Don’t Miss Our January 2023 Newsletter
Attorney Abigail Poole discusses our current newsletter, 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.
When we discuss estate planning and what happens after you pass away, one of the most common inquiries we receive is “Why is it beneficial to have a Will in place before you die?” While it may be hard to consider what should happen to your assets after you pass away, having a valid Will prior to your death is essential for making sure your wishes and distribution instructions are clearly expressed and easy to follow.
As a reminder, a Will is a written document with instructions for distributing your probate assets after your death. Probate assets consist of tangible personal property, digital assets and devices, and real estate and other financial assets (such as bank and investment accounts) owned in your individual name for which there is no named beneficiary.
Probate is the process by which the Court appoints the Personal Representative (formerly called the Executor) you have named in a Will and grants that person the legal authority to take control of the probate assets, pay debts, expenses and taxes, and distribute the remaining assets according to the instructions in the Will. Creating a Will means that you control who will serve as your Personal Representative.
Without a Will, any person ‘interested in your estate’ may ask the court to be appointed as the Personal Representative.
If you pass away without a Will (also known as dying “intestate”), Massachusetts state law determines who will receive your assets. In some cases, the way the law would distribute your assets is not the way you would want them to be distributed. Having a Will ensures your assets will be distributed to the people or charities you wish to benefit.
Establishing a Will as part of your estate plan is essential for controlling the distribution of your assets according to your wishes. Your Will allows you to name the Personal Representative in charge of administering your estate and provide clear instructions about how your assets should ultimately be distributed. To read more about why you should make a Will, as well as to find other articles on estate and long-term care planning, please visit our website or contact our office to schedule an appointment with one of our attorneys to create your estate plan!
Attorney Maria Baler discusses Funeral and Burial Instructions, 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.
It’s that time of year again when we resolve to do better in the coming year than we did in the past year. Exercise regularly, eat healthy, and get better sleep are common January pledges. The new year is also a good time to resolve to take action on your estate plan. Read on for five estate planning resolutions for 2023.
1. Create or Update your Estate Plan
If you don’t currently have an estate plan (Will, Power of Attorney, health care documents and maybe a Trust), resolve to remedy that situation in 2023. Creating an estate plan is important for everyone age 18 and older. Even if your assets are modest, it is vital to appoint people who are legally authorized to make decisions for and about you if you experience a period of incapacity. If you have young children, a large estate, a beneficiary with disabilities, a second marriage, multiple properties, or other more complex situations, a Trust may be advisable to meet your planning goals. If you have an estate plan but it has been more than five years since you reviewed your plan, resolve to meet with your estate planning attorney to review and update your plan as needed.
2. Check your Beneficiary Designations
Many of your most significant assets – life insurance, retirement accounts, annuities – will be paid to a designated beneficiary at your death. Properly designating those beneficiaries is more complicated than it may appear. If you have minor children to provide for, or if you want to benefit a person with disabilities who receives, or may receive, needs-based governmental benefits, it is best that assets pay to a Trust for those beneficiaries. Understanding how distributions from retirement accounts work after the death of the account owner, and how different beneficiary designations will impact the size, frequency and income tax payable on those distributions is crucial to making appropriate designations. Ensuring your beneficiary designations are consistent with your overall estate plan is critical to accomplishing your estate planning goals.
3. Resolve to Fund your Trust
If you have created a Living Trust as part of your estate plan, follow through and retitle your assets as directed by your estate planning attorney. Two of the main reasons for creating Trusts include probate avoidance and estate tax savings. However, your Trust will not achieve these goals if you do not change the ownership of your assets during your lifetime from your individual (or joint) names to the name of your Trust. There is no question that this can be a time-consuming task since it may involve meeting with a customer service representative at the bank, calling financial institutions to determine the process for making the change, completing the paperwork, and then following up with the companies to confirm that the changes have been properly instituted. However, these steps are essential to the success of your plan. If you are not able to accomplish the trust funding tasks, contact your estate planning attorney to obtain assistance. Many estate planning law firms offer trust funding services.
4. Provide copies of your Health Care Documents to your Health Care Agent
Documents expressing wishes regarding end-of-life-care and instructions regarding medical treatment are a vital part of every estate plan. In Massachusetts, these often include a Health Care Proxy and a Living Will. A Health Care Proxy is the legal document used to appoint the person who will make health care decisions for you if you are not able to do so. The appointed individual is called your Health Care Agent. A Living Will is not a binding legal document in Massachusetts but is used as a way to express a person’s wish that extraordinary medical measures not be used to prolong life in circumstances where death is imminent. Once signed, copies of these documents should be provided to your Health Care Agent and a copy of your Health Care Proxy should be given to your primary care physician’s office as well as to any other doctors who regularly treat you. We recommend that you provide these documents to your Health Care Agent electronically. That way your Health Care Agent can save those electronic copies on their phone or in their cloud-storage service (Dropbox, Google drive, etc.) so that they are immediately accessible. You should save your own Health Care Proxy, as well as the Proxies of anyone for whom you may be named as Health Care Agent, on your phone or in the cloud as well.
5. Organize your Financial Records
A primary purpose of estate planning is to make it easier for people to help you if you become incapacitated and to ease the burden on the people who will be dealing with your estate when you pass away. One of the greatest gifts you can give the people you have named to these positions, is the gift of well-organized records. We handle a lot of estate and trust settlement matters in my office and one of the hardest parts for family members or others named as fiduciaries is finding information about assets: bank accounts, investment accounts, retirement accounts, pensions, life insurance, etc. The same is true for debts and monthly bills. This problem has become worse as more and more people move to paperless status for their accounts and bill pay. Keeping an up-to-date list of all of your accounts and a file folder with a paper copy of a recent statement will be incredibly helpful to the person who is trying to manage these for you. Set up a file with folders for your life insurance, long-term care insurance, each retirement account, your pension, each bank account, etc. Do the same for your bills and don’t forget bills that are paid less frequently than monthly such as annual life insurance, homeowner’s insurance, etc. Create a folder for your car with a copy of the registration, the title or lease agreement, auto insurance, car loan, etc. If you have records that are only stored electronically such as income tax returns, create a folder and include information about how to access those electronic records. Start in January and add to it each month and by next December you will have compiled a complete set of your records.
Good luck with the dieting, exercising and sleeping better in 2023. If we can help with your estate planning, please contact our office to schedule a time to speak with one of our attorneys. Happy New Year and best wishes for a happy and healthy 2023!
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, 2023
© 2023 Samuel, Sayward & Baler LLC
The end of the year is often a time when people think about making gifts to loved ones for the holidays or for year-end tax planning. Since we are in December, what better time to talk about the Gift Tax?
Here are a few things to know about the gift tax.
The gift tax is not the only tax to take into consideration when thinking about making large gifts; there may be income tax, estate tax, and capital gain tax consequences. And of course, taxes are not the only concern when making large gifts – there may be long-term care ramifications, concerns about a recipient’s ability to handle a large sum, and worries about potential threats to the gift by the recipient’s creditors (divorcing spouse, failed business, lawsuit, etc.). If you are considering making large gifts to family members, talk with your estate plan attorney to make sure you have a good understanding of all of the consequences.
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, 2022
© 2022 Samuel, Sayward & Baler LLC
Hello and Welcome to this week’s Holiday Edition of Smart Counsel for Lunch. We want to wish you all a happy holiday and healthy new year! Please enjoy our holiday message along with an additional video below on the Twelve Days of Holiday Estate Planning.
Please enjoy our video on The Twelve Days of Holiday Estate Planning.
My father recently asked me what was on my wish list for gifts this year. As an estate planning attorney, that got me thinking about what things would be on my wish list for clients to do to ensure they can enjoy the holiday festivities with peace of mind. Without further ado, here are five things I wish for my clients and their families, and which make great conversation topics over a holiday family supper.
1. Estate Plan Documents for Every Young Adult on your Gift List
If you have a child, niece or nephew, or other young adult you care about who will soon turn age 18 and be heading off to college, it is important that young adult create some basic estate planning documents before heading off to college. A power of attorney and health care proxy will ensure a parent or other trusted person can make financial and health care decisions for that young adult in the event of his or her incapacity.
2. A Completed Tangible Personal Property Memorandum
When you visited your estate planning attorney, he or she may have discussed with you completing a Tangible Personal Property Memorandum. The Memorandum is a separate document that is incorporated by reference in your Last Will and Testament. It identifies specific items of personal property and the individuals who you would like to receive each specific item from your estate after your death. For example, the Memorandum might state that your wedding ring is to be distributed to your son Max after your death. If it is important that specific people get specific items from your estate and you have not put that information down in writing on the Memorandum (and sent us a copy of it), now is the time to do it.
3. A Complete List of Digital Accounts and Passwords
Now more so than ever, it is imperative that you create and maintain a paper or electronic list of all the financial accounts, email accounts, social media accounts, and other accounts you access online along with their associated usernames and passwords. Your attorney-in-fact, Personal Representative or Trustee will need to access your accounts if you are incapacitated or deceased to manage and/or close your accounts. As more and more information is solely shared and stored electronically, providing a list of accounts and passwords for your fiduciary will help make his or her job much easier when the time comes that he or she must assist you or settle your estate.
4. Written Funeral Wishes
Many of my clients have a pretty good idea about what they would like to happen following their death in terms of funeral and burial or cremation instructions. They may have shared those wishes verbally with family but not put them down in writing. Now is the time to memorialize your burial or cremation wishes and funeral wishes in writing. A Directive as to Remains accomplishes this goal and is tailored to fit your wishes. For example, Aunt Sally might prepare as part of her estate plan a Directive as to Remains that states she wants a green burial and a gathering of friends and family to celebrate her life.
5. Confirmation of Beneficiaries on Retirement Accounts and Life Insurance Policies
A crucial step that is sometimes missed during the hectic rhythm of life is designating beneficiaries of your retirement accounts and life insurance policies. There is no time like the present to confirm that you have designated the appropriate primary beneficiary and contingent (back-up) beneficiary on those assets. Doing so will guarantee that your retirement accounts and life insurance death benefits will pass to the correct individuals outside of probate at your death.
And there you have it, my estate planner wish list for every client to complete this holiday season. Doing so will give you (and me!) peace of mind that you are leaving your loved ones clear directions regarding your wishes and making it easier for them to manage your estate while you are alive or after your death.
Attorney Abigail V. Poole is a senior 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 and President-Elect 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.
December, 2022
© 2022 Samuel, Sayward & Baler LLC
Attorney Suzanne Sayward discusses Irrevocable Trusts & Gifting, 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.
All of the staff at Samuel, Sayward & Baler LLC 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.
On Election Day, November 8, 2022, Massachusetts voters approved Ballot Question 1, the so-called Millionaires Tax by a close margin. Of the 50% of Massachusetts registered voters that voted on Question 1, 52% were in favor of the tax and 48% voted against.
This ballot question approved the adoption of an amendment to the Massachusetts state constitution that was already twice approved by the state Legislature in 2019 and again in 2021. Starting with the tax year that begins on January 1, 2023, the Amendment will impose an additional 4% state income tax on a Massachusetts resident’s annual taxable income in excess of $1 million. The threshold for imposition of the extra 4% tax will be adjusted annually for inflation. The tax is expected to affect only 0.6% of Massachusetts households.
The tax revenue raised by this extra 4% tax, estimated at $1 to $2 billion annually, will be used, subject to appropriation by the Legislature, for public education (including public colleges and universities) and transportation (repair and maintenance to roads, bridges, and public transportation.
If income from any source, including wages, interest, dividends, income from the sale of a home or business, and long and short-term capital gains, exceeds $1 million, the portion in excess of $1 million will be taxed at 9% (the standard Massachusetts income tax of 5% plus the additional 4% tax on income in excess of $1 million). Because Massachusetts taxes short term capital gains at 12%, the effective new tax rate on this income will be 16%.
For the typical Massachusetts resident, the sale of a home may be the most likely reason you would have $1 million of income in one year, in the form of capital gain realized on the sale of your home. It is important to keep in mind that you do not pay capital gain tax on the entire sale price of your home. First, capital gain is calculated by subtracting your “basis” in your home from the sale price. Your basis is the price you paid for the property, plus any capital improvements you have made to the property over the course of your ownership. If an owner of the property has died, the basis in the property receives a so-called “step-up” in basis to the value of the property on the date of the owner’s death, which will reduce the capital gain when the home is sold.
Second, keep the capital gain exclusion in mind. A single individual can exclude up to $250,000 of capital gain from tax if they sell their primary residence and have owned and lived in the home for two of the last five years prior to the sale. Married couples can exclude $500,000 of capital gain from tax if one or both of them owned the home and both of them resided in the home for two out of the last five years. A deceased spouse’s capital gain exclusion can continue to be used up to two years after their death if the home is sold during that time and the surviving spouse has not remarried. If a homeowner has moved to a care facility and lived in the home for at least one year during the five years prior to sale, the time spent living in the care facility can be used toward the two-year residence requirement.
Once the final regulations applicable to this tax are finalized its impact may be better understood, and with it the ways in which the tax may be minimized by proper tax planning. In the meantime, if you anticipate a taxable event such as the sale of a home or business that will result in more than $1 million of income, consult your income tax advisor to understand how this new tax will impact you, and to determine if there are ways to reduce its impact.
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 immediate 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.
November 2022
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