Many people want a Living Will because they want their family to know that they don’t want to be kept alive if they are in a vegetative state. But what if you know what’s going on around you? Does that change your outlook on life-sustaining treatment? Or not?”
Attorney Brittany Hinojosa Citron discusses Living Wills and End of Life Care. Please watch and if you have any questions or want to learn more please call us at 781 461-1020.
In my estate planning practice, I advise my clients about the different documents that make up an estate plan, including Wills and Trusts. Both Wills and Trusts are used to pass assets on to beneficiaries at death. However, there are distinct advantages to using a Trust over a Will. Here are five ways in which a Trust beats a Will.
1. A Trust can be used to Avoid Probate – a Will cannot. Probate is the process of changing the title on assets when someone passes away. Assets that are owned in a deceased person’s individual name and for which there is no named beneficiary are no longer accessible once the owner of the asset has died. In order for family members to gain access to accounts or other assets in the deceased’s individual name, they must file a petition with the probate court and wait for the court to approve the Will and appoint the Personal Representative. This can be a long and costly process during which bills cannot be paid and assets cannot be managed. A Trust is an excellent probate avoidance tool because assets that are owned in the name of a Trust are immediately accessible to the trust-maker’s designated successor.
2. A Trust can provide Creditor Protection for the Inheritance you Leave to Beneficiaries – a Will cannot. Many people worry that the inheritance they leave to their children will be lost to their children’s creditors such as a divorcing spouse, unpaid credit card bills, a bankruptcy, a business loss, or a lawsuit. Sadly, this is often the case when assets are distributed to beneficiaries via a Will. A Trust allows the maker to safeguard an inheritance from the easy reach of the beneficiaries’ creditors by keeping the assets out of the name of the beneficiary. Ownership of the assets remains in the Trust. The beneficiary will have access to the assets in accordance with the directions you leave in your Trust. You may name your beneficiary to serve as Trustee, allowing the beneficiary to manage her own inheritance. By leaving assets to your beneficiaries via a Trust rather than outright via your Will, you can ensure that the assets you worked so hard for will be available to your children and future generations and will not end up with the beneficiary’s ex-spouse.
3. A Trust can Protect Government Benefits for a Person with Disabilities – a Will cannot. If you have a child, grandchild or other beneficiary with disabilities, then a Trust is a must. If you leave assets to a person who receives needs-based government benefits via your Will, it will place your beneficiary in the difficult position of either losing those benefits, or transferring the inheritance into a Trust of which the state must be the beneficiary at the beneficiary’s death. Unless the inheritance you are leaving is so significant that the monetary and medical benefits available to the person through programs such as Social Security and Medicaid are no longer important, then making sure that those government benefits continue to be available is vital. Leaving assets to a person with disabilities via a Trust is the best way to ensure those government benefits are preserved and that the inheritance you leave will be available to pay for expenses that are not covered by those benefits, which while vital to many, are limited in their scope.
4. A Trust makes it Easier to Manage Assets for an Incapacitated Person – a Will cannot. If a person experiences a period of incapacity during their lifetimes, they will need someone to pay their bills, manage their investments, maybe sell their house, etc. The worst situation to be in should this occur is to have done no estate planning at all. For those with no estate planning in place, family members or another interested party will need to petition the court to be appointed as the Conservator for the incapacitated person in order to obtain authority to manage the assets. This is an expensive, time-consuming, and public process. A basic estate plan will include a durable Power of Attorney which is used to appoint a person to manage one’s affairs in the event of incapacity. A Power of Attorney is a very important estate planning document but it can be difficult for the appointed individual to utilize with banks and other financial institutions which often push back hard on someone attempting to access an account using a Power of Attorney. Banks and other financial institutions do not have the same hostility toward Trust accounts. The successor Trustee of a Trust can easily manage the Trust assets and use them for the benefit of the trust-maker in the event of the trust-maker’s incapacity
5. A Trust can Administer Assets for Minor Beneficiaries without Court Intervention – a Will cannot. Leaving money directly to a minor (under age 18) creates an administrative nightmare because under the law, a minor does not have the legal capacity to receive assets. The parent of the minor does not have the authority to act as the child’s legal representative until the court says so. As such, if you die with a Will that leaves money to minor beneficiaries, or if you name a minor as the beneficiary of your life insurance or IRA, the court will need to appoint a Conservator to receive that inheritance for the minor. The Conservator will be required to report annually to the court and the court will appoint an overseer (guardian ad litem) to make sure the Conservator is doing his or her job for your minor beneficiaries. This means huge costs and long delays in administering funds for minors. It also means that when the minor turns 18, he or she will be entitled to receive all of those assets and will be free to do with them as he or she wishes (think, fast cars, spring break, and lots of shopping). Creating a Trust to receive assets passing to a minor, or even to a young adult beneficiary, is the best way to ensure that the court is not involved in the process, that the person you want to manage assets for the beneficiary is able to do so, and that the beneficiary may use the assets only for purposes you decide are important and/or at ages that you dictate.
These are just five of the many ways in which a Trust is superior to a Will. If you want to learn more about whether a Trust is right for you, call us or email us to schedule an appointment with one of our experienced estate planning 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 and Trust 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.
September, 2024
© 2024 Samuel, Sayward & Baler LLC
Attorney Leah Kofos discusses, Estate Planning Hurdles, 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 is not often that sports and estate planning intersect, but two of my favorite things did so recently when the New York Times (and many other sources) reported that the Grousbeck family, the controlling owner of Boston Basketball Partners LLC which owns a majority interest in the Celtics, announced that it has decided to sell the basketball team. The Celtics’ statement said the sale was prompted “after considerable thought and internal discussion” by “estate and family planning considerations.” Although the statement was short on details, it is suspected that 90-year-old H. Irving Grousbeck is the one driving the sale. His 63-year-old son Wyc Grousbeck, one of Irving’s four children, owns a relatively small stake in the team himself, but manages his family’s controlling interest.
So why would you want to sell the Boston Celtics, a team that less than two weeks before the sale was announced won their 18th NBA Championship and have most of their team under contract for the foreseeable future? For estate planning reasons, of course! Here’s some insight into what Irving and his estate planning attorneys might be thinking.
Taxes Might Be Driving the Team Bus
Irving and his ownership group bought the team for $360 million in 2002. Today, after winning its latest championship, the team is worth an estimated $4.7 billion. That’s a nice return on investment, but nothing comes without a price.
If Irving dies owning an interest in the Celtics, that interest will be an asset of his estate, and the value of that interest will be subject to estate tax at his death. Although Irving hails from Northampton, Massachusetts (which might explain his interest in owning the hometown team), he currently lives in Portola Valley, California. Although the weather may have played a part in the decision to move west, there is also an estate tax advantage. California (unlike Massachusetts) is one of the majority of states that do not impose a separate state estate tax on its residents.
However, when you own an interest in an asset that’s worth billions of dollars (not to mention the value of your other assets), you need to worry about the federal estate tax, which is a tax imposed on assets owned at death which exceed $13.6 million (in 2024). Assets over this threshold are taxed at a whopping 40%.
So how does selling the team help Irving potentially save estate tax for his family? If Irving sells his interest, he will still have the same amount of assets (less some capital gain tax of course), but rather than an interest in a basketball team, he will have cash. Cash is much easier to plan with. Here are some ways Irving might use that cash to save some estate tax:
Again, easier to do any of these things with cash than with an interest in a basketball team. If Irving is serious about gifting, he can reduce the value of his taxable estate significantly, benefiting his family and charity in the short term, and benefitting his family in the long term by reducing the estate tax they will have to pay at his death. Keep in mind that for every dollar Irving gives away he is likely saving his family $0.40 in estate tax when he dies.
Another reason to cash out now is the estate tax that is likely to be due at Irving’s death. Whether Irving dies before or after the current estate tax law sunsets, and even if Irving makes gifts to reduce the value of his estate, the federal estate tax payable on Irving’s estate will be significant. And the IRS does not accept Celtics tickets, even if they are courtside playoff tickets, in payment of the estate tax bill. They deal in cash only. So, better to liquidate a large asset now and free up some cash for the estate tax bill that’s coming due. When you are 90 years old, that bill could come due and payable sooner rather than later.
Succession Planning Is Difficult On and Off the Court
When you have multiple children and one special asset, planning can be challenging. That asset could be a family business, a beloved vacation home, or a racehorse. All of these things are valuable, valued by some or all family members, and illiquid – a difficult combination.
Wyc has done a great job being the face of the majority ownership group for years. However, Irving probably wants to benefit each of his children equally in his estate plan, even if only one of them has given him the joy of an NBA championship this year.
If Irving dies owning the team, Wyc may want to keep the team, but his siblings may want to sell, creating potential family disharmony. Sometimes, it’s possible to give one child who may be involved in the family business, for example, that particular asset and give other assets to the other children while still equalizing the value of assets everyone receives and maintaining family harmony. And it may even be the case that Wyc’s siblings care nothing about basketball and would be happy for him to receive Irving’s ownership interest in the Celtics when Irving passes if they get other assets of equal value. The problem for Irving is that when you have a basketball team that’s worth a whole lot (and likely to keep appreciating in value, at least in the short term) it’s hard to equalize things for your other three children unless you have a whole lot of other assets. Selling Irving’s interest in the team now will allow for easier equalization of his assets among his children at his death, which will simplify Irving’s estate. This is an issue faced not just by Irving, but by the owners of all professional sports franchises.
Although we estate planning attorneys may make it look easy, estate planning is complicated – especially for those individuals who hold our beloved sports teams’ destinies in their hands. Assuming you don’t own a professional sports franchise, your personal estate planning situation may not be as complex, but good estate planning advice is important for everyone who wants to make sure their assets pass efficiently and harmoniously to their intended recipients.
Maria Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham (and a Boston Celtics fan). 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.
August 2024
© 2024 Samuel, Sayward & Baler LLC
Attorney Brittany Hinojosa Citron discusses Why Your Children and Relatives Need an Estate Plan. Please watch and if you have any questions or want to learn more please call us at 781 461-1020.
Ever thought about who would look after your pets if something unexpected happened to you? If so, you are not alone as the welfare of your animal companions during a health crisis or should they outlive you are critical considerations for responsible pet owners. Here are five strategies available to ensure the continued care of your pets in the event of your incapacity or death.
1.Designate an Emergency Caregiver and Share Information
One of your first steps you can take is to put down in writing information about your pets. For example, you may wish to include a pet’s typical feeding schedule, food they can/cannot eat, medications they take, the veterinarian they visit, any unique habits, and their favorite toys. Next, designate one or more individuals to be the Emergency Caregiver for your pet. Share the Emergency Caregiver’s contact information with your veterinarian. Identify the Emergency Caregiver on clearly marked documentation on/near the inside of your front door and have a small card in your wallet with the Emergency Caregiver’s information on it. Provide your written instructions to the Emergency Caregiver – by doing so, you are sharing information that not only keeps your pet healthy but also helps to keep a routine in place for your pet during a potentially stressful time. Finally, consider giving a set of keys to your home to the Emergency Caregiver.
2.Give Your Attorney-in-Fact the Power to Pay for Your Pet’s Care
A Durable Power of Attorney can provide for pet care in the event of your incapacity. This document can authorize the appointed individual (your Attorney-in-Fact) to utilize your assets to pay for your pet’s ongoing care and maintenance. If the Emergency Caregiver and the Attorney-in-Fact are different individuals, they will work together to ensure your pet is cared for appropriately.
3,Designate Caregivers of Your Pets with Your Last Will and Testament (and Make Gifts for Your Pet’s Care, Too)
You can create a Memorandum in connection with your Last Will and Testament as part of your estate plan. This document can specify individuals (Caregivers) to assume custody of your pets and can be updated without necessitating a complete revision of your Will. This flexibility allows you to adapt your plans as circumstances change regarding your pets.
Financial provisions for pet care can also be incorporated into your Will. A specific distribution to the designated Caregiver, typically ranging from $1,000 to $40,000, can be included in your Will to offset the costs associated with pet ownership, such as veterinary care, grooming, boarding, training, etc.
4.Revocable Trust Sub-Trust for Your Pet
If you are contemplating a more comprehensive arrangement, a pet sub-trust within a Revocable Living Trust may be appropriate. Structuring your estate plan this way allows for the allocation of larger sums for pet care while placing the management of these funds in the hands of a trusted individual separate from the Caregiver.
5.Stand-Alone Trust for Your Pet
If you have a pet that may have substantial longevity or exceptional care requirements (horses, birds, tortoises, etc.), a stand-alone pet trust might be the most suitable choice for you. However, it is crucial to ensure that the funds allocated to the Pet Trust are proportionate to the pet’s needs, as courts may intervene if the amount is excessive.
Integrating pet care provisions into your estate planning is a prudent step to care for your pets. Whether through arranging an Emergency Caregiver or creating simple Will provisions or more complex trust arrangements, numerous options exist to ensure the continued well-being of your beloved animal companions in the event of your incapacity or death. At Samuel, Sayward & Baler LLC, we help pet owners determine the most appropriate strategy for their pet’s specific needs. If we can help you incorporate pet care into your estate plan, please contact our office to schedule a meeting with one of our attorneys.
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 Immediate Past President 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.
August, 2024
© 2024 Samuel, Sayward & Baler LLC
Attorney Suzanne Sayward discusses our summer 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 it comes to estate planning, understanding how major life events like marriage and divorce can affect your estate is crucial. These events can significantly impact the distribution of your assets if they are not properly addressed in your estate plan. Here’s what you need to know to ensure that your estate plan remains effective and reflects your current wishes.
Marriage: Premarital Wills
If you get married after executing a will but you never get around to updating your will to include your spouse, your premarital will stays in place at your death. However, Massachusetts law allows the surviving spouse to take his or her intestate share of your estate before your property is distributed under your will. The surviving spouse’s intestate share is the share that the spouse would have received if you died without a Will. This is called an “elective share” of your estate, and your spouse can claim this share regardless of what your premarital will says.
If your premarital will gives property to your child who was born before your marriage and who was from a prior relationship (i.e., not also your spouse’s child), then the surviving spouse’s elective share is taken from the portion of the estate that you did not give to such child. The amount of the elective share that the surviving spouse can take depends on several factors, such as whether you had children with your spouse, whether either of you had children from prior marriages or relationships, and if neither of you had children but you die with a living parent.
There are exceptions to this rule. If you knew you were getting married, you could have stated in your premarital will that it is being made in contemplation of marriage to your spouse and your will is to be effective notwithstanding any subsequent marriage. But if marriage was the last thing on your mind when you made your will, then you need to revise your premarital will to avoid potential conflicts and ensure that your estate is distributed according to your wishes.
Divorce: Automatic Revocation of Provisions
If you have a will and subsequently get divorced from your spouse, any provisions you made in your will for your spouse are automatically revoked. This also applies to beneficiary designations on life insurance and retirement plans, transfer-on-death accounts, and any other revocable disposition. If your will named your former spouse or family members of your former spouse as Personal Representative of your estate, those designations are treated as if the former spouse predeceased you. However, if you and your former spouse later marry each other again, then the previously provisions in your will are revived.
This automatic revocation only applies if you are really divorced, not if you are just separated, and not if your divorce is not yet final.
Although the automatic revocation of dispositions to your spouse may seem to do the trick, they can wreak havoc on an estate plan and create unintended consequences. You may intend to benefit your former spouse even after your divorce with life insurance or some other asset, but the beneficiary designation is automatically revoked upon your divorce. Additional steps must be taken to ensure that designation will stick after the divorce occurs.
After a divorce, revising your will is essential to remove your former spouse (or include them, if you want to provide for your former spouse) and make any other necessary changes, such as updating your named Personal Representatives.
All this is to say that significant life events, whether through marriage or divorce, can dramatically alter your estate plan and result in unintended consequences. By proactively revising your will and other estate planning documents when these events happen, you can ensure that your estate is handled according to your wishes and that your loved ones are provided for as intended.
Attorney Brittany Hinojosa Citron is an associate attorney with the Dedham, Massachusetts, firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. 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 or to schedule a consultation with one of our attorneys, please call 781-461-1020.
July 2024
© 2024 Samuel, Sayward & Baler LLC
Attorney Suzanne Sayward discusses Our Sale on Estate Plans, 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. For more information about the sale please email Joanne Loetz at loetz@ssbllc.com
Attorney Abigail Poole discusses the importance of maintaining harmony among your children, 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.