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Ask SSB

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Will versus Estate Planning?

Q – I know that I need to do a Will but when I spoke with Jennifer Poles at your office to schedule an appointment for this, she said I would be meeting with a lawyer for estate planning.  I don’t feel like my estate is big enough to do estate planning.  Why did Jennifer say that?

A- Excellent question.  Estate planning is all about making sure that your wishes are carried out when you are not able to carry them out yourself – not only when you pass away, but also during your lifetime should you experience a period of incapacity.  At Samuel, Sayward & Baler LLC we see our role as guiding our clients through that planning process, making sure their wishes are carried out, and helping them achieve the goal of making it easier for their families – that’s estate planning.  Read on for more about this.

Making a Will, or updating an old Will to state your current instructions as to the distribution of your assets at your death is a vital piece of an estate plan, but it is only one piece.  It is also important to plan for the possibility that you may experience a period of incapacity prior to your death.  This involves creating legal documents that designate people you choose to have authority to do things like pay your bills, file your taxes, manage your investments, make decisions about your health care, and use your assets to make sure you are cared for as you wish.

In addition, people often want to make it as easy as possible for family members to settle their estate at their deaths and to minimize costs and taxes.  When you meet with an attorney at Samuel, Sayward & Baler LLC for estate planning, she will also discuss probate avoidance and estate tax planning if these are a concern.

Finally, given the high cost of long-term care these days, the estate planning meeting will include a discussion about long-term care planning options and the advantages and disadvantages of these options.

We look forward to seeing you!

December 2017

© 2017 Samuel, Sayward & Baler LLC

Give the Gift of an Estate Plan – Yours!

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In this season of giving, I thought it would be a good idea to chat about one of the best gifts you can give your family.  It is not a fancy vacation or a 60-inch TV – it is the gift of an estate plan – yours.  When you create an estate plan (i.e. your Will, Durable Power of Attorney, Health Care documents and perhaps a Trust), you are doing something important and valuable for yourself by making sure that your wishes are carried out upon your death or in the event you are incapacitated.  You are also doing an enormous favor for your family who will be left behind to pick up the pieces in the event of your incapacity or upon your passing.

By creating a Durable Power of Attorney, Health Care Proxy, and related documents which empower someone to pay your bills, deal with your insurance, take distributions from your retirement accounts, and make decisions about your medical care should you become incapacitated, you are avoiding the need for your family members to seek a guardianship or conservatorship in the Probate Court.

By creating a Will you are making sure your wishes about the distribution of your assets at death are clear, and that provisions that will streamline the Probate process are in place.  If you take the further step of creating a Trust, which will allow your assets pass to your family outside of Probate, you are greatly reducing the time, cost and aggravation associated with the settlement of estates. You are also preserving your privacy which can protect your estate from claims by creditors, former business partners, or ex-spouses.

In my estate planning  and elder law practice I see many families in crisis either when someone has taken ill or when a loved one had passed away. In situations where planning has been done, family members are in a far better position (in terms of direction, time, and cost) than are those where no planning was done.

This holiday season, treat yourself and your family to the gift of your estate plan. You will gain peace of mind of knowing that you have a plan in place that will make things as easy as possible for the family members you leave behind.

December 2017

© 2017 Samuel, Sayward & Baler LLC

Five Planning Considerations for Blended Families

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The recent death of my teenage heartthrob David Cassidy got me thinking about Friday nights in the 1970’s when The Brady Bunch and The Partridge Family were must-see-TV.  The Brady Bunch were and may still be TV’s most famous blended family.  Mike and Carol Brady met, fell in love, married, and combined their individual families of three children apiece into one harmonious blended family of 6 children which encountered no problem that could not be resolved in a half-hour episode.

In the estate planning context, blended families present some planning challenges.  The parties may have a prenuptial agreement by which they have already agreed upon how assets will be distributed at death, or they may have not given the issue any thought at all.  Here are five issues that deserve consideration when planning for your blended family:

  1. Division of Assets at Death. Two threshold questions are how do you and your spouse own your assets and to whom do you wish to leave those assets at death?  For example, if you married later in life after your children were grown and out of the house, you may own your assets individually and each intend to leave your individually owned assets to your respective children at death.  If you married when your children were very young and raised all of your children together, you may have long ago combined your assets and may intend that your assets be divided equally among all of the children.   If you intend that your assets pass not only to your biological children but also to the children of your spouse, this must be accomplished by appropriate legal documents.  The intestate laws that govern the distribution of estate assets in the absence of a Will do not provide for assets to pass to children that are not legal descendants (the biological or adopted children of the deceased).  Those documents can also allocate assets unequally to children and step-children if that is your intention.

 

  1. Planning for the Surviving Spouse. If you want to leave assets to your own children at death, will the survivor of you have sufficient assets to live on? A plan that leaves assets to your spouse with the understanding that she will leave any remaining assets to your children at her death can be a recipe for disaster.  The surviving spouse can change her estate plan or beneficiary designations after the first spouse dies to leave the assets in whatever manner she chooses.  Even if the surviving spouse honors the agreement, liability or long-term illness could cause inherited assets to be lost.  In this situation, a trust can be an appropriate arrangement to ensure that the surviving spouse has the benefit of income or assets during the surviving spouse’s lifetime, and that any remaining assets pass directly to the children of the first spouse to die at the surviving spouse’s death.

But do you want your children to have to wait until their step-parent dies in order to receive their inheritance? What if there is a significant age difference between you and your spouse?  These are all planning questions that need to be addressed in the context of each particular family’s situation.  The best approach may be to split the difference, leaving some assets to children directly at the first spouse’s death, and other assets to the spouse or in trust for the spouse.  This can be an especially important issue when planning for the distribution of retirement accounts in such a situation, factoring in the income tax implications of the various planning choices.

 

  1. What to do with the Home? A blended family may live in a home that is owned by one spouse, or by both spouses who may have contributed equally or unequally to its purchase and subsequent carrying costs.  If the home is owned by one spouse, an important planning consideration is where the surviving spouse will live when the owner-spouse dies, especially if the owner-spouse wants the home or its value to pass on to his children.  A well-structured estate plan can allow the surviving spouse to continue to reside in the home for her lifetime, paying carrying costs in lieu of rent, and then pass the home (or the proceeds from its sale) to the owner’s children.  If both spouses own the home, similar arrangements can be made, with the proceeds divided between both spouses’ children at the death of the surviving spouse, or when the home is sold.

 

  1. Choosing Fiduciaries. Your legal documents may carefully spell out your intentions, but who will ensure those documents are administered properly and fairly? Choosing a fiduciary all members of a blended family feel comfortable with can sometimes be a challenge.  This may be best addressed by choosing a third party or a professional or corporate fiduciary.  Or there may be a family member who all the other family members are comfortable filling that role.  In other families, two children (one from each side of the family) acting as co-fiduciaries is a good solution.

 

  1. Planning for Long-Term Care. Paying for long-term care can be challenging in a blended family where spouses have maintained separate assets and do not intend that one spouse should be responsible for the care costs of the other spouse.  Unfortunately, public benefit programs do not make exceptions for these circumstances, nor do they respect the terms of a prenuptial agreement the parties may have entered into.  Under the rules of those programs all of the assets of both spouses are “available” to pay for the care of either spouse.  If this is not the parties’ intention, consideration should be given to other planning strategies that will not leave one spouse responsible for the other’s care costs, leaving no inheritance for his or her children.

Estate planning for a blended family is not as easy as it looks on TV.  Each family and its dynamics are different, and there is not one correct approach.  However, it is important to take the time to plan thoughtfully for your family, to ensure that the surviving spouse is provided for, and the harmony your blended family has worked hard to achieve continues long after you are gone.

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). 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.

December 2017

© 2017 Samuel, Sayward & Baler LLC

A Panoramic Primer on Probate: Part One

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In 2012, the Commonwealth of Massachusetts adopted the Massachusetts Uniform Probate Code which outlines the laws and procedures for probate proceedings for deceased residents of the Commonwealth.  “Probate” is the administrative process by which assets of a deceased person’s estate are accessed and transferred to the recipients of those assets specified in the deceased’s Will, or if there is no Will, to the heirs of the deceased as determined by law. The person with authority to access and transfer the deceased’s assets is an appointed “administrator” of the estate called the Personal Representative, formerly known as the Executor.  Probate administration includes identifying all the decedent’s probate assets (known as “marshalling the assets”) and debts, filing taxes and paying estate expenses, and ultimately distributing the estate assets.

Probate typically takes at least one (1) year from the deceased’s date of death because creditors have that amount of time to file claims against the estate to collect on the deceased’s debt. Additionally, the complexity of the estate assets, expenses, and relationships between the surviving loved ones can lengthen the time it takes to completely administer an estate. Probate can be avoided through the preparation of an estate plan that best fits your needs and goals.

In general, probate assets are any assets (checking accounts, savings accounts, investment accounts, stock, savings bonds, tangible personal property such as furniture, jewelry or a vehicle, and real estate) owned in the decedent’s individual name which do not designate a beneficiary or co-owner.  In Massachusetts, the types of estate assets, their values, and the family dynamics inform which one of the three main avenues of probate are appropriate.

  • Voluntary Administration:

Voluntary Administration is the simplest, quickest, and least expensive probate process. If a decedent’s estate consists of a vehicle and other tangible personal property and financial accounts valued at no more than $25,000.00 (in addition to the value of the vehicle), and all of the decedent’s loved ones are competent, reasonable, and communicative adults, then a voluntary administration is the favored option.  The appointed Voluntary Personal Representative has limited authority to receive payments of debts due the estate, access and receive the identified tangible personal property and financial accounts, and sell or distribute those estate assets after the payment of outstanding estate expenses and debts. A Voluntary Personal Representative does not have authority to administer real estate property. There is a filing fee of $115.00 to file the Voluntary Administration Statement with the Court.

  • Informal Probate:

Informal Probate is the amenable “middle child” of probate and accommodates a wide variety of situations.  If the decedent’s estate is over $25,000.00 in value, the probate options are immediately narrowed to informal and formal probate.  Informal Probate is commonly a good choice if all of the decedent’s loved ones have those qualities mentioned above, the estate has a number or variety of financial accounts or similar assets, and when the estate owns real estate.  The appointed Personal Representative of an informal probate has full authority to take action in accordance with the laws of Massachusetts, which includes selling real estate. There is a filing fee of $390.00 to file the initial Petition for Informal Probate pleadings with the Court and obtain “Letters of Authority” appointing the Personal Representative.  Note that there are additional fees to publish notice of the pleadings in the decedent’s local newspaper as required under the laws of Massachusetts.

  • Formal Probate:

Formal Probate is the most expensive process and takes the most time relative to the previous options. Formal probate is required if the estate owns real estate that is “registered land,” if an heir’s residence is unknown, or has since died or is incapacitated due to physical or mental disability. It may be warranted when the decedent’s loved ones have poor to nonexistent relationships, or in the event there are numerous or unusual estate assets to probate. The appointed Personal Representative has full authority to take action in accordance with the laws of Massachusetts, which includes selling real estate. There is a filing fee of $405.00 to file the initial Petition for Formal Probate pleadings with the Court and obtain “Letters of Authority” appointing the Personal Representative. Notice of the pleadings must be published in the newspaper at additional cost.

Note that the above filing fees do not include the fees to provide associated legal advice and preparation of the required probate pleadings.

If you are the loved one of a family member who recently passed away, it is important to carefully consider your family member’s assets and your family’s dynamics to determine the best avenue to properly probate the estate. Working together with a knowledgeable attorney to select the most beneficial option and navigate the probate process will ensure the process goes as smoothly, quickly, and cost-efficiently as possible.

November 2017

© 2017 Samuel, Sayward & Baler LLC

Five Questions to Ask Yourself when Choosing a Trustee

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Many people create a Trust as part of their estate plan.  A Trust can be used to avoid probate, reduce estate taxes, manage assets for beneficiaries and provide creditor protection for an inheritance. A key element of a Trust is the Trustee.  The Trustee is the person charged with carrying out the Trust maker’s instructions — “this is the big job.”   Choosing the right Trustee is a key element to ensuring the estate plan you create will achieve your goals.  So how do you choose the right person to serve as Trustee?  Here are five questions to ask yourself about the person you are considering.

1. Does this person have the right qualities to serve as Trustee?  Many people are inclined to choose an adult child to serve as Trustee based on birth order, gender, or geographical location.  These are generally not good criteria for selecting a fiduciary.  The position of Trustee carries with it serious responsibilities. The person you choose should be trustworthy, well organized, possess excellent communication skills, and be fiscally responsible.

2. Does this person have the time to devote to the responsibilities of serving as Trustee?   When someone passes away there are many tasks that need attention.  These include:

– paying debts and expenses
– filing income tax returns
– working with the lawyer, the accountant and the financial advisor
– selling real estate

Even though your Trustee has the authority to hire people to help him or her, ultimately your Trustee is the person responsible for making sure things are done properly and timely. Ask yourself if the person you are considering has the time to devote to the job.

3. What is the relationship between your prospective Trustee and your beneficiaries?   The person who serves as Trustee following the death of the Trust maker will need to deal with your beneficiaries on a regular basis.  A Trustee should be even-tempered, impartial, and have the diplomatic skills to successfully manage disputes that may arise. If your children do not get along well, naming a child to serve as Trustee is a recipe for disaster; naming two children as co-Trustees who do not get along is even worse.

4. Does the person you are considering have the skills to serve as Trustee?  When naming a Trustee, consider the tasks that your Trustee will be required to perform based on the size of your estate, the types of assets you own and the terms of your Trust.  For example, if you own a business or rental real estate, your Trustee will be responsible for managing these assets following your passing until the assets can be sold or distributed.  Does your Trustee understand your business, or is your Trustee experienced in managing rental property?  Is your Trustee savvy enough to negotiate contracts or select capable advisors to assist?  Is the Trustee able to keep accurate records? If your Trust will continue for the benefit of your beneficiaries for some period of time (for example, until your children reach a certain age), does the person you are considering have the financial wherewithal to manage the Trust assets for a long period of time?  This is not to say that the person you appoint as Trustee needs to be a financial wizard, but he or she should be demonstrably fiscally responsible.  .

5. Should you choose a professional Trustee?  If your family members do not get along, if your children are too busy to devote the time that will be needed, or if you do not have a family member who is well-suited to serve as Trustee, consider naming a professional Trustee.  A professional Trustee is typically a bank, trust company, lawyer, or accountant.  Some of the advantages to using a professional fiduciary are:

– experienced in estate settlement and trust administration
– carries insurance to make the estate or trust whole in the event of malfeasance
– does not have a personal stake in the situation

One of the reasons clients shy away from appointing a professional Trustee is because they know there will be a Trustee’s fee.  Keep in mind that anyone who serves as Trustee, including a family member, is entitled to be compensated. In situations where the appointed Trustee is not suited to the position, the cost of poor or negligent administration of the Trust, and often the litigation that results, usually far outweighs the amount that would have been charged by a professional to do the job right.

The person who serves as Trustee is often the key to the success of an estate plan, so choose wisely.  An experienced estate planning attorney can help you make the best decision based on your particular family situation, assets, and distribution plan.

Suzanne R. Sayward, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham.. 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 2017

© 2017 Samuel, Sayward & Baler LLC

Rightsizing

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A movie trailer caught my eye as I was sitting at home on my couch the other night for my 37 minutes of peace per day when, for just a moment, all of my emails are answered, all of my phone calls returned, kindergarten projects are complete, lunches and bags are packed for the following day and two kiddos are sound asleep in their own beds. “Downsizing” opens in theaters this Christmas and, besides looking fabulous, it immediately struck me as a parody of the struggle my clients face day to day as they retire and begin to think about the rest of their lives on a fixed income.  How will we be able to pay our bills? Will our savings be enough? What if we have high long-term care costs?

The movie’s sales pitch goes like this: “Downsizing is about saving yourself.  We live like kings, we got the best houses, best restaurants….In Leisure Lane your $52,000 translates to $12.5 million dollars to live on, for life!” The premise in “Downsizing” is that proactive members of society elect to leave the rest of the world behind and shrink themselves to .0364% of their total mass and volume in exchange for being able to live without worry in the “Small World.”   For my clients, a sale of their family home and a move to a senior living setting can feel the same way.

Ironically, we often refer to this as “Rightsizing.”  For many of my clients, their home is their largest asset.  By age 60, 70, or 80, a home owned for a long time is often fully paid off and has greatly appreciated in value.  My senior clients look at their savings and their income and ask the questions raised above without considering the value of their home and what a sale of that asset could mean for them.  Not only might the sale yield hundreds of thousands of dollars to use for day to day costs as well as long-term care costs, but selling a home may mean significant monthly savings in management and upkeep.  Whether it’s paying real estate taxes for a school district they have not utilized in 30 years or dealing with snow removal, trash removal and lawn maintenance, seniors often don’t realize the albatross their home has become.  Additionally, the day to day grind of grocery shopping, meal preparation, getting around town and juggling various appointments takes a toll.  Why not consider cashing out and opting for an opportunity to “live like kings” within a supportive senior community?

As a result of the innovators who about to come of age in this country, now is the time when the options for community senior living have become nothing short of phenomenal.  Independent living and continuing care retirement communities are popping up in every town in metro-Boston.  These offer seniors considering “rightsizing” boundless opportunities to socialize, remain within their own town limits and age gracefully in a modern, vibrant setting, all while making their savings last and their lives easier.  Most often these communities provide additional support as seniors age and require more care which can be especially important for couples where one spouse’s needs exceed the other’s.  The wave of the future is to “age in place” and “rightsizing” at the right time can make all the difference in the world for some clients.

If you are considering a move and thinking about selling your home, please contact our office.  We work with a team of professionals who can help with logistics and ease the transition of rightsizing.  As for me, I’ll need to find a babysitter so I can catch that movie!

October 2017

© 2017 Samuel, Sayward & Baler LLC

Five Scary Estate Planning Traps

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With Halloween fast approaching, it’s time to turn our attention to ghosts, goblins and other scary things!  Estate planners are not easily frightened – no matter how many do-it-yourself Wills we see.  However, there are things that come across our desks from time to time that give us a good scare.  Here are a few of my personal favorites:

1. Forgotten beneficiary designations. Your Will and Trust are estate plan documents that contain your instructions about the distribution of your assets at your death.  However, your Will only controls the distribution of assets you own in your individual name (with no joint owner or beneficiary designated) and your Trust only controls assets owned by or payable to the Trust at your death.  Assets like life insurance and retirement accounts usually have a designated beneficiary who will receive those assets at the death of the account or policy owner.  That beneficiary designation controls the distribution of those assets regardless of what your Will or Trust may say, and if you are like many of my clients with significant life insurance policies and/or significant retirement savings, those designations likely control the distribution of a large portion of your wealth.

It is common for clients to name their spouse as beneficiary on these types of assets, but that is like leaving your Halloween candy half-eaten, because your work is only half done.  It is just as important to designate contingent beneficiaries properly.  These are the beneficiaries who will receive the asset if the primary beneficiary is not living.  Be thoughtful about this designation and get advice from your estate planning attorney about how to make proper designations.  If you name your children equally as contingent beneficiaries, make sure you understand what happens if a child predeceases you.  The beneficiary designation form may give you the option to pay a deceased beneficiary’s share to his children, but if those children are minors, this could haunt the family for years if a conservatorship is required.  And the family will get a real fright if an ex-spouse receives life insurance proceeds because the designation was not changed after divorce.

2. “Winner takes all” Wills. If a married couple has no children, their estate plan will often leave all assets to each other.  The more difficult question is who should receive the assets when the second member of the couple passes away?  Let’s say Sally decides to leave all of her assets to her sister Jane if her husband Harry does not survive her.  Harry decides to leave all of his assets to his brother Bob if Sally does not survive him.  Sounds simple right?  But this plan is a haunted house of horrors for Jane or Bob.  If Harry dies first, all of his assets pass to Sally, and when Sally dies, all of the assets owned by Sally (including Harry’s assets) will pass entirely to Jane under Sally’s Will, and Bob would receive nothing.  This is probably not what the parties intended. In situations like this, care should be taken to draft the estate plan carefully so that the intended beneficiaries of both spouses benefit as desired.

3. Unfunded Trusts. A Trust document is an impressive and imposing thing to behold.  It carefully set outs the instructions for distribution of assets after death, and includes appropriate administrative provisions that ensure the Trustee can act to manage the Trust assets and pay taxes fairly and appropriately.  When you sign your Trust you should feel a sense of accomplishment.  But signing your Trust document is only the first step in the planning process.  When you create a Trust, your estate planning attorney should give you detailed instructions about how to “fund” your Trust.  Trust funding is the process of re-titling assets into the name of your Trust, or designating your Trust as the beneficiary of life insurance or other assets.  Unfunded Trusts can have serious consequences, including the delay and expense of a probate proceeding, lost opportunities to shelter assets from estate tax, and assets passing outright to beneficiaries with special needs or who are otherwise in need of asset protection. Make sure you follow your attorney’s trust funding instructions and take the time to fund your Trust so that your estate plan will work as intended.

4. Improper estate tax apportionment. If you are a resident of Massachusetts, and the assets you own (bank accounts, real estate, life insurance, retirement accounts, etc.) are worth more than $1 million at the time of your death, your estate will need to file an estate tax return with the Commonwealth of Massachusetts, and pay any estate tax that is due.  If you leave your estate (including any assets passing outside your estate) equally to your children or other heirs, and your Will directs your Personal Representative to pay the estate taxes from your estate before distributing the remaining assets to your heirs, all is well.  The tax will be paid “off the top”, and your heirs will each receive an equal share of what remains in the estate and the assets passing outside the estate, with the tax burden being shared equally by the heirs.  However, if you leave assets passing outside your estate differently than your estate assets (for example, if you leave your IRA to a favorite grandchild), you need to consider how the estate tax will be paid.  Unfortunately, many standard estate tax provisions in Wills or Trusts fail to take into account how the assets are being distributed, particularly those assets (like retirement accounts or life insurance) that may pass by beneficiary designation in a different manner than your other assets.  The hair-raising result may be that certain beneficiaries end up paying a disproportionate share of the tax.  This is not only inequitable, but can result in some serious family disharmony.

5. Real estate with no tenancy. Have you ever looked closely at the deed to your home? If you are married, you should see your name and your spouse’s name, followed by some words that have important implications for the ownership of your property and what happens when you pass away.  These words specify the different forms of “tenancy” for real property in Massachusetts.  Owning property as “tenants in common” allows each individual owner to pass on her share of the property free from any claim by the other owner.  At an owner’s death, her interest in the property will be subject to probate and will be distributed to her heirs under the terms of her Will.  The surviving owner will have no say in who inherits the other owner’s interest in the property, and will have no claim to that interest unless the other owner is the recipient of that interest under the deceased owner’s Will.  Property owned as “joint tenants” or as “tenants by the entirety” (the form of joint ownership for married couples in Massachusetts) has a different result. Upon the death of a joint owner or tenant by the entirety, the deceased owner’s interest passes automatically (without probate or any other action required) to the surviving joint owner.  Beware of real estate with no tenancy indicated after the names of the owners.  If that is the case, the property is deemed to be held as “tenants in common” and the surviving owner may be spooked by the realization that he does not own the entire property when the co-owner dies.  Even if the co-owner is the beneficiary of the deceased owner’s estate and becomes full owner of the property in that manner, it will not be without significant delay and expense that could have been avoided with proper planning.

Like the house that hands out the full-size candy bars on Halloween, an experienced estate planning attorney can be your best bet for making sure your estate plan operates as you intend so your beneficiaries have no unwelcome surprises.  Happy Fall and an enjoyable Halloween to all!

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). 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.

October 2017

© 2017 Samuel, Sayward & Baler LLC

Ask SSB

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Q:       How do I choose who to name as my executor, power of attorney, and health care agent?  I don’t want to hurt any of my children’s feelings.

A:        It can be hard to decide who to name to these roles, especially if you think a child will be upset if not chosen.  While you don’t want to make a child feel slighted, the duties and obligations of your executor (now called a Personal Representative), Attorney-in-Fact under your durable Power of Attorney, and your Health Care Agent are substantial and you must appoint a person who can carry out these responsibilities. The role of Personal Representative and Attorney-in-Fact require a person who is well-organized, not a procrastinator, and willing and able to move a project forward to a conclusion.  He or she should be able to work well with others, such as attorneys and accountants, and also get along well with family members and keep them informed.

Your Health Care Agent should be someone you are comfortable speaking with about your health care wishes and who you can trust to carry out your instructions.  Your health care agent should be able to communicate with your health care providers, not be afraid to ask questions or request explanations, and be able to advocate for you if necessary.

In complex situations or where significant discord between family members is expected, a non-family member may be the best choice.  In any event, you should discuss your concerns with an experienced estate planning attorney who will help you make the right choices.

September 2017

© 2017 Samuel, Sayward & Baler LLC

What Surprises and Worries Retirees?

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If you’re old enough to be thinking about retirement, one way to get some insight is to ask individuals who have already retired. That’s what the Wall Street Journal (WSJ) did recently, and though many of the retirees’ reports do not seem all that surprising, they are worth attention if you are within 10 years of retirement or already retired. Here’s some of what WSJ reader retirees reported.

Money and Health

Worries about money (48%) and health concerns (42%) are at the top of the list for keeping retirees up at night. Of the 48% who worry most about money, more than half were concerned about not having saved enough to last their lifetime to accommodate their basic lifestyle needs. Almost a third were concerned they might not have enough even for emergencies and health care costs. For people worried about money, expenses for their cars, travel, healthcare and household exceeded what they had spent before retirement. A recent report of the Employee Benefit Research Institute cited in Financial Advisor, supports the view that travel and other household expenses are actually higher for at least the first two years of retirement than during work years, for close to half of newly retired persons. Many of the people who reported having money and health concerns said they were particularly surprised at how high their Medicare premiums were.

Relationships

Relationships were another area of concern, mainly the fear that leaving work will mean missing out on being part of the team or work “family.”  Retirees who dealt successfully with relationship concerns said that willingness to take risks was key. An example of taking risks was learning something new, which often was rewarded by successful second careers and new relationships. First time exercise classes, volunteering or part-time work had similar results for many people. Some WSJ readers said they were surprised at how quickly they shed their work lives and began to enjoy “the luxury of time” …. an unhurried life and control over the day’s activity or inactivity.  The most poignant comments about relationship concerns were the comments about mortality. For those whose spouses, partners or close friends passed away before they were able to enjoy each other in retirement, regret about time not well spent was profound.

Rewards of Planning

Careful retirement planning paid off for many retirees. Examples cited include researching decisions on when to file for Social Security, with a variety of different views given on the subject. Some favored waiting until age 70 to maximize social security payouts while others preferred taking it earlier to allow minimum use of savings. Understanding Medicaid choices and costs was another “careful planning” topic, as was reducing debt before retirement.

Some retirees did not plan well or perhaps at all. Although the WSJ reader report is not a scientific random sample survey, it offers a cautionary counterpoint to the suggestion that expenses during retirement are less than during work years.  Putting together a solid estimate of current and expected expenses and understanding Medicare do not require a great deal of time or cost. If you haven’t done this research yet, spending an hour with your checkbook and credit card statements and the Medicare website (www.medicare.gov) and your trusted advisor is a good first step. Updating your conclusions each year as your retirement timing goal gets closer will allow you to avoid surprises.

Samuel Financial LLC is located at 858 Washington Street, Dedham, MA 02026 and can be reached at 781.461.6886.  Securities and advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment adviser. Fixed Insurance products and services offered through CES Insurance Agency.

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