduction but no income tax will be owed by the charitable recipient when funds are withdrawn from the retirement account.

• When You Want to Leave a Legacy.

If you are able to make a significant gift to a charitable organization or you have the funds to establish your own foundation, then you can leave an estate planning legacy behind that will continue well beyond your lifetime.  A foundation is also an excellent way to involve family members in your pet charitable cause and to foster charitable giving values.

• When You Want to Control the Distribution of Your Estate.

In Massachusetts you are considered to have died “intestate” if you do not have a valid Will at the time of your death or if all of the beneficiaries named in your Will have predeceased you.  Massachusetts law will govern to whom your estate will be distributed if you die intestate. Under Massachusetts law, the beneficiaries of an intestate estate are determined by several factors, such as your marriage status and your surviving family members at the time of your death. For example, if you are a single woman with no children, your estate will be distributed to your surviving parents if you do not have a Will. If your parents predecease you, then it will be distributed to your surviving siblings, if any, and if none, your estate will be distributed to continually more remote family members. This may mean that a family member with whom you have a poor relationship or no relationship may inherit your estate.

If you have absolutely no surviving family members, under Massachusetts law your estate assets will be distributed to the Commonwealth of Massachusetts.  Designating a charity as the beneficiary of your estate in the event all of your beneficiaries have predeceased you will permit you to control that final distribution and prevent the Commonwealth from receiving your estate assets as a last resort.

At Samuel, Sayward & Baler LLC, we carefully consider your wishes, including your charitable intentions and your estate planning goals, and then develop a plan with you to ensure that your estate plan represents your wishes. Call us at 781 461-1020 to schedule an appointment to meet with one of our estate planning attorneys to talk about achieving your goals.

January, 2019

© 2019 Samuel, Sayward & Baler LLC

“We will be done with all of this soon, right?” That’s the question I often hear when working with a client who has been appointed as the Personal Representative (PR) of the estate of a loved one who has recently passed away. My answer is to view the administration of an estate as a marathon, not as a sprint. You will reach the finish line so long as you put one foot in front of the other, but it may take some time and there will be periods when more of your energy is required depending on the obstacles in front of you during the probate process.

The administration of an estate in Massachusetts typically takes a year or more.  One reason is that under Massachusetts law, creditors have one year from the deceased’s date of death to file a claim against the deceased’s estate for the payment of a debt owed to the creditor, such as an outstanding balance on a credit card. This often means that as PR you will need to carefully manage and hold the majority of the estate assets for at least a year before final distributions can be made to the estate beneficiaries (those inheriting money from the estate).

It will feel like much of your energy will be expended during the first few months of the estate administration when you are marshalling the assets of the deceased. While it may seem tedious and difficult to methodically discover, document, consolidate, and manage the assets of the estate,  you will be fulfilling your fiduciary obligations, and avoid liability to the beneficiaries and creditors of the estate for mismanagement. Your careful approach will benefit you later on when you easily handle other PR responsibilities, such as filing final personal income tax returns, estate tax returns, and fiduciary income tax returns.

All your hard work will pay off at the end of the estate administration process when you account to the beneficiaries by documenting the amounts received by the estate and the expenditures of the estate under your management, and the beneficiaries happily receive distribution of their inheritances from the estate.

Everyone tackles marathons differently, however, in all cases it is beneficial to have support and guidance; training is essential, too. At Samuel, Sayward & Baler LLC we are happy to run the marathon with you, providing support and guidance every step of the way through the probate process. Read more of our articles, attend our seminars, and do not hesitate to contact us when it is necessary for you to embark on the probate administration journey – it will seem like you are crossing the finish line in no time at all.

November, 2018

© 2018 Samuel, Sayward & Baler LLC

 

Summer is now in full swing after the end-of-the-school-year excitement and celebrations for recent high school grads!  Many parents will soon begin the process of preparing their young adult for college, including spending lots of time (and money!) at Bed, Bath & Beyond purchasing items for the dorm room, classes, and extracurricular activities.   In the frenzy of preparations don’t overlook the three legal documents that are vital estate planning for these young adults.  The basic estate plan for young adults should include a Durable Power of Attorney, a Health Care Proxy and a HIPAA Authorization.  These will ensure that parents have the legal authority to make financial and health care decisions for a child who is ill, injured, traveling, or residing outside of the country.

At Samuel, Sayward & Baler LLC we want to make it easy for our clients and their families to put these estate planning documents in place. After discussing this with your child, please contact Jennifer Poles at 781-461-1020 or poles@ssbllc.com to schedule a telephone call between your young adult and me. During the call, I will collect information, describe the documents, and guide your child through the necessary decisions. I will meet with your young adult to review and sign the documents. Mention that you read this article when you contact Jennifer and you will be entered into a raffle for a $100.00 gift card to help with some of those pre-college purchases.

Completing an estate plan before going to college is a tradition in my family – my grandfather had my mother complete an estate plan and my mother had me do the same when I was 18 years old.  I would be happy to assist you and your young adult with starting (or continuing) that tradition!

July, 2018

© 2018 Samuel, Sayward & Baler LLC

Upon receipt from the Court of the Letters of Authority appointing a person as Personal Representative (PR) of the decedent’s estate in an informal or formal probate, the PR has the authority to begin taking action with regard to the assets of the estate. These “probate assets” (owned in the decedent’s individual name which do not designate a beneficiary or co-owner) may consist of bank accounts, investment accounts, stock, savings bonds, tangible personal property (furniture, jewelry or a vehicle), and real estate. This article explores the initial steps to be taken by the PR to administer typical probate assets. The process of collecting the probate assets is known as “marshalling the assets.”

Investigate Financial Accounts and Other Assets

A PR’s first step is to investigate and determine the assets of the estate by reviewing the deceased’s files, mail and tax returns, and contacting an estate planning attorney with whom the decedent may have worked. The PR should contact the estate attorney who will guide the PR through the steps necessary to access each asset.

The PR should take steps to identify and safeguard the tangible personal property of the decedent. Some items require special treatment due to their nature. For example, firearms must be handled according to Massachusetts laws.  If the decedent owned a vehicle, the PR should maintain appropriate insurance on the vehicle prior to the distribution, transfer, or sale of the vehicle according to the wishes of the decedent.

Consolidate and Manage Financial Accounts and Other Assets

Once the PR has identified the financial assets, the PR often will consolidate cash assets into one estate account from which the expenses of the estate can be paid.

It is crucial that the PR keep detailed records. The records should include the assets in existence when the decedent died (and those that the PR learns no longer exist), their values, and the actions the PR takes with respect to each asset. Funds deposited in the estate account should be recorded along with estate expenditures such as bank account fees, legal expenses, real estate maintenance or cleaning fees, etc. Keeping detailed records from the beginning of the estate settlement process will assist the PR with the subsequent steps to complete settlement of the estate.

Each estate probate is unique. The assets differ, the family dynamics vary, and the wishes of the decedent must be followed. An experienced estate attorney will provide guidance that best suits the PR’s needs and the estate in question.

The next article will address the distribution of real estate through probate.

April, 2018

© 2018 Samuel, Sayward & Baler LLC

In 2012, the Commonwealth of Massachusetts adopted the Massachusetts Uniform Probate Code which outlines the laws and procedures for probate proceedings for deceased residents of the Commonwealth.  “Probate” is the administrative process by which assets of a deceased person’s estate are accessed and transferred to the recipients of those assets specified in the deceased’s Will, or if there is no Will, to the heirs of the deceased as determined by law. The person with authority to access and transfer the deceased’s assets is an appointed “administrator” of the estate called the Personal Representative, formerly known as the Executor.  Probate administration includes identifying all the decedent’s probate assets (known as “marshalling the assets”) and debts, filing taxes and paying estate expenses, and ultimately distributing the estate assets.

Probate typically takes at least one (1) year from the deceased’s date of death because creditors have that amount of time to file claims against the estate to collect on the deceased’s debt. Additionally, the complexity of the estate assets, expenses, and relationships between the surviving loved ones can lengthen the time it takes to completely administer an estate. Probate can be avoided through the preparation of an estate plan that best fits your needs and goals.

In general, probate assets are any assets (checking accounts, savings accounts, investment accounts, stock, savings bonds, tangible personal property such as furniture, jewelry or a vehicle, and real estate) owned in the decedent’s individual name which do not designate a beneficiary or co-owner.  In Massachusetts, the types of estate assets, their values, and the family dynamics inform which one of the three main avenues of probate are appropriate.

• Voluntary Administration:

Voluntary Administration is the simplest, quickest, and least expensive probate process. If a decedent’s estate consists of a vehicle and other tangible personal property and financial accounts valued at no more than $25,000.00 (in addition to the value of the vehicle), and all of the decedent’s loved ones are competent, reasonable, and communicative adults, then a voluntary administration is the favored option.  The appointed Voluntary Personal Representative has limited authority to receive payments of debts due the estate, access and receive the identified tangible personal property and financial accounts, and sell or distribute those estate assets after the payment of outstanding estate expenses and debts. A Voluntary Personal Representative does not have authority to administer real estate property. There is a filing fee of $115.00 to file the Voluntary Administration Statement with the Court.

• Informal Probate:

Informal Probate is the amenable “middle child” of probate and accommodates a wide variety of situations.  If the decedent’s estate is over $25,000.00 in value, the probate options are immediately narrowed to informal and formal probate.  Informal Probate is commonly a good choice if all of the decedent’s loved ones have those qualities mentioned above, the estate has a number or variety of financial accounts or similar assets, and when the estate owns real estate.  The appointed Personal Representative of an informal probate has full authority to take action in accordance with the laws of Massachusetts, which includes selling real estate. There is a filing fee of $390.00 to file the initial Petition for Informal Probate pleadings with the Court and obtain “Letters of Authority” appointing the Personal Representative.  Note that there are additional fees to publish notice of the pleadings in the decedent’s local newspaper as required under the laws of Massachusetts.

• Formal Probate:

Formal Probate is the most expensive process and takes the most time relative to the previous options. Formal probate is required if the estate owns real estate that is “registered land,” if an heir’s residence is unknown, or has since died or is incapacitated due to physical or mental disability. It may be warranted when the decedent’s loved ones have poor to nonexistent relationships, or in the event there are numerous or unusual estate assets to probate. The appointed Personal Representative has full authority to take action in accordance with the laws of Massachusetts, which includes selling real estate. There is a filing fee of $405.00 to file the initial Petition for Formal Probate pleadings with the Court and obtain “Letters of Authority” appointing the Personal Representative. Notice of the pleadings must be published in the newspaper at additional cost.

Note that the above filing fees do not include the fees to provide associated legal advice and preparation of the required probate pleadings.

If you are the loved one of a family member who recently passed away, it is important to carefully consider your family member’s assets and your family’s dynamics to determine the best avenue to properly probate the estate. Working together with a knowledgeable attorney to select the most beneficial option and navigate the probate process will ensure the process goes as smoothly, quickly, and cost-efficiently as possible.

November 2017

© 2017 Samuel, Sayward & Baler LLC

The most valuable asset many clients own is their primary residence and/or vacation home. One “tool” in the estate planner’s toolbox to effectively avoid the time-consuming and expensive probate process at an owner’s death is to transfer or “convey” real estate into a Trust. However, such a conveyance should be completed with caution to ensure that you are protected in the event a problem with the property’s title is encountered in the future.

One form of protection is title insurance. Title insurance provides coverage in the event title defects, such as a fraudulent conveyance or an unknown easement or lien, are discovered after you have purchased your property.  These title defects typically come to light when you are in the process of selling or refinancing the property.  If you obtained a mortgage when you purchased your property, it is likely that “lender’s title insurance” was purchased at the time on behalf of the mortgage company.  As the buyer of the property you had the option to purchase “owner’s title insurance.”  Owner’s title insurance is purchased by paying a one-time premium as part of the closing costs.  If purchased, you should have received an owner’s title insurance policy.  The purpose of title insurance is to provide you, as opposed to the mortgage company, with financial coverage if title defects are later discovered.

Some detective work on your part may be necessary to determine if: (1) you obtained owner’s title insurance when you purchased your property, and (2) if your coverage will continue after the property is conveyed into Trust, depending on the terms of the policy.

If you have an owner’s title insurance policy, the company should be contacted to confirm in writing that coverage will continue upon conveyance.  If coverage will not continue under the terms of the policy, an endorsement (or amendment) to the policy should be obtained that will add the Trust to which the property is being conveyed as an additional “insured” on the title policy, thereby continuing the title insurance coverage after the conveyance. Title insurance companies sometimes charge fees of $100-$300 to issue an endorsement to the policy.

Be sure to take the time to determine if you have owner’s title insurance, and if your coverage will continue prior to conveying your property into Trust – it will be well worth the time and effort involved. Ensuring your coverage will not be inadvertently terminated will save you, the Trustee of your Trust, or the Personal Representative of your estate significant aggravation and expense when the property is sold in the future in the event a title defect is discovered.

March 2017

© 2017 Samuel, Sayward & Baler LLC