Two Recent Cases in Massachusetts Highlight the Perils of Failing to Plan when it comes to Estate Planning.
When Love Stinks – Five Ways Divorce Impacts your Estate Plan
The approach of Valentine’s Day and the recent announcement by Jeff Bezos, founder of Amazon, that he and his wife are ending their marriage after 25 years, set me thinking about how divorce impacts a person’s estate plan (especially in high net worth couples). Here are five ways that divorce can impact an estate plan and actions that should be taken to address that impact on your legacy planning.
- Update your Beneficiary Designations. One of the first things people think about when they split up with their spouse is that they need to change their Will to remove their soon-to-be ex-spouse as a beneficiary of their Will. What is sometimes overlooked is updating beneficiary designations on assets such as retirement accounts, life insurance policies and annuities. While Massachusetts has a statute (MGL c 190B § 2-804) which provides that a divorce revokes a beneficial designation made in favor of a former spouse unless the designation was made pursuant to the divorce, the law also states that if a financial company is not properly notified of the divorce and it makes a distribution to the former spouse then the company cannot be held liable. Keep in mind that changes to assets, including beneficiary designations, may not be permissible while a divorce is pending but should be addressed as soon as the divorce is final.
- Avoid Probate to Avoid Prying. Probate is a public proceeding. One of the requirements of probate is that notice of the filing be published in a newspaper local to the town in which the decedent lived at the time of death. The purpose of this notice is to alert anyone who wants to make a claim against the estate that they have a limited amount of time to do so. It is also an invitation to the nosy to snoop or to the vindictive to cause trouble. Sadly, when love goes bad vengeance can be a byproduct. Wreaking havoc with a probate estate is not that hard. Even if a claimant does not have a valid claim, the prospect of prolonged delay and costs can motivate the Personal Representative of the estate to offer something in settlement. However, if there is no need to file for probate this can be avoided. When no probate is needed there is no publication in the local newspaper and there is no matter pending in the probate court for someone to meddle with.
- Follow through on Deed Changes. When a married couple divorces the disposition of their jointly owned real estate is determined as part of the divorce. Sometimes the property is sold, but often the property will be retained by one of the parties. Although a divorce will sever a tenancy by entirety and a divorce agreement, or order of the court on file in the probate court will determine the title, it is still advisable to actually have a new deed signed conveying the property into the name of the spouse who is retaining it. It is surprising to me how often divorced clients do not take this last step. Good estate planning advice is that no matter how sick and tired you are of dealing with your soon to be ex-spouse, don’t walk away until the i’s are dotted and the t’s’ are crossed and that new deed putting the house in your name is signed and filed with the Registry of Deeds.
- Create a Trust for Minor Children. Even though your Ex is no longer your spouse, he or she is still the parent of your children. In the event you die while you have a minor child, your former spouse is likely to have custody of the children. In addition, your former spouse will have control over your minor child’s assets. That means if you die without a Will, or if you have a Will leaving your estate to your children, it will be your ex-spouse who will have control and custody of your assets that pass to your children until they turn 18. The same is true if you name minor children as the beneficiaries of your life insurance and retirement accounts – those assets will be in the control of your former spouse. If this alarms you, speak with a Wills and Trusts lawyer, and create a Trust that leaves your assets to your children via your Trust in which you will designate someone other than your ex-spouse to manage the assets for your children.
- Update your Power of Attorney and Health Care Proxy. Powers of Attorney and Health Care Proxies are legal documents in which the maker of the document appoints another person to manage financial affairs and make health care decisions in the event the maker is incapacitated. Most married couples appoint each other to these roles. However, most people would not want an ex-spouse managing their finances or making nursing home or health care decisions for them. Even though Massachusetts law automatically revokes those appointments upon divorce, it is prudent to retrieve all copies of those documents that your former spouse, your physician, or a financial institution may possess and to revoke the documents. Create a new Power of Attorney and Health Care Proxy naming people who you want to assume these roles in the event it is necessary.
With apologies to the J. Geils Band, just because Love Stinks while you’re in the midst of a divorce, your estate plan doesn’t have to. If you are recently divorced, contact an experienced estate planning attorney to create or update your estate plan so that the people you care about don’t have to suffer the effects of your divorce again should you fall ill or pass away.
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.
January, 2019
© 2019 Samuel, Sayward & Baler LLC
Five Reasons Not to use “Pay-on-Death” Accounts or Joint Ownership to Avoid Probate
As an estate planning attorney, I advise clients about the ways they can pass their assets to their beneficiaries and avoid probate. This is a desirable goal for most people since probate can be expensive, time consuming, and aggravating for those you leave behind. There are multiple ways to avoid probate including: 1) owning assets jointly with another person; 2) designating pay-on-death (POD) or transfer-on-death (TOD) beneficiaries on an account; or 3) titling assets in the name of a trust. While opening a joint account and filling out a beneficiary designation form are easy, they are not the best choice in every situation. Read on for five reasons why joint ownership or a pay-on-death designation is not always the best choice if you are trying to avoid probate.
- When you add a joint owner to your account you take on that person’s problems. Many clients add an adult child’s name to one or more of their bank accounts. The most common reason for doing this is so that someone will have ready access to funds to pay bills in case the parent becomes incapacitated or dies. Adding a child as a joint owner on an account is not necessarily a bad thing to do however in most situations it should be confined to the parent’s checking account in which a small balance is maintained. One of the reasons for this is that when someone’s name is added to an asset, that person is a legal owner of the asset. If that joint owner experiences some troubles (i.e. divorce, lawsuit, failed business, tax lien, etc.) that person’s creditors may very well try to reach that jointly held asset to satisfy their claim. While the parent may eventually prevail on the argument that the account was funded solely with the parent’s money and established ‘for convenience’, that may only occur after a protracted period of time during which the account could be frozen and expensive legal fees incurred.
- Your estate will need some money to pay bills. If you have beneficiaries designated on all of your assets (i.e. bank accounts, investment accounts, life insurance, IRAs, etc.), when you pass away none of your assets will need to be probated. This is a great result since probate is time consuming, expensive and aggravating, right? Well yes, probate avoidance is good, but where will the money come from for your estate to pay funeral expenses, outstanding bills, final medical expenses, taxes, accountant fees, etc.? You might assume that the people you have named as the beneficiaries will ante up and pay those expenses and maybe they will – or maybe they won’t. Being thoughtful about cash needs in your estate and ensuring funds will be available is an important aspect of planning and will go a long way toward reducing bad feelings among your beneficiaries.
- Your intended beneficiaries are minors. I have a number of clients who want to leave their IRAs to their grandchildren. In addition to giving grandchildren a nice gift, leaving tax deferred retirement benefits to grandchildren can be a ‘tax-wise’ plan. Naming young beneficiaries to inherit IRAs allows for a longer withdrawal period (‘stretch-out’) for those tax-deferred assets. When someone other than a spouse inherits an IRA, the tax rules require that distributions from the IRA begin by December 31st of the year following the owner’s death. The beneficiary does not have the option of deferring distributions until age 70.5 like the owner of the IRA does. However, the beneficiary of an IRA does have the option of taking withdrawals from the IRA over the beneficiary’s life expectancy. Life expectancy is determined by an IRS table (of course) which assumes a life expectancy of about 83 years for everyone. For example, if an IRA is left to a child who is 60 years old when the parent dies, the IRS table requires that the child take withdrawals from the IRA over a 25-year period beginning with 1/25 the first year, 1/24 the second year and so-on until the IRA is completely paid out in the 25th The assets in the IRA that do not have to be distributed continue to grow tax-deferred each year. Contrast that with an IRA left to a 10-year old grandchild whose withdrawal period is 73 years. That’s 73 years of tax-deferred growth versus 25 years. However, if a minor is the beneficiary of an IRA, the only way to transfer ownership of the IRA to the minor child when the grandparent dies is to petition the court for the appointment of a conservator. In Massachusetts, this is a time-consuming and expensive process. Grandparents can use a trust to leave IRAs (or other gifts) to a grandchild instead of naming the grandchild as a beneficiary, thereby avoiding the need for a conservatorship proceeding while still obtaining the tax benefits of the extended pay-out.
- You have concern about your beneficiaries’ ability to manage money. Even if your beneficiaries are not minors, you may be uncomfortable with the notion that some (or all) of your beneficiaries will receive unfettered access to the accounts on which you have designated them as beneficiaries. If you have beneficiaries who are irresponsible with money, who have drug, alcohol or gambling problems, who are in a bad marriage, who have a shaky business, or who are just young and inexperienced with money, leaving them money outright may not be the best approach, even if it is easy and avoids probate. Rather than designating them as pay-on-death beneficiaries of accounts, consider using a trust to control the distribution of these assets to your intended beneficiaries.
- Your plan will fail if your designated beneficiary or joint owner predeceases you. What happens if your joint owner dies? In order for joint ownership or pay-on-death planning to achieve probate avoidance goals, the joint owner or named beneficiary must survive the owner. If the unexpected occurs (and let’s face it, it often does), then the joint ownership will fail and the asset will once again be owned individually. Likewise, if the named beneficiary predeceases the account owner, then the account may end up in probate or may be distributed in an unintended manner. When you designate a beneficiary of an account, the disposition of that beneficiary’s interest in the event the beneficiary dies is determined by the financial institution’s paperwork which may not be in keeping with the account owner’s intention. The owner could address the situation by adding a new joint owner or beneficiary when someone passes away, but surprisingly this often does not happen. If a trust is created then this issue is avoided since a trust will not ‘die’. In addition, a trust will address disposition of the asset in the event a beneficiary predeceases the owner.
The bottom-line is that in some situations, and for some assets, joint ownership and/or pay-on-death planning is completely appropriate. However, it is important to be thoughtful about these decisions and to consider the consequences in the context of your overall estate plan. As with all estate planning, whether or not a particular type of estate planning strategy is right for you depends entirely on your unique situation. Speak with an experienced Massachusetts estate planning attorney about your situation and your goals to make sure your intentions are realized.
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.
December, 2018
© 2018 Samuel, Sayward & Baler LLC
Ask SSB
Q: What is the difference between a Will and a Trust?
A: That is an excellent question and one we get from many people. Both Wills and Trusts are documents used to direct how assets will be distributed when the maker of the Will or Trust dies. However, a Trust can do so much more than a Will.
A person’s Will controls the distribution of his or her probate assets. Probate assets are bank accounts, investments, real estate, tangible personal property, and other assets which are owned in a person’s individual name and which do not have a designated beneficiary. A probate proceeding is therefore required to transfer title from the deceased to his or her heirs. For example, a bank account in someone’s individual name which does not name a beneficiary will be a probate asset when the owner passes away. A bank account which is held jointly with another person is not a probate asset when the first joint owner dies as ownership of the account passes automatically to the surviving joint owner. An IRA that names a beneficiary who is alive when the IRA owner dies is also not a probate asset as ownership passes automatically to the beneficiary.
A Trust controls the distribution of assets that are titled in the name of the Trust or which pay into the Trust when the Trust maker dies. A Trust can be a valuable asset management tool for the trust maker should he experience a period of incapacity during his or her lifetime. A Trust can be used to avoid probate when the maker of the Trust dies. This is a desirable goal since probate is usually expensive, aggravating, and time-consuming. A Trust can be used to control the distribution of a beneficiary’s inheritance. This is important if you have young beneficiaries, a beneficiary with disabilities, beneficiaries who are not responsible with money, or beneficiaries who have creditor issues or other troubles. Distributing an inheritance to a beneficiary in any of those circumstances often leads to the loss of the inheritance. A Trust can be used to protect a beneficiary’s inheritance from the beneficiary’s creditors such as a divorcing spouse, lawsuits, or bankruptcy. A Trust is an excellent vehicle for ensuring that a beneficiary with disabilities does not lose valuable governmental benefits. Trusts are commonly used for tax planning and to achieve planning goals for blended families.
The bottom line is that while Wills and Trusts both perform similar functions (i.e. distributing a person’s assets when they pass away), a Trust is a more efficient way to accomplish that function and has far more versatility than a Will.
To learn more about Wills and Trusts and what is right for your situation, call Jennifer Poles to make an appointment with one of our experienced estate planning attorneys.
October, 2018
© 2018 Samuel, Sayward & Baler LLC
Five Things to Know about the Estate Tax
(Saving Your Heirs Money with Proper Estate Planning)
As Estate Planning Attorneys we often get questions about Estate Taxes. The Estate Tax, often called ‘the Death Tax’, is a tax on the value of assets owned at the time of death. The Estate Tax is completely separate from the income tax and it is little understood by most people because it is usually not encountered until it is too late to do anything about it. Understanding the Estate Tax is an important element of Inheritance Planning. Here are five things to know about the Estate Tax.
- There is both a federal and a Massachusetts Estate Tax. The Federal Estate Tax is imposed at the rate of 40% which seems quite harsh. However, the Federal Estate Tax law gives each person a ‘freebie’ of $11.2 million. This means that if the value of all of the assets you own is less than $11.2 million, your estate will not owe any federal Estate Tax. Because of this very large exemption, the federal Estate Tax applies to very few estates unless they are high net worth estates. Massachusetts has its own Estate Tax system and allows for an exemption (‘freebie’) of $1 million.
- Life insurance IS taxable in your estate. This is both confusing and surprising to many people because they have always heard that life insurance is not taxable. The non-taxability of life insurance refers to the income tax, not the Estate Tax. For example, if my aunt had a $50,000 life insurance policy on which she named me as the beneficiary, the life insurance proceeds are not taxable income to me and I do not need to report that money on my income tax return. However, those life insurance proceeds are part of my aunt’s taxable estate along with her other assets such as her home, bank accounts, and retirement assets.
- A surviving spouse will not pay any federal or Massachusetts Estate Tax. Both the federal and Massachusetts Estate Tax systems include a 100% deduction for assets passing to a spouse. This means that a surviving spouse need never pay Estate Tax if all of the assets belonging to the first spouse to die are left to the surviving spouse. However, without planning there could be significant Estate Tax payable at the death of the surviving spouse.
- Married couples who create Trusts can save their families about $100,000 in Massachusetts Estate Tax. Estate Tax planning in Massachusetts is all about making sure that each spouse takes full advantage of the $1 million ‘freebie’ which Massachusetts allows. If a married couple has an estate valued at more than $1 million and they have a simple ‘I love you’ estate plan which passes all of the assets directly to the surviving spouse at the death of the first spouse then that spouse’s $1 million freebie is wasted. Trusts can be used to ‘shelter’ the $1 million exemption while permitting the surviving spouse to have the use and benefit of the deceased spouse’s $1 million freebie. The Estate Tax savings increases the larger the estate. For example, a married couple with a $1.5 million estate can save $64,400 in Massachusetts Estate Taxes by creating Trusts, while a couple with a $2 million estate can save their family about $100,000.
- Giving away assets can be a good Estate Tax planning strategy… but there’s a catch. There is a federal gift tax which many people believe restricts the amount that can be gifted each year to $15,000. While it is true that $15,000 is the amount of the so-called ‘annual exclusion’, there is a ‘lifetime exclusion’ which permits each person to give away $11.2 million before there is any federal gift tax payable. Since more than 99% of the people in the U.S. do not have $11.2 million to give away, this is not really an issue. The consequence of giving away more than the annual exclusion amount (an “excess gift”) is that: 1) the giver is required to file a gift tax return reporting the gift: and, 2) the excess gift is added to the value of the giver’s estate at death for purposes of determining the amount of the federal taxable estate. Again, this is not an issue for most people since there is no federal Estate Tax payable until the taxable estate exceeds $11.2 million. There is no Massachusetts gift tax. That means a Massachusetts resident may make unlimited gifts to family and friends and there will never be any gift tax payable to the Commonwealth. Further, excess gifts made during lifetime are not added back in to the giver’s taxable estate at death. However, the amount of any excess gifts made during a lifetime must be added to the value of the assets owned by the giver at death for the purpose of determining if a Massachusetts Estate Tax return must be filed. If the value of the assets owned at death, plus the amount of excess gifts made during lifetime exceeds $1 million, then a Massachusetts Estate Tax return must be filed. And, here’s the catch – in this scenario Massachusetts Estate Tax may be due even if the Massachusetts taxable estate is less than $1 million.
Although the amount a person may pass on free of any federal Estate Tax has increased significantly over the past few years such that very few people need to be concerned about planning for the federal Estate Tax, such is not the case for Massachusetts residents and residents of other states that have their own Estate Tax systems. If you are wondering about how the Massachusetts Estate Tax may impact the amount you will leave to your beneficiaries and if there is anything you can do about it, then as you can see from the complexities with the Massachusetts Estate Tax detailed in this article, it is important to contact an experienced estate planning attorney based in Massachusetts to discuss your situation.
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.
October, 2018
© 2018 Samuel, Sayward & Baler LLC
Asset Protection and Creditor Protection – Why Failing to Plan is Risky Business
Let’s face it – taking a risk now and again can add a bit of spice to life. How else to explain hang-gliding or road-side sushi stands? On the other hand, keeping one’s family and fortune safe from risk is on the list of “lifetime goals” for most people. Estate planning is all about protecting your family and your hard-earned assets by reducing potential risk. A properly prepared and maintained estate plan will greatly reduce the risk that the inheritance you leave to your beneficiaries will be lost to their ‘creditors and predators’. Events that threaten assets and inheritance can include lawsuits, bankruptcies, divorce, disability, failed businesses, friends with ‘get-rich-quick’ schemes, gold-digger boyfriends/girlfriends, and perhaps a beneficiary’s own bad judgment. Increasingly, potential beneficiaries who have substance abuse problems or gambling addictions are of concern to parents and other family members who are planning their estates. Many of these concerns can be addressed by creating an estate plan that includes asset protection and creditor protection for the inheritance you will leave to your family. Since no one knows what the future will bring, taking steps to protect your family and your estate from possible misfortunes that could occur long after you’re gone is just smart business.
August, 2018
© 2018 Samuel, Sayward & Baler LLC
Ask SSB
Q: My daughter is going through a divorce and a friend told me that in Massachusetts my son-in-law is entitled to information about MY assets in connection with their divorce – can this possibly be true?
A: Believe it or not, it’s true. In Massachusetts, a divorcing spouse can subpoena the parents of his spouse for information about the size of their estate and the terms of their estate plan to learn about any inheritance his spouse may receive. This is due to the fact that Massachusetts divorce law requires that a judge consider the likelihood that a divorcing spouse will have the opportunity to acquire assets in the future when the judge is deciding how the marital assets of the couple should be divided between them.
The 1990 Massachusetts case which established the right of a divorcing spouse to discover information about the other spouse’s possible inheritance was the Vaughan case. If you are subpoenaed by your son-in-law’s attorney you may be required to submit a ‘Vaughan Affidavit’ which must include:
- the approximate value of your estate
- a general description of provisions of your estate plan which benefit your daughter
- the date that your estate plan was last amended
Although you do not have the legal right to refuse to comply with a subpoena requesting this information, you certainly have the right to create an estate plan which provides protection for your child’s inheritance from the claims of creditors such as a divorcing spouse, a failed business, a bankruptcy, or other lawsuits.
If you are concerned about the vulnerability of your estate to your children’s creditors, including a divorcing spouse, make an appointment to meet with one of our attorneys to discuss the steps you can take to protect your children’s inheritance.
July, 2018
© 2018 Samuel, Sayward & Baler LLC
When should I update my estate plan?
Clients often ask how often they should review and update their estate plan. Here’s a quick reference guide of when you should call us to schedule a time to review your estate plan:
- It has been more than five years since you last reviewed your plan
- Your health has changed
- The health of one of your beneficiaries has changed
- One of your named fiduciaries (i.e. Personal Representative, Trustee, Attorney-in-fact, Health Care Agent) has died or is no longer the right choice
- Your marital status has changed
- You received an inheritance
- You have a new baby
- Your child(ren) reach the age of majority – click here for Attorney Poole’s blog about the three documents that are vital for your 18 year old child
- The value of your assets has changed significantly
The above list is not meant to be exhaustive as everyone’s situation is unique. If you are wondering if it’s time to come in for an update, it probably is. Call Jennifer Poles at our office to schedule an appointment with one of our attorneys to see if any updates are necessary.
July, 2018
© 2018 Samuel, Sayward & Baler LLC
Five Questions to Ask Before Creating an Irrevocable Trust
Some of the most frequent questions I hear from clients in my estate planning law practice have to do with whether they should create an irrevocable trust. Here are five questions to ask when deciding whether or not an irrevocable trust would be a good addition to your estate planning strategy.
- What is your reason for creating an irrevocable trust? Before jumping in to create an irrevocable trust, talk to your estate planning attorney about your goals. The two most common reasons for creating an irrevocable trust are 1) to save taxes; and, 2) to preserve assets from the reach of creditors, including long-term care costs. Some typical tax savings trusts include irrevocable trusts that hold life insurance, trusts that pass assets to charity, or that are used to gift assets to family members. Irrevocable trusts that are created for long-term care planning purposes typically provide for an income stream to the trust maker but forbid any access to the principal of the trust.
- Do you have the ‘right’ assets to fund an irrevocable trust? If your goal is to preserve your assets against long-term care costs but your assets consist mostly of IRAs or other qualified retirement funds, transferring those accounts to an irrevocable trust is not a good plan. The transfer of an IRA out of the name of the IRA owner is a taxable event. For example, if you have a $500,000 IRA and you move it into the name of your irrevocable trust you will be deemed to have $500,000 of taxable income. This will mean an income tax bill in the neighborhood of $150,000 or so – not a good result.
- Will you need to have access to the principal? A hallmark of most irrevocable trust planning is that once you transfer an asset to the irrevocable trust, you cannot get it back. Understandably, many people are reluctant to transfer their money or investments to an irrevocable trust. Transferring your home to an irrevocable trust can be a good way to protect property from medicaid and preserve the value of the home from having to be spent down on long-term care costs without really impacting your day to day life. You may continue to live the home and even pay all the bills. If the property is rental real estate, you can continue to receive the net rental income. However, if the property in the irrevocable trust is sold, you would not have access to the sale proceeds, which would continue to be held in the irrevocable trust.
- What are the consequences of transferring your assets to an irrevocable trust? Before transferring assets to an irrevocable trust, you should understand the consequences of the transfer on your estate plan and your inheritance planning. (See number 2 above.) For example, even though the transfer of a home to an irrevocable trust will not result in an immediate tax consequence, there could be later tax consequences. Such a transfer may mean that the inheritors of the house will not be entitled to a stepped-up basis in the property when the trust maker passes away. This may result in a significant capital gain tax upon the sale of the property that would have otherwise been avoided if the property had not been transferred or if the trust included certain provisions. Similarly, if the home is sold while the person who transferred it to the irrevocable trust is still living, there may be capital gain tax payable on the sale that would have been avoided if the property had not been transferred to the irrevocable trust. There can be non-tax consequences as well. Transferring a home to an irrevocable trust usually makes it difficult to obtain a mortgage or home equity loan on the property. This could impact the ability to make repairs or improvements to the property.
- Is there another way to accomplish your goal? Since creating and funding an irrevocable trust can be complex (and expensive), explore whether there are other options for achieving your desired result. For example, gifting the home, vacation home, or rental property directly to children subject to the parent’s right to live in the property (typically called a life estate deed) rather than to an irrevocable trust, might be a better way to preserve that property from spend down for long-term care in your situation. If your goal is to benefit charity, maybe a donor-advised fund through one of the larger brokerages may be a simpler, easier option than creating an irrevocable charitable trust.
As with all estate planning, whether or not a particular type of trust or other planning is right for you depends entirely on your unique situation. Speak with an experienced estate planning attorney, a lawyer for wills and trusts, about your situation and your goals and don’t forget to ask the above five questions.
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.
July, 2018
© 2018 Samuel, Sayward & Baler LLC
An Estate Planning Lesson from Roseanne Barr?
Regardless of whether you agree or disagree with the decision to cancel the Roseanne show following Roseann Barr’s racist tweet of last month, I think everyone can agree that her failure to be thoughtful about her actions led to her downfall and the downfall of her very successful show. While there may be debate about the appropriateness of the punishment Roseanne received (too harsh? too light?), most people feel badly for Roseanne’s co-workers who will pay the price for her bad behavior by losing their jobs. They are no doubt angry and feel betrayed by her. The same is true when it comes to estate planning strategies; we betray the ones we care about when fail to follow estate planning basics. Failure to act thoughtfully with respect to your estate plan can leave the people you love feeling angry and betrayed too.
In many ways, creating an estate plan is not something you do for yourself; it is something you do for the people you love. Setting up wills, trusts and estate plans are crucial for your legacy. If you become incapacitated because of an accident, a stroke or an illness and you have not created a Durable Power of Attorney and a Health Care Proxy, your family is going to have a difficult time helping you. Without these basic estate planning documents no one, not even your spouse, has the legal authority to gain access to your assets or to make decisions about your care. One or more family members may need to go to court to be appointed as your conservator and/or guardian so that bills can be paid, investments can be managed and proper care can be arranged. This will cause your family members stress and take hours of their valuable time to do things that could have been avoided with some advance planning.
Likewise, if you die without a Will, it will be more difficult and expensive for your family to settle your estate. Even worse, your estate may not be distributed in the way you thought it would or how you wanted. These unintended consequences can leave bad feelings among survivors that can last for years. Proper estate planning could also be considered good inheritance planning. It is not uncommon for clients to tell me how their parents failed to do any planning and as a result the house was lost to long-term care costs, or a second spouse ended up with the treasured family cottage, or there were tens of thousands of estate taxes payable that could have been avoided with a little bit of advance estate planning.
In my experience, no one wants to leave their family with a mess of complex estate planning issues. Yet failing to act thoughtfully by creating an estate plan and keeping it updated often means a mess is what is left. Roseanne’s action hurt many people – people she had no intention of hurting. Don’t let failing to plan leave your loved ones with the bad feelings that unintended consequences so often produce –and of course, think before you tweet!
June, 2018
© 2018 Samuel, Sayward & Baler LLC