Attorney Maria Baler discusses Planning for Blended Families and Non-Married Partners, for our Smart Counsel for Lunch Series. Please watch and if you have any questions or want to learn more please call us at 781 461-1020.
A Christmas Message, Your Video Ideas, and gives a Gift Tax Exemption Reminder
Attorney Maria Baler discusses a Christmas message, your video ideas, and gives a gift tax exemption reminder, for our Smart Counsel for Lunch Series. Please watch and if you have any questions or want to learn more please call us at 781 461-1020.
Five Things Your Estate Plan Allows You to Be Thankful For
Estate planning is hard. Discussing topics like incapacity, death and taxes are unpleasant. It’s the reason why an estimated two-thirds of Americans do not have an estate plan. But like many hard things, after it is done there is a sense of accomplishment and relief, and in many cases gratitude. Estate planning may be something you have been putting off for years, if not decades. Getting it done is a great feeling, and something that benefits not just you but your loved ones. Estate planning is an essential aspect of financial well-being and ensuring that your assets and loved ones are protected. Here are five things to be thankful for when your estate plan is done.
1. Peace of Mind
One of the most significant benefits of estate planning is the peace of mind it provides. Knowing that your affairs are in order and that your loved ones will be taken care of in the event of your passing can be a great source of comfort. For families with minor children, estate planning means you have put in place a plan for your children to be taken care of by someone you choose if you pass away while they are still young. It also means that you have created a trust so inherited assets can be managed for young children until they are mature enough to take control of those assets themselves. Estate planning minimizes the potential for family disputes over assets, designates decision-makers of your choice, and makes the difficult process of grieving much more manageable for your heirs.
2. Control Over Your Legacy
Estate planning allows you to have control over your legacy. You get to decide how your assets will be distributed, who will receive them, and under what conditions, and who will oversee that process. Holding assets in trust for minor children or a beneficiary with special needs is important. It may also be important for older children for whom asset protection is a concern due to an unstable marriage, a pattern of mismanagement of assets, profligate spending, creditor issues, gambling issues or substance abuse. This control ensures that your assets are used in a way that aligns with your values and priorities. Whether you want to support your family, friends, favorite charities, or any other cause close to your heart, estate planning allows you to make that happen.
3. Tax Efficiency
Effective estate planning, especially in a state such as Massachusetts with a separate state estate tax, can reduce the tax burden on your estate, leaving more of your assets to your loved ones. By using strategies like trusts, gifts, and other tax-efficient mechanisms, you can maximize the wealth you pass on to the next generation. If you have a large IRA or other tax-deferred retirement plan, the estate planning process will help you understand how the income tax on these assets will impact you and your heirs. You will be thankful for the opportunity to minimize the impact of these taxes on your estate and your heirs to ensure that your beneficiaries inherit as much as possible.
4. Smooth Transition of Assets
The estate planning process starts with compiling information about the assets you own, how they are owned, and how beneficiaries are designated. Creating such an inventory and keeping it up to date will go a long way toward helping the people who are implementing your estate plan carry out their duties efficiently. Ensuring your assets are owned properly and beneficiaries are designated appropriately and consistent with your plan is an important part of estate planning and will ensure your plan works as intended. In Massachusetts, where the probate process can take a year or more to complete, the use of Trusts in an estate plan can avoid the probate process and allow for immediate access to assets at death. This means that your beneficiaries will receive their inheritance more quickly and with far less delay and frustration. The ability to provide a seamless transfer of wealth will give you peace of mind and will be a source of gratitude for your heirs after your death.
5. Your Team
It takes a village, as they say, and estate settlement and trust administration is no exception. If planning is done properly, an important part of the legacy you leave will be a team of advisors – your estate planning attorney, your accountant and your financial advisor – who will guide and advise your family after your lifetime while ensuring your estate plan is carried out according to your instructions. Introducing your family to these team members while you are alive can ensure an even more seamless transition. You will be thankful for the guidance your team provides you during your lifetime and will have peace of mind knowing they will be there to guide your family after your death.
Estate planning offers peace of mind, control over your legacy, tax efficiency, a smooth transition of assets, and a team that will guide you and your loved ones through whatever the future brings. If you have not already created your estate plan, start the process. If you have an estate plan in place, make sure it is up to date. And while you are planning, be thankful for the opportunity estate planning provides to secure your family’s future, provide for charitable causes, and make your passing more manageable for those you leave behind. Your heirs will certainly thank you after you’re gone.
Maria C. Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), and the former President of the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, visit www.ssbllc.com or call (781) 461-1020. 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.
November 2023
© 2023 Samuel, Sayward & Baler LLC
Updates to the Massachusetts Estate Tax Exemption
Attorney Maria Baler discusses Updates to the Massachusetts Estate Tax Exemption, for our Smart Counsel for Lunch Series. Please watch and if you have any questions or want to learn more please call us at 781 461-1020
Read some of the Frequently Asked Questions about Updates to the Massachusetts Estate Tax
Community Resources Smart Counsel Webinar from September 14th
Our latest Smart Counsel Series Webinar took place on Thursday, September 14, 2023, from 6:00p.m. to 7:30 p.m. virtually via Zoom, and was hosted by Attorney Maria Baler who moderated a panel on community resources. Our local cities and towns and regional organizations offer a wealth of programs, resources, and assistance to residents.
These include educational, wellness and social programs, home care services, caregiver support, Medicare counseling, assistance with money management, and providing veterans with assistance to gain access to health care and financial benefits that may be available to them. Many residents are not aware of the availability of these resources until they are in need. This webinar explored these resources in detail. Watch the webinar to learn more about what is available and how they can be accessed.
We were delighted to be joined for this discussion by three individuals who assist local residents every day: Lina Arena-DeRosa, the Director of the Westwood Council on Aging, Sheryl Leary, the Director of Planning and Community Development for HESSCO (the Aging Services Access Point (ASAP) and Area Agency on Aging (AAA) for Southern Norfolk County, and TJ Tedeschi, U.S. Marine Corps (Ret.), the Veteran Service Officer (VSO) for the West Suburban Veterans District which encompasses the Towns of Needham, Wayland, Wellesley, Weston and Westwood.
Smart Counsel Series Exploring Community Resources
To our Clients and Friends:
Please join us for the next presentation in our Smart Counsel Series on Thursday, September 14, 2023, from 6:00p.m. to 7:30 p.m. virtually via Zoom, hosted by Attorney Maria Baler who will moderate a panel on community resources.
Our local cities and towns and regional organizations offer a wealth of programs, resources, and assistance to residents. These include educational, wellness and social programs, home care services, caregiver support, Medicare counseling, assistance with money management, and providing veterans with assistance to gain access to health care and financial benefits that may be available to them. Many residents are not aware of the availability of these resources until they are in need. Join us to explore these resources in detail and learn more about what is available and how they can be accessed.
We are delighted to be joined for this discussion by three individuals who assist local residents every day:
Lina Arena-DeRosa, the Director of the Westwood Council on Aging,
Sheryl Leary, the Director of Planning and Community Development for HESSCO (the Aging Services Access Point (ASAP) and Area Agency on Aging (AAA) for Southern Norfolk County, and
TJ Tedeschi, U.S. Marine Corps (Ret.), the Veteran Service Officer (VSO) for the West Suburban Veterans District which encompasses the Towns of Needham, Wayland, Wellesley, Weston and Westwood.
Please join us to learn more about the valuable resources and assistance available to you at the local level.
Contact Kenzie Sayward at 781/461-1020 or kenzie@ssbllc.com to reserve a spot for you and a friend.
Suzanne R. Sayward
Maria C. Baler
Abigail V. Poole
Brittany Hinojosa Citron
Megan L. Bartholomew
Five Thoughts About Planning for your Vacation Home
It’s officially summer, and our thoughts turn to summer fun, perhaps at a vacation home of a friend or family member or, if you are lucky enough, yours! If you are the owner of a vacation home, it’s never too early to think about planning for this unique asset. Is this a property you wish to pass on to your children and grandchildren so the good times can continue long after you’re gone? In many cases, the property holds a special place in your family’s hearts and memories, so it is especially important to make sure the property will be there for them to enjoy. Here are five things to consider when planning for your vacation property:
1. Do Your Children Share Your Hopes and Dreams?
It’s important to determine if you and your family share the same vision for the future of your vacation home. You may intend to leave your vacation home to all of your children to use and enjoy for their lifetimes, but it is important to consider whether your plan is realistic. Take a hard look at how the property is used and by whom. Do all of your children enjoy the property and will they continue to do so in the future, taking into account their busy lives and where they live? Or is the home primarily used by one or two children who live close enough to visit often? When planning for the future of your vacation home, talk to your children about your thoughts and encourage them to be honest with you. Knowing who wants to keep the property and who has no interest in owning a second home is vital information before you begin your planning. If the home will be left to some but not all of your children, you should consider whether it is important to equalize the inheritance each will receive, and whether that is possible considering the other assets you own.
2. How Will the Bills Get Paid?
Acquiring a second home is only half the battle. Maintaining a second property requires time and resources. If you are leaving vacation property to family members, consider whether they will be able to maintain it taking into account the carrying costs of the particular property, its age, and anticipated future expenses. If you intend for the owners to contribute to the cost of maintaining the property after your death, consider whether all of them can afford to do this, or whether it makes sense to leave the property (and the financial burdens of its maintenance) to those who can afford the expenses that go along with owning such a property. If you are financially able to do so, you may want to leave extra money to support the property which can be used to pay ongoing expenses and make repairs as needed, and take the burden of those expenses off of your family members. If this is the route you choose to go, don’t underestimate the funds that may be needed, and err on the generous side if you are unsure.
3. How Will Decisions be Made?
No matter how smart your children are or how well they get along, it is always helpful to have a plan for how decisions will be made about who can use the property and when, what improvements will be made to the property, and when and if the property should be sold. It is helpful, whether in a Trust or other written agreement, to set out rules that clearly govern how these matters are decided, and how disputes are resolved. If a child cannot contribute to his share of the expenses, or wants to sell his interest in the property, a structured plan will allow for such transitions, including the opportunity for siblings to buy out one another. If disagreements arise and there is no clear path to resolution, this will ultimately lead to the sale of the property, which is not a good result unless it is one that is agreed on by all involved.
4. Don’t Forget the Tax Planning.
Vacation homes are often a beloved asset, but they are an asset nonetheless, subject to estate tax like the other assets in your estate. If you have a taxable estate (which means the total value of all of your assets exceeds $1 million if you are a Massachusetts resident), it is crucial to consider how estate taxes will be paid when planning for a vacation home that will not be sold following your death. In some sad situations, the next generation would love to keep the vacation property, but the estate taxes payable at the parents’ deaths are so steep that they cannot afford to do so. Consider undertaking planning to reduce the tax bite at your death. This type of planning may include gifting the property or an interest in the property during your lifetime. Consider whether owning vacation property in an LLC may be appropriate if the owner lives out of state and the vacation home is located in Massachusetts. Consider using life insurance to provide a resource from which estate taxes can be paid, reducing the possibility that the property will need to be sold to satisfy a tax obligation. And consider incorporating generation-skipping tax planning into your estate plan to reduce or eliminate estate tax that would otherwise be payable in your children’s estates
5. Transfer during lifetime or at death?
Many vacation homeowners intend to continue to own their property during their lifetimes and leave the property to their heirs at their deaths. By doing so, they remain the sole decision-makers and keep their options open: they could sell the property, rent it out, change their minds about who will inherit it, etc. However, transferring ownership to the next generation during the parents’ lifetimes can make sense for tax planning or long-term care planning reasons. Lifetime gifts of vacation homes are something that should be considered, balancing the capital gain tax and control implications of such a gift against the estate tax cost of retaining ownership until death. However, keep in mind that if you intend to use your vacation home after giving it away, rent will need to be paid to the new owners to avoid inclusion in your estate for estate tax purposes.
Thoughtful and timely planning for a vacation property can ensure the property will pass to future generations in a way that will minimize issues and maximize the chances the property will be enjoyed by your family for generations to come. If you have a vision of your descendants enjoying your beloved cottage and building memories there, take the necessary steps now to make your wishes a reality.
Maria Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), and the former President of the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, visit www.ssbllc.com or call (781) 461-1020. 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.
July 2023
© 2023 Samuel, Sayward & Baler LLC
Update on Credit Shelter Trusts
Attorney Maria Baler details a new position taken by the Massachusetts Department of Revenue on Credit Shelter Trusts regarding the inclusion of half of the value of a house funding the credit shelter trust of the first spouse to die in the taxable estate of the surviving spouse for Massachusetts estate tax purposes when the house was previously owned by both spouses. Please watch and if you have any questions or want to learn more please call us at 781 461-1020.
Updates to the Massachusetts Homestead Law
The Massachusetts homestead law protects a homeowner’s primary residence from forced sale by an unsecured creditor. What this means is that if you are sued and a creditor obtains a judgment against you, you cannot be forced to sell your home to pay the creditor unless the equity in your home is greater than the amount of your homestead protection. If the equity in your home is greater than the homestead protection, the home may be sold but the creditor will receive only what is left after you first receive proceeds equal to the amount of the homestead protection. The protection extends to the homeowner’s family which is defined as spouse and minor (under age 21) children.
How much is the homestead protection? Under the “new” homestead law enacted in 2011, a homeowner is entitled to automatic homestead protection of $125,000. However, homeowners who file a Declaration of Homestead with the Registry of Deeds can increase that protection to $500,000. For married couples where both spouses are over the age of 62, the homestead protection can be doubled to $1 million by filing an ‘Elderly’ Declaration of Homestead. Increased homestead protection is also available to disabled individuals. Homestead protection is available whether you own your property in your individual name(s) or in trust.
In November of 2022, the Massachusetts legislature updated the homestead law to clarify a few of its provisions, notably:
- The 2011 homestead law allowed the holder of a life estate interest in real estate to have homestead protection, but not the holder(s) of the remainder interest in the property. The 2022 updates to the homestead law have made it clear that both the life estate holder and the remaindermen are entitled to homestead protection, provided the property is their primary residence.
- For all you co-op owners out there, the 2022 updates also made it clear that a lessee-shareholder of a residential cooperative housing unit is entitled to homestead protection.
If you are the owner of a home in which another person has a life estate, you are now entitled to Homestead protection. Both the life estate holder and the remaindermen should file a declaration of homestead at the Registry of Deeds to ensure the entire property is protected from creditors’ claims. Similarly, co-op owners should now file for homestead protection.
Keep in mind that a Declaration of Homestead will not protect you from all types of liability that may impact your home. It will not protect the home from a Medicaid/MassHealth lien for benefits paid on behalf of the homeowner, including benefits paid for nursing home care. A Homestead will not protect against governmental liens such as tax liens. A Declaration of Homestead will not prevent your mortgage lender from foreclosing if you do not pay your mortgage.
Interestingly, the homestead law protects the proceeds from the sale of a home for up to one year following the sale, and insurance proceeds received as a result of a fire or other casualty from the reach of creditors for a period of two years.
Keep in mind that if you filed a Declaration of Homestead and then refinanced your mortgage after your Homestead was filed and before March 16, 2011, your mortgage transaction may have voided your homestead protection. However, beginning March 16, 2011, a mortgage transaction does not impact your homestead protection even when the homeowner signs a mortgage that includes a waiver of homestead provision. The waiver of homestead provision in the mortgage relates only to the mortgage itself (which the homestead does not protect against anyway).
If you have questions about homestead protection, please feel free to give us a call, or get the advice of an experienced real estate or estate planning attorney. And if you have not filed a Declaration of Homestead on your home, make sure you do so!
Maria C. Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), and a past President of the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, visit www.ssbllc.com or call (781) 461-1020. 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.
April 2023
© 2023 Samuel, Sayward & Baler LLC
Welcome to Samuel, Sayward & Baler LLC
Attorney Maria Baler introduces our new firm video about the importance of client relationships.
Please watch our firm video below: