Attorney Suzanne Sayward discusses Transferring A Title For A Car After Someone Has Passed Away 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.
Articles and Blogs
Pay Attention to your Deed
A Deed is a document that determines the ownership of real estate. When you purchase your home or other real estate, or if property is given to you, the person transferring the property to you (the Grantor) gives you (the Grantee) a Deed to the property, which is signed by the Grantor and recorded at the Registry of Deeds. For most people, that is the last time they look at their Deed.
In the old days, an original Deed (or Certificate of Title for registered land) was an important document, and people often kept them in their safe deposit box. Over the past decade, land records in Massachusetts have become fully electronic. Once a Deed is recorded at the Registry of Deeds, the electronic copy of that document is the one that matters.
It is possible for you to look at the most recent Deed to your property (or to your neighbor’s property for that matter), your most recent mortgage, homestead, or any other document that has been recorded at the Registry of Deeds on the website for the Registry of Deeds for the county in which your property is located. Go to www.masslandrecords.com, select your county from the state map, and then search for your name.
From an estate planning perspective, your Deed determines the ownership of what is probably your most valuable asset – your home. As part of creating an estate plan, your estate planning attorney should review your Deed to make sure the way your property is owned is consistent with your estate planning goals.
There are various ways to own real estate in Massachusetts if two or more people own property, and the form of tenancy is generally noted after the name of the Grantee. For example:
- A Deed to “John Smith and Jane Smith as tenants in common” means that John and Jane each own a 50% interest in the property independent of each other. If John dies, his interest will not pass to Jane, and will instead pass according to his Will, or if he does not have a Will according to the intestate laws.
- A Deed to “John Smith and Jane Smith as joint tenants with rights of survivorship” means that if John or Jane dies, his or her interest will pass automatically to the surviving owner, and will not be controlled by the provisions of John or Jane’s Will.
- A Deed to “John Smith and Jane Smith, husband and wife as tenants by the entirety” is the form of joint ownership for married couples in Massachusetts, and as above in the case of “joint tenants”, the property will pass to the surviving spouse on the death of the first spouse.
- A Deed to “John Smith and Jane Smith”, with no tenancy indicated after the names of the Grantees, means the property is owned as tenants in common. Not indicating a tenancy on a Deed to two or more people is often an oversight that can have serious consequences. A probate proceeding will be required at the death of an owner of the property. This is particularly unfortunate when the lack of tenancy on the Deed goes unnoticed until just prior to the sale of the property, in which case the sale will be significantly delayed, if not lost, until a probate proceeding is commenced and a Personal Representative can be appointed for the deceased owner’s estate.
For estate planning purposes, property may be transferred from an individual’s name to a Trust to avoid probate, or for estate tax savings or asset protection reasons. However, if your Deed is and will remain in your individual name, it is important to make sure the way you own your property is consistent with your planning goals.
It is important that the Deed to your property not be changed by anyone but an attorney who is experienced in real estate matters. Mistakes in the names of the Grantor or the Grantee, in the type of tenancy indicated, or in the legal description of the property being purchased or transferred, can create serious title issues, delays, expense and no end of headaches.
I was recently surprised to hear from a client that a bank, in connection with a mortgage loan transaction, changed the deed to the client’s property to add a child on to the deed. This change, although accomplishing the bank’s objectives regarding the mortgage transaction, changed the manner in which the property will be owned following the client’s death in a way that was not at all consistent with the client’s wishes or the client’s estate plan. Transferring title to real estate falls under the category of things you should not undertake on your own, nor should you sign a Deed prepared by someone else without having an attorney review the Deed and discuss with you any implications of the change in ownership.
Changing a Deed can also have tax implications, can expose the property to the creditors of a new owner, and can void Homestead protection. There is no end to the headaches and unintended consequences that can result from changes to your Deed, whether properly drafted or not. Take a look at the Deed to your home, make sure that the ownership reflected on the Deed reflects your wishes, and if it does not, or if you are not sure, ask your estate planning attorney to review it with you to be sure it is consistent with your planning goals for that property.
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.
June 2022
© 2022 Samuel, Sayward & Baler LLC
Is a Voluntary Probate Right for You?
By Attorney Abigail V. Poole
After a loved one passes away, sometimes probate of one or more assets held in the deceased’s name is necessary. Probate is the process by which a person is given legal authority by the court to access, manage and distribute the assets titled in the individual name of the deceased at the time of death. There are three (3) common types of probate in Massachusetts from which to select depending on assets, family dynamics, and other factors. The simplest, quickest and least expensive type of probate is a voluntary administration.
A voluntary administration is available if the deceased died with $25,000 or less in total probate assets, plus not more than one (1) vehicle in his or her individual name. Other than the vehicle, the assets can be bank accounts, certificates of deposit, unclaimed property, stock, and savings bonds. However, a voluntary administration may not be filed for estates where the decedent owned an interest in real estate. If a Voluntary Personal Representative later discovers assets that cause the total estate value to be more than $25,000 or the Voluntary Personal Representative requires full legal authority to administer an aspect of the estate, the voluntary administration can be converted to one of the other types of probate.
A great example of when a voluntary administration may be a good fit is the situation where the surviving spouse discovers $15,000 of stock in the deceased spouse’s individual name. The surviving spouse may file a voluntary administration and once the voluntary statement is certified by the court, that surviving spouse will be able to gain access and direct the sale of the stock and distribution of the proceeds, or direct the transfer of the stock to him- or herself.
At Samuel, Sayward and Baler LLC, an experienced attorney will assess the deceased’s assets and other relevant information to assist you with determining the type of probate that best fits your situation. This thoughtful and comprehensive approach to filing for the most suitable probate process means that you will be better prepared to confidently address your current and future estate responsibilities.
Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of trust and estate planning, estate settlement and elder law matters. She is an active member and current 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 ssbllc.com or call 781/461-1020.
May, 2022
© 2022 Samuel, Sayward & Baler LLC
Top 5 Reasons to Create an Estate Plan During National Elder Law Month
Welcome to May! Not only is it the month of flowering trees, flowering shrubs, and well, flowering flowers, it is also National Elder Law Month. Elder law attorneys advise clients about a variety of issues, one of which is estate planning. However, estate planning is not just for older adults. As an estate planner and elder law attorney, I can cite a number of reasons why everyone over the age of 18 should have an estate plan. But what motivates most people to pick up the phone and make an appointment with an attorney to create their Will? I conducted a very un-scientific study of why clients decide to create or update their estate plan.
Here are the top five reasons that people decide to create or update their estate plan – in descending order.
5. They want to provide instructions for end-of-life care. Many people feel strongly about how they want to be cared for at the end of their lives. So long as someone is healthy enough to articulate instructions for their own care, they may direct the course of their care. But if a person is unwell and unable to articulate those instructions, then the only way their wishes can be carried out is if they have provided advance instructions about the care they wish to receive and appointed someone who has the legal authority to implement those instructions.
4. They want their estate to avoid probate. Probate avoidance is one of the primary reasons that people create an estate plan and rightfully so. Probate is the process of changing the title on assets when someone passes away from the deceased person’s name to the name of the legal representative for the estate. Probate is costly, it is a public proceeding, it invites contests and it takes a long time. Luckily, avoiding probate is fairly easy. Only assets that are in a person’s individual name at the time of death and that do not have a joint owner or beneficiary designated to receive them need to be probated. Owning assets jointly with another person (when appropriate), making sure there are beneficiaries designated on assets such as IRAs, 401Ks, annuities, and life insurance, and creating and funding a Living Trust, are all ways to avoid probate.
3. They want to reduce or eliminate estate taxes. The estate tax is a tax imposed on the value of assets an individual owns (or is deemed to own) at death. There is both a federal estate tax and a Massachusetts estate tax. The good news is that federal law gives each person a $12 million exemption from federal estate tax. As such, there are very few people who need to pay federal estate tax. The bad news is that Massachusetts grants its citizens only a $1 million freebie from estate tax. For many residents of Massachusetts who own a home, have a retirement account, and own life insurance, this $1 million threshold is quickly reached. Undertaking planning to reduce or eliminate the estate tax that their families will pay from their estates at death is a goal for many whose estate will subject to the estate tax.
2. They want to protect their assets from having to be spent down on long-term care costs. Many clients tell us they are concerned about the cost of long-term care and worried that those costs will consume all of their assets. Given the very high cost of long-term care, whether delivered at home or in a skilled nursing facility, these concerns are warranted. Learning about the options for planning to protect assets from needing to be spent down on long-term care well in advance of needing such care is vital to the success of achieving this goal. Learning the pros and cons of such planning, and why for some it may not be necessary, are also important. Long-term care planning is very specific to each individual, and is an area in which it is especially important for each client to get advice about their own particular circumstances.
1. They want to provide for and protect their loved ones. The number one concern that clients have is for their families. Whether it’s parents with young children, older folks with grown children, a married couple with no children, or the favorite auntie or uncle, they all want to make sure their loved ones are taken care of when they are no longer around to do so. This means different things at different stages of life. For parents of young children, it means naming guardians for those children and ensuring there are resources available to raise them. For those with adult beneficiaries, it may mean setting up their plan to provide creditor protection for the inheritance they leave to children or nieces and nephews. And for older couples, making sure that the survivor of them is left in the best possible circumstances upon the death of the first spouse is of paramount concern.
There are many reasons people make the decision to create or update their estate plan on a given day. Sometimes it’s circumstantial, such as the death of a loved one or a medical diagnosis. But underneath those circumstances is a desire to ‘get one’s house in order’. If we can help you with your estate or long-term care planning, please contact us to schedule a time to speak with one of our experienced estate planning and elder law attorneys.
Attorney Suzanne R. Sayward is a partner with the Dedham law firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit our website at www.ssbllc.com or call 781/461-1020.
May, 2022
© 2022 Samuel, Sayward & Baler LLC
Demystifying the use of Irrevocable Trusts for Long Term Care Planning
To our Clients and Friends:
Please join us for the next presentation in our Smart Counsel Series on Thursday, May 19, 2022, from 6:00 pm to 7:30 pm in person* at our office at 858 Washington Street, Suite 202, Dedham, Massachusetts OR virtually via Zoom.
If you have ever wondered whether an Irrevocable Trust for long-term care planning is right for you, join us for this program, Demystifying Irrevocable Trusts for Long-term care Planning.
Attorneys Suzanne Sayward and Frank Mulé will discuss the advantages and disadvantages of using an Irrevocable Trust to protect assets from having to be spent-down on long-term care costs. Attendees (both in person and virtual) will have an opportunity to ask questions.
For those who attend in person, we’ll have wine, cheese and other light refreshments. For those who attend virtually, you’re on your own for snacks!
Contact Victoria Ung at 781/461-1020 or ung@ssbllc.com to reserve a spot for you and a friend.
The program is free but space is limited if you would like to attend in person, so don’t delay!
Suzanne R. Sayward
Maria C. Baler
Abigail Poole
Frank Mulé
Megan Bartholomew
* Subject to change. If rising COVID cases mean that we have to cancel our in person presentation, registrants will be able to attend virtually.
A Trap for the Unwary: Gifting and Long-term Care Medicaid Benefits
“I want to give some money to my child – is that okay to do?” I often hear this question from elderly clients who visit me for the purpose of long-term care planning. The short answer is that you are free to gift a certain amount to your adult children without filing gift tax returns but it may adversely impact your eligibility to receive Medicaid benefits to pay for long-term care in a nursing home later.
Let’s say you are contemplating giving $16,000 to your child. From a tax perspective, an individual is permitted to give up to $16,000 to a recipient each year without filing a federal gift tax return. This is the annual gift tax exclusion amount as of 2022. Annual exclusion gifts may be made to multiple recipients. For example, you may give $16,000 to each of your children Alex, Ben and Cathy during 2022. If you are married, each spouse may give $16,000 to each child, meaning that Alex, Ben and Cathy may each receive $32,000, allowing you to gift $96,000 in 2022 without filing federal gift tax returns.
However, gifting almost $100,000 to your children in 2022 will be problematic should you require Medicaid to pay for your long-term care in a nursing home within the five-year period following the gifts. Medicaid is a joint federal/state government benefits program that requires specific medical and financial criteria are met before someone is eligible for Medicaid benefits to pay for long-term care nursing home costs. Upon application for such benefits, MassHealth (the agency that administers the Medicaid program in Massachusetts) will require an applicant to provide detailed financial information going back five years. This includes disclosing any gifts made during that period. If you made gifts during the so-called five-year look-back period, Medicaid considers the gifts to be disqualifying transfers. The reasoning is that if you had retained the money you gifted to your children, you would have been able to pay for the nursing home expenses out of your own pocket instead of Medicaid paying for you.
If Medicaid determines the gifts are disqualifying transfers, the recipients must return the gifted money to you to “cure” the transfer so you can pay the nursing home costs out of pocket until you are financially eligible for Medicaid again. If the money is not returned, the person who made the gift will be ineligible for benefits for some period of time. The period of ineligibility is calculated by dividing the amount of the gift by the average daily cost of a nursing home as determined by the state (currently $410). For example, that $16,000 gift to your child would result in around 39 days of ineligibility for Medicaid benefits. The real kicker is that the 39 days of ineligibility does not begin until the applicant “would otherwise have been eligible”. That means the disqualification period for making a gift begins to run after the applicant has run out of money. This trap for the unwary applies not only to gifts of money but also to gifts of other assets, such as real estate.
Making gifts of your assets to your children while also planning for a future in which you may require long-term care in a nursing home requires careful navigation. At Samuel, Sayward and Baler LLC, an attorney experienced in long-term care planning can assist you with avoiding such traps so that you and your children have peace of mind in case long-term care is necessary.
Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of trust and estate planning, estate settlement and elder law matters. She is an active member and current 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 ssbllc.com or call 781/461-1020.
April, 2022
© 2022 Samuel, Sayward & Baler LLC
Five Reasons to Consider a Prenuptial Agreement
Five Reasons to Consider a Prenuptial Agreement
By Attorney Maria C. Baler
As Alfred Lord Tennyson said in his poem Locksley Hall: “In the spring a young man’s fancy lightly turns to thoughts of love”…and an estate planner’s thoughts turn to pre-nuptial agreements. With spring comes the start of wedding season. Although estate planners are romantics at heart, they also know that not all couples live happily ever after.
A prenuptial, or premarital, agreement is a contract between two people who are planning to marry, by which they agree in advance to a division of their assets in the event of divorce or death. Although some skeptics think that pre-nuptial agreements are only for the wealthy, here are five reasons you might want to consider a pre-nuptial agreement if you are headed to the altar.
- Protect Inherited Assets
In dividing a married couple’s property in the event of divorce, all property the couple has brought to the marriage or acquires during the marriage is considered, including any assets a member of the couple may have inherited during the marriage. Massachusetts, like some other states, also allows a judge to consider the opportunity of each party to acquire assets and income in the future, including any inheritance a party may receive in the future. A prenuptial agreement is probably the easiest and best way to protect inherited assets from being considered when dividing assets between divorcing spouses. The agreement can provide that any assets a party inherits during the marriage or may inherit in the future should not be considered during property division in the event of the couple’s divorce. For many couples (and their parents), a prenuptial agreement that is narrowly tailored to protect inherited assets may provide peace of mind that family wealth will not be at risk if the marriage does not work out.
- Protect a Family Business
If an owner or a member of a family business is getting married, this often (or should) raise concern about what will happen to that person’s ownership interest in the family business in the event of a divorce. Will a judge award an interest in the business to the ex-spouse? What will that mean to the family’s ability to continue to operate the business or make business decisions if the ex-spouse has a say in how the business is run? This can be a messy situation, and one which a prenuptial agreement can address. The parties can agree in advance that the party with the ownership interest in the business will keep that interest in the event of a divorce. This will go a long way to providing security for the other business owners and ensure the business can carry on without interference, regardless of how long the marriage lasts.
- Protect Children from a Prior Marriage
Prenuptial agreements are not just for first marriages, and in fact may be even more important for those who have been married before, and who may have more assets to protect and perhaps even children from a prior relationship. Marriage confers certain rights on your spouse under the law, including the right not to be disinherited at death. However, a prenuptial agreement can waive those rights, if appropriate. For example, if two people who have children from prior relationships decide to marry, they may enter into a pre-nuptial agreement that prevents the new spouse from claiming any interest in the estate of the deceased spouse, so that the deceased spouse is assured that his or her assets can be left to their children at their death, without the threat of interference from the surviving spouse. This can be especially important if the children of the deceased spouse are minors, and may need those assets for their support and education. It can be equally important for older children who may be nervous about their potential inheritance being disrupted by a parent’s new spouse. A pre-nuptial agreement will not prevent the couple from leaving assets to each other at death if they wish, but will prevent the surviving member of the couple from disrupting the deceased’s estate plan after the fact.
- Address Long-term Care Concerns
A pre-nuptial agreement can make it clear, especially for couples who marry later in life, that each member of the couple is responsible to pay for their own care costs, including any long-term care expenses, rather than their new spouse bearing any responsibility for those expenses. Often, couples will consider purchasing long-term care insurance to insure against the possibility that care costs will reduce the assets they may otherwise be able to leave to their children. Keep in mind that if qualification for public benefits, such as Medicaid benefits, is necessary, a prenuptial agreement’s provisions will not be honored, and Medicaid will consider the assets of both spouses in determining eligibility for benefits. However, if the marriage is terminated (and in some circumstances, divorce is a long-term care planning choice), the pre-nuptial agreement may prevent the Court from allocating assets in conflict with the agreement.
- Protect Special Assets
Perhaps one spouse has a home they painstakingly restored prior to the marriage. In the event of a divorce, that spouse may want to be sure they are able to keep the house, rather than having it go to their spouse or sold so that the value can be divided between them. Maybe the other party has a partial ownership interest in a ski condo, or a valuable antique car. A prenuptial agreement can address these special assets, and allow the parties to agree in advance how those assets would be treated and divided in the event of a divorce.
Whatever the motivation for creating a prenuptial agreement, the agreement must be created in a way that will ensure it will be enforceable if the parties divorce. Massachusetts courts have established very clear parameters that must be followed for a premarital agreement to be enforceable if, and when, the time comes for the agreement to do what it was created to do – protect assets. First, when creating and negotiating a prenuptial agreement, it is mandatory that both parties have their own attorneys to ensure each party understands how the terms of the agreement benefit and obligate them. Second, in order to be enforceable, Massachusetts courts have held that a prenuptial agreement must be fair both at the time the agreement is signed and at the time it is sought to be enforced. Third, each party to a prenuptial agreement must fully disclose his or her assets, including anticipated inheritances, to the other party. Full and complete disclosure of assets is essential to the agreement’s enforceability. Finally, prenuptial agreements must be entered into freely by each party, without coercion or influence from the other party or outside influences. For this reason, courts have found that the agreement must be entered into far enough in advance of the wedding that neither party feels coerced into signing.
Consider a prenuptial agreement if your assets or circumstances are such that you want added assurance that no matter how matters of the heart may go, your assets and your children will be protected.
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.
April, 2022
© 2022 Samuel, Sayward & Baler LLC
Trust Funding
Attorney Frank Mulé discusses Trust Funding, 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.
A Q&A on the Massachusetts Homestead Law
On this date 11 years ago (March 16, 2011) a new homestead law went into effect in Massachusetts. To commemorate that anniversary, we present a few highlights of the 2011 Homestead law.
What is the Massachusetts homestead law? The Massachusetts homestead law protects a homeowner’s primary residence from forced sale by an unsecured creditor. That means that if you are sued and your creditor obtains a judgment against you, you cannot be forced to sell your home to satisfy the judgment up to the amount of the homestead protection. The homestead protection extends to the homeowner’s family which is defined as spouse and minor (under age 21) children.
How much is the homestead protection? Under the 2011 Massachusetts law, a homeowner is entitled to automatic homestead protection of $125,000. However, homeowners who file a Declaration of Homestead with the Registry of Deeds can increase that protection to $500,000. For married couples where both spouses are over the age of 62, the homestead protection can be doubled to $1 million by filing an ‘elderly’ homestead. Increased homestead protection is also available to disabled individuals.
If a home is owned in trust is the homestead still available? Yes. The 2011 version of the homestead law specifically includes homes owned in trust as eligible for homestead protection. This was an important change made by the 2011 homestead law as the prior law did not include any reference to homes titled in trust which created a lot of uncertainty.
Will a Declaration of Homestead protect the home from a lien for nursing home care costs? No. A Declaration of Homestead will not protect a home from a lien by the Commonwealth of Massachusetts for Medicaid benefits paid on behalf of the homeowner, and this includes benefits paid for nursing home care. There may be other ways to protect the home from such a lien, but the homestead does not protect against governmental liens such as for taxes or Medicaid benefits.
Will a Declaration of Homestead prevent my mortgage holder from foreclosing on my mortgage? No. The protection of the homestead extends only to unvoluntary, non-governmental liens such as judgment creditors.
Is the Homestead protection lost if I sell my home? No. Under the 2011 version of the homestead law, the proceeds from the sale of a home are protected for up to one year following the sale. This is an important protection for homeowners who may be involved in a lawsuit and who want to sell their home and move while the lawsuit is ongoing or those whose home is subject to a judgment. Under the prior law, the homestead protection ended when the home was sold. This means that a creditor could show up at the closing on the sale of the property and collect the debt if there was a judgment. Under our current homestead law, if the proceeds from the sale of the home are invested into a new home within the one-year period following the sale, then the proceeds are beyond the reach of a creditor. The new homestead law protects insurance proceeds received as a result of a fire or other casualty from the reach of creditors for a period of two years.
Do I need to re-file a Declaration of Homestead if I refinance my mortgage? No. The 2011 statute states explicitly that the homestead protection is not waived as to creditors when the homeowner signs a mortgage that includes a waiver of homestead provision. The waiver of homestead provision in the mortgage relates only to the mortgage (which the homestead does not protect against anyway since it is a voluntary lien). This was also an important change made by the 2011 homestead law. Previously, a mortgage filed subsequent to the filing of a Declaration of Homestead terminated the Homestead protection.
While filing a Declaration of Homestead does not make a debt go away, it does protect a homeowner from being forced to sell the home to pay that debt. I often tell my clients that the homestead is like ‘cheap insurance’ – it only cost $35 to file ($36 in Norfolk County) and it can usually be done by the homeowner without the need for an attorney. (If your property is held in a trust, consult with your attorney about filing a homestead to make sure is it done properly). If you have questions about homestead protection or if we can help you with your estate planning needs, please don’t hesitate to contact us.
Attorney Suzanne R. Sayward is a partner with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.
March, 2022
© 2022 Samuel, Sayward & Baler LLC
Five Ways to Take Care of Your Pets in Your Estate Plan
A recently released preliminary study suggests that owning a pet for five or more years may slow cognitive decline in adults 65 years of age or older. As someone who grew up with pets and recognizes the joy, humor, companionship and other benefits that pet ownership provides, that study got me thinking about what could be done to care for the critters that enrich our lives when we become incapacitated or pass away. To start with, the ASPCA suggests creating a contact list of caretakers and documenting your pet’s food, medication and behaviors for emergency purposes. In addition to those recommendations, here are five ways to include your pets in your estate plan, to make sure they are taken care of if you are not able to do so.
- Memorandum
Your Last Will and Testament directs the distribution of your assets after you pass away, including your pets. If you have a specific individual you wish to take custody of and care for your pet after you pass, you may list the pet and individual on a Memorandum. The Memorandum is incorporated by reference into your Will yet permits you to update it if you later get another pet or change your mind about who you would like to care for your pet.
- Gift for Pet Caretaker
The Will can also include a provision that gives a specific amount of money to the selected pet caretaker in order to assist with anticipated veterinary expenses, food, toys, etc. for your pet. Such gifts are usually small, ranging from $1,000 to $40,000, in my experience, depending on the age of your pet and the pet’s anticipated needs.
- Revocable Living Trust Pet Sub-Trust
If you already have a Revocable Living Trust as part of your estate plan and would like to gift a larger amount of money to your pet’s caretaker but prefer that the funds are managed by someone else, then a simple pet sub-trust as part of your Revocable Living Trust may be a good option.
Since 2011, residents of Massachusetts have been permitted to create trusts for the benefit of their pets. The trust is legally binding and must benefit a pet that is alive during the trust creator’s lifetime. There is a manager (Trustee) appointed to administer and distribute the trust money to a separate person who is the pet’s caretaker. The trust describes the purposes for which money may be distributed to the caretaker for the pet’s benefit, such as grooming, training, veterinary care and more. If the amount held in trust is challenged, the court may determine if it is excessive in connection with the needs of the pet, and reduce the amount so long as it will not negatively impact the care, maintenance, health or appearance of the pet. The trust ends at the death of the last surviving pet and directs that the remaining funds, if any, are distributed according to other terms of the trust.
- Stand-Alone Pet Trust
If you are contemplating setting aside hundreds of thousands or millions of dollars to pay for your pet’s expenses because the pet has a long life expectancy or significant health care needs, a stand-alone pet trust may be a better fit for you. But keep in mind that funding the trust with millions of dollars may spell Trouble – as in the pet trust created for Leona Helmsley’s dog, Trouble, who the court determined did not require $12 million dollars to pay for the pup’s lifetime care, and redirected the distribution of a majority of those funds to others. While the stand-alone pet trust must adhere to the same Massachusetts laws mentioned above, it also allows you to include more complex wishes regarding the compensation of the Caretaker and Trustee, and the distributions for your pet’s benefit, such as transportation expenses, boarding, euthanasia and disposition of remains, and more.
- Your Durable Power of Attorney
The above documents address the care of your pet after your passing, but what if you are alive and can no longer care for your pet yourself due to incapacity? In such situations, your Attorney-in-Fact under your Durable Power of Attorney may step in. Your Power of Attorney may direct that your assets may be used to pay for food, medical treatment and other necessities, including keeping your pet at home as long as possible, as your Attorney-in-Fact decides appropriate.
At Samuel Sayward & Baler LLC, we recognize that pets are cherished family members. Happily, there are many options available to ensure your pet is well cared for in the event of your incapacity or death, and we will guide you through the process of determining the best way to provide for them in your estate plan.
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.
March, 2022
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