Attorneys Suzanne Sayward and Frank Mulé present the advantages and disadvantages of using an Irrevocable Trust to protect assets from having to be spent-down on long-term care costs in our most recent Smart Counsel Webinar.
Top 5 Reasons to Create an Estate Plan During National Elder Law Month
Welcome to May! Not only is it the month of flowering trees, flowering shrubs, and well, flowering flowers, it is also National Elder Law Month. Elder law attorneys advise clients about a variety of issues, one of which is estate planning. However, estate planning is not just for older adults. As an estate planner and elder law attorney, I can cite a number of reasons why everyone over the age of 18 should have an estate plan. But what motivates most people to pick up the phone and make an appointment with an attorney to create their Will? I conducted a very un-scientific study of why clients decide to create or update their estate plan.
Here are the top five reasons that people decide to create or update their estate plan – in descending order.
5. They want to provide instructions for end-of-life care. Many people feel strongly about how they want to be cared for at the end of their lives. So long as someone is healthy enough to articulate instructions for their own care, they may direct the course of their care. But if a person is unwell and unable to articulate those instructions, then the only way their wishes can be carried out is if they have provided advance instructions about the care they wish to receive and appointed someone who has the legal authority to implement those instructions.
4. They want their estate to avoid probate. Probate avoidance is one of the primary reasons that people create an estate plan and rightfully so. Probate is the process of changing the title on assets when someone passes away from the deceased person’s name to the name of the legal representative for the estate. Probate is costly, it is a public proceeding, it invites contests and it takes a long time. Luckily, avoiding probate is fairly easy. Only assets that are in a person’s individual name at the time of death and that do not have a joint owner or beneficiary designated to receive them need to be probated. Owning assets jointly with another person (when appropriate), making sure there are beneficiaries designated on assets such as IRAs, 401Ks, annuities, and life insurance, and creating and funding a Living Trust, are all ways to avoid probate.
3. They want to reduce or eliminate estate taxes. The estate tax is a tax imposed on the value of assets an individual owns (or is deemed to own) at death. There is both a federal estate tax and a Massachusetts estate tax. The good news is that federal law gives each person a $12 million exemption from federal estate tax. As such, there are very few people who need to pay federal estate tax. The bad news is that Massachusetts grants its citizens only a $1 million freebie from estate tax. For many residents of Massachusetts who own a home, have a retirement account, and own life insurance, this $1 million threshold is quickly reached. Undertaking planning to reduce or eliminate the estate tax that their families will pay from their estates at death is a goal for many whose estate will subject to the estate tax.
2. They want to protect their assets from having to be spent down on long-term care costs. Many clients tell us they are concerned about the cost of long-term care and worried that those costs will consume all of their assets. Given the very high cost of long-term care, whether delivered at home or in a skilled nursing facility, these concerns are warranted. Learning about the options for planning to protect assets from needing to be spent down on long-term care well in advance of needing such care is vital to the success of achieving this goal. Learning the pros and cons of such planning, and why for some it may not be necessary, are also important. Long-term care planning is very specific to each individual, and is an area in which it is especially important for each client to get advice about their own particular circumstances.
1. They want to provide for and protect their loved ones. The number one concern that clients have is for their families. Whether it’s parents with young children, older folks with grown children, a married couple with no children, or the favorite auntie or uncle, they all want to make sure their loved ones are taken care of when they are no longer around to do so. This means different things at different stages of life. For parents of young children, it means naming guardians for those children and ensuring there are resources available to raise them. For those with adult beneficiaries, it may mean setting up their plan to provide creditor protection for the inheritance they leave to children or nieces and nephews. And for older couples, making sure that the survivor of them is left in the best possible circumstances upon the death of the first spouse is of paramount concern.
There are many reasons people make the decision to create or update their estate plan on a given day. Sometimes it’s circumstantial, such as the death of a loved one or a medical diagnosis. But underneath those circumstances is a desire to ‘get one’s house in order’. If we can help you with your estate or long-term care planning, please contact us to schedule a time to speak with one of our experienced estate planning and elder law attorneys.
Attorney Suzanne R. Sayward is a partner with the Dedham law 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 certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. 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 our website at www.ssbllc.com or call 781/461-1020.
May, 2022
© 2022 Samuel, Sayward & Baler LLC
What’s New at Samuel, Sayward & Baler LLC – Don’t Miss Our April 2022 Newsletter
Don’t Miss Our April 2022 Newsletter
Attorney Suzanne Sayward discusses our most recent newsletter, for our Smart Counsel for Lunch Series. Please watch and if you have any questions or want to learn more then call us at 781 461-1020. Please find our newsletter below.
Demystifying the use of Irrevocable Trusts for Long Term Care Planning
To our Clients and Friends:
Please join us for the next presentation in our Smart Counsel Series on Thursday, May 19, 2022, from 6:00 pm to 7:30 pm in person* at our office at 858 Washington Street, Suite 202, Dedham, Massachusetts OR virtually via Zoom.
If you have ever wondered whether an Irrevocable Trust for long-term care planning is right for you, join us for this program, Demystifying Irrevocable Trusts for Long-term care Planning.
Attorneys Suzanne Sayward and Frank Mulé will discuss the advantages and disadvantages of using an Irrevocable Trust to protect assets from having to be spent-down on long-term care costs. Attendees (both in person and virtual) will have an opportunity to ask questions.
For those who attend in person, we’ll have wine, cheese and other light refreshments. For those who attend virtually, you’re on your own for snacks!
Contact Victoria Ung at 781/461-1020 or ung@ssbllc.com to reserve a spot for you and a friend.
The program is free but space is limited if you would like to attend in person, so don’t delay!
Suzanne R. Sayward
Maria C. Baler
Abigail Poole
Frank Mulé
Megan Bartholomew
* Subject to change. If rising COVID cases mean that we have to cancel our in person presentation, registrants will be able to attend virtually.
A Q&A on the Massachusetts Homestead Law
On this date 11 years ago (March 16, 2011) a new homestead law went into effect in Massachusetts. To commemorate that anniversary, we present a few highlights of the 2011 Homestead law.
What is the Massachusetts homestead law? The Massachusetts homestead law protects a homeowner’s primary residence from forced sale by an unsecured creditor. That means that if you are sued and your creditor obtains a judgment against you, you cannot be forced to sell your home to satisfy the judgment up to the amount of the homestead protection. The homestead 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 2011 Massachusetts law, 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’ homestead. Increased homestead protection is also available to disabled individuals.
If a home is owned in trust is the homestead still available? Yes. The 2011 version of the homestead law specifically includes homes owned in trust as eligible for homestead protection. This was an important change made by the 2011 homestead law as the prior law did not include any reference to homes titled in trust which created a lot of uncertainty.
Will a Declaration of Homestead protect the home from a lien for nursing home care costs? No. A Declaration of Homestead will not protect a home from a lien by the Commonwealth of Massachusetts for Medicaid benefits paid on behalf of the homeowner, and this includes benefits paid for nursing home care. There may be other ways to protect the home from such a lien, but the homestead does not protect against governmental liens such as for taxes or Medicaid benefits.
Will a Declaration of Homestead prevent my mortgage holder from foreclosing on my mortgage? No. The protection of the homestead extends only to unvoluntary, non-governmental liens such as judgment creditors.
Is the Homestead protection lost if I sell my home? No. Under the 2011 version of the homestead law, the proceeds from the sale of a home are protected for up to one year following the sale. This is an important protection for homeowners who may be involved in a lawsuit and who want to sell their home and move while the lawsuit is ongoing or those whose home is subject to a judgment. Under the prior law, the homestead protection ended when the home was sold. This means that a creditor could show up at the closing on the sale of the property and collect the debt if there was a judgment. Under our current homestead law, if the proceeds from the sale of the home are invested into a new home within the one-year period following the sale, then the proceeds are beyond the reach of a creditor. The new homestead law protects insurance proceeds received as a result of a fire or other casualty from the reach of creditors for a period of two years.
Do I need to re-file a Declaration of Homestead if I refinance my mortgage? No. The 2011 statute states explicitly that the homestead protection is not waived as to creditors 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 (which the homestead does not protect against anyway since it is a voluntary lien). This was also an important change made by the 2011 homestead law. Previously, a mortgage filed subsequent to the filing of a Declaration of Homestead terminated the Homestead protection.
While filing a Declaration of Homestead does not make a debt go away, it does protect a homeowner from being forced to sell the home to pay that debt. I often tell my clients that the homestead is like ‘cheap insurance’ – it only cost $35 to file ($36 in Norfolk County) and it can usually be done by the homeowner without the need for an attorney. (If your property is held in a trust, consult with your attorney about filing a homestead to make sure is it done properly). If you have questions about homestead protection or if we can help you with your estate planning needs, please don’t hesitate to contact us.
Attorney Suzanne R. Sayward is a partner 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 certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. 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.
March, 2022
© 2022 Samuel, Sayward & Baler LLC
How To Choose A Fiduciary When There Is No Obvious Choice
Attorney Suzanne Sayward discusses how to choose a fiduciary when there is no obvious choice, for this edition of 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.
And don’t forget….
to join us for our next Smart Counsel webinar on Thursday, February 24th when Norfolk County District Attorney Michael Morrissey and Senior Affairs Coordinator Gayle Bellotti, will share their expertise on fraud prevention, cyber hacking, scams and identity theft.
Attorney Maria Baler will round out the panel and will speak to the importance of having updated estate plan documents that permit trusted individuals to assist you if necessary, including the ability to access your digital assets. In addition to hearing from our panel, attendees will have the opportunity to ask questions.
Join us virtually for this presentation on Thursday, February 24, 2022 from 6:00 pm to 7:30 pm. Contact Victoria Ung at 781/461-1020 or ung@ssbllc.com to reserve a spot for you and a friend.
The program is free but registration is required.
5 Frogs to Eat in 2022
Mark Twain is attributed with saying, “Eat a live frog first thing in the morning and nothing worse will happen to you the rest of the day.” This advice is commonly interpreted to mean that in prioritizing the tasks that need to be completed to achieve a goal, you should tackle the task that is hardest first. ‘Hardest’ in this context does not necessarily mean most difficult – it means hardest for you. ‘A frog’ could be something you find extremely boring to do, or a task you just don’t like to do such as filling out forms.
In my practice, I meet with clients to help them achieve their estate planning goals. A paramount goal for many clients is to make the estate settlement process as easy as possible for their loved ones when they pass away. Creating an estate plan (Will, Trust, etc.) with an experienced estate planning attorney is a critical component to achieving this goal. However, simply signing a Will, Trust, and other estate plan documents is generally not sufficient to achieve the goal of making the settlement process as easy as possible. Read on for five important tasks that you can do to make things easier for those you leave behind.
1. Review and Update your Beneficiary Designations. The owner of assets such as life insurance, retirement accounts, and annuities, may designate beneficiaries to receive these benefits when the owner dies. Beneficiaries may be individuals or Trusts. When we work with clients to create or update their estate plan, we provide written instructions for designating beneficiaries. Following that advice and properly completing and filing the forms with the financial institution or life insurance company is critical to ensuring that the estate plan works as intended. It is a good idea to confirm those beneficiary designations from time to time as well since it is not uncommon that when financial advisors move from one company to another, or when employer-sponsored retirement plans change custodians, the beneficiary designation does not carry over. Requesting written verification of your beneficiaries and maintaining that confirmation with your records is advisable.
2. Organize your Asset Information/Documentation. We work with many clients on estate and trust settlement matters who find the most frustrating aspect of this process to be their inability to find information and documentation about the decedent’s assets, debts, or benefits. To make this process easier for your family, maintain a comprehensive list of your assets including bank accounts, IRAs, brokerage accounts, life insurance, annuities and any other assets you have or that your family or estate would be entitled to receive at your death. Keeping a complete copy of a recent statement for each account with that list is extremely helpful for those who will be handling your affairs if you become incapacitated or following your death. Including contact information for advisors and agents is also very helpful.
3. Make sure your assets are properly titled in your Trust. A Trust is an excellent estate planning tool for many people because it can be used to accomplish many goals including probate avoidance and estate tax savings. However, simply creating a Trust will not in itself achieve those goals; it is necessary to “fund” the Trust by titling assets in the name of the Trust or designating the Trust as the beneficiary of assets such a life insurance. Avoiding probate really does make the estate and Trust settlement process much easier, so take that the time to fund your Trust. Your estate planning attorney should provide you with instructions for funding your Trust consistent with your estate plan.
4. Maintain an updated file with information that would be useful to your family. In addition to maintaining a file with asset information and account statements as noted above, here is some other information that will be useful for your family to have if you were suddenly unavailable:
a. A list of the bills you pay each month (i.e., mortgage, car loan, utilities) along with those paid less frequently (i.e., life insurance, real estate taxes, etc.);
b. A list of employers from whom you receive, or from whom your beneficiaries may be entitled to receive, pension or other group benefits;
c. Information regarding your health insurer, including any long-term care insurance policies;
d. A list of your active credit cards, along with any rewards programs;
e. Access information for safe deposit boxes or storage facilities;
f. A list of your online accounts, user names and passwords; and,
Home alarm codes and contact information for the alarm company.
This is not an exhaustive list, but is intended to help you start thinking about what your family would need to know. Pay attention to the tasks you handle for your household and ask yourself, what would someone need to do this?
5. Meet with your estate planning attorney every 5-7 years to review your estate plan and update it as necessary. Your estate plan is not a ‘one and done’ event. As long as you’re alive, your situation will change, the laws will change, and your goals may change. It is important that your estate plan reflect your current situation if you want your wishes to be carried out and to make settlement of your estate as easy as possible for your loved ones. Reviewing your estate plan with your attorney every 5-7 years is a good benchmark timeframe, but reviewing things more frequently may be appropriate if your situation warrants it.
Many will view the above tasks as ‘frogs’ and you are not wrong in that view! However, undertaking these tasks will go a long way toward achieving that goal of making the settlement of your estate as easy as possible for your family. So, take the advice of Mark Twain and resolve to eat one of those frogs first thing every morning until they are all gone – you (and your family) will be glad you did.
Attorney Suzanne R. Sayward is a partner with the Dedham law 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 certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. 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 our website at www.ssbllc.com or call 781/461-1020.
January, 2022
© 2022 Samuel, Sayward & Baler LLC
Things to Celebrate in 2021
Happy Thanksgiving!
All of the SSB staff wish you a Happy Thanksgiving on this week’s episode of our Smart Counsel for Lunch Series. Please watch and if you have any questions or want to learn more call us at 781 461-1020.
Don’t Settle for ‘Just Any’ Estate Plan
Toyota is currently running a series of ads for their service centers advising Toyota drivers that using genuine Toyota parts and having their cars serviced by Toyota-trained technicians is a much better decision than having ‘just anyone’ do it. In one ad, the Toyota driver imagines what could go wrong if he hires ‘just any carpenter’- it’s not pretty. In another commercial, a couple watches as their living room is destroyed after an electrician rewires everything with ‘stuff that will work fine.’ Toyota’s point is that ‘just right’ is better than ‘fine’. The same is true when it comes to your estate plan.
There is a proliferation of material on the internet purporting to make the viewer an expert on everything from cutting your own hair, changing the oil in your car, and yes, writing your own Will (I’m not going to share a link for this because I care about you). While there are some projects that do not require a specialist, there are others that most assuredly should be undertaken by an experienced professional – estate planning falls into the latter category.
Here at Samuel, Sayward & Baler LLC, we meet with people who come to us with estate plans that were prepared by attorneys who do not concentrate their practice in the area of estate planning or even some clients who prepared their own estate plan. The reason for this is often cost-savings – ‘my cousin is a personal injury attorney and he did our Will for free’ or ‘I bought a Will form on a legal website for $20’. This is almost always a case of being ‘penny-wise and pound foolish’ because the cost of having an improper estate plan is high –not just in money – but in the toll it takes on surviving family members.
Examples of poorly drafted or ‘do-it-yourself’ estate plan fails that we have seen include:
- A Will that named one beneficiary without stating to whom the estate should pass if that beneficiary died, and in fact, the beneficiary did die before the testator who did not update his Will before he passed away.
- A Will that did not grant the Personal Representative (executor) the authority to sell real estate, thus necessitating a special petition to the court to obtain permission to sell which was both costly and time consuming.
- A Power of Attorney that was not durable and as such became void when the maker became incapacitated, thereby requiring a court appointed conservator (expensive and time consuming).
- A Will that left the assets in the estate to a Trust that did not exist.
- A married couple whose general practice attorney failed to advise them about simple planning that would have saved their family more than $100,000 in estate taxes.
Sadly, I could go on and on.
Working with an experienced estate planning and elder law attorney to prepare a plan that is appropriate for your unique situation and designed to meet your goals is not free and not cheap. However, the savings that are achieved by avoiding probate, reducing or eliminating estate taxes, or preserving assets from spenddown on long-term care costs is usually many times over the cost of the planning. Don’t settle for ‘just any estate plan’ – work with an experienced estate planning and elder law attorney to create the plan that is ‘just right’ for you.
Attorney Suzanne R. Sayward is a partner 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 certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. 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.
November, 2021
© 2021 Samuel, Sayward & Baler LLC