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Thirteen Estate Planning Terms You Need to Know

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We recently celebrated National Estate Planning Awareness Week during the week of October 19-25, 2020.  Although it is nice to have an entire week each year devoted to raising awareness of the importance of estate planning, I would argue that 2020 has been National Estate Planning Awareness Year, as the COVID-19 pandemic has brought the importance of estate planning to the forefront of everyone’s mind.  Here at SSB we have had a busy year making sure our clients’ plans are up-to-date, and helping new clients put a plan in place so that they, too, can have the peace of mind an estate plan brings in these uncertain times.

As Estate Planning Attorneys, we know Estate planning is incredibly important and not just for the wealthy.  Estate planning is something every adult should do. Estate planning can help you accomplish any number of goals, including appointing guardians for minor children, choosing a health care agent to make decisions for you should you become ill, appointing an agent to handle your financial and legal matters if you become incapacitated, minimizing taxes so you can pass more wealth on to your family members, and stating how and to whom you would like to receive your assets when you pass away. 

While it should be at the top of everyone’s to-do list, estate planning can often feel overwhelming, and estate plan documents can sometimes seem to be written in their own language.  Here are some important estate planning terms you should know as you think about your own estate plan. 

Assets

Generally, anything a person owns, including a home and other real estate, bank accounts, life insurance, investments, retirement accounts (IRAs, 401ks), annuities, furniture, jewelry, art, clothing, and collectibles.

Beneficiary

A person or entity (such as a charity) that is designated to receive assets from an estate, trust, account, or insurance policy. 

Distribution

A payment in cash or assets to a beneficiary who is entitled to receive it.

Estate

All assets and debts left by an individual at death.

Fiduciary

A person with a legal obligation (duty) to act primarily for another person’s benefit, e.g., a trustee or agent under a power of attorney. “Fiduciary” implies great confidence and trust, and a high degree of good faith. 

Funding

The process of transferring (re-titling) assets to a living trust (a trust created during the creator’s lifetime). A living trust will only avoid probate at the trust creator’s death with assets that are funded into the trust during the trust creator’s lifetime, or that will be automatically payable to the trust (i.e. by beneficiary designation) at the trust creator’s death.

Incapacitated/Incompetent

Unable to manage one’s own affairs, either temporarily or permanently; often involves a lack of mental capacity.

Inheritance

The assets received from someone who has died.

Guardianship / Conservatorship

The court-supervised process of appointing a guardian / conservator to make decisions on behalf of an incapacitated or incompetent person, including health care and financial decisions. 

Marital deduction

A deduction that may be taken on the federal and Massachusetts estate tax returns, it lets the first spouse to die leave an unlimited amount of assets to the surviving spouse free of estate taxes. However, if no other tax planning is used and the surviving spouse’s estate is more than the amount of the federal and/or state estate tax exemption in effect at the time of the surviving spouse’s death, estate taxes will be due at that time.

Settle an estate

The process of winding down the affairs of a deceased person, and includes identifying and valuing of assets, paying debts and taxes, and distributing assets to beneficiaries.

Trust

A fiduciary relationship in which one party, known as the trust creator, settlor or grantor, gives another party, known as the trustee, the responsibility to hold property or assets for the benefit of another party, the beneficiary. The trust should be memorialized by a written trust agreement which specifies the trustee’s duties and powers, the trustee’s obligation to the beneficiary, and the beneficiary’s rights to income or principal from the trust.

Will

A written document with instructions for disposing of probate assets after death. A Will can only be enforced through a probate court. A Will may also include the nomination of guardian for minor children.

If you have any additional questions about estate planning, or would like to consult with an experienced estate planning attorney about your own estate plan, please contact our office. We will be happy to assist you in creating a comprehensive plan that is tailored to your unique needs and goals, so that next year when National Estate Planning Week rolls around, you will have something to celebrate!

November, 2020

© 2020 Samuel, Sayward & Baler LLC

Five Things to Know about Unclaimed Property, You and Your Estate

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“Visit findmassmoney.com and get your money today!” You have probably heard the announcement on the radio and thought it was a gimmick or too good to be true. In fact, the Commonwealth of Massachusetts does hold property, such as bank accounts, stock dividends, uncashed paychecks, and insurance refunds, that appear to have been abandoned because no action has been taken with the property for a period of time (3 years for most properties). This so-called “unclaimed property” can range from a few dollars to tens of thousands of dollars or more. An individual, the Personal Representative (Executor) of a deceased person’s estate, and sometimes the heir of a deceased family member can file a claim to receive the unclaimed property. Here are a few things to consider and know about unclaimed property in connection with you and your estate:

Regularly check to see if you have any unclaimed property

It’s easy to visit the unclaimed property website of the Commonwealth of Massachusetts. If you have lived in states other than Massachusetts, visit that state’s equivalent or this website which searches the databases of multiple states and directs you to the appropriate state link to file a claim.

Make it a good estate planning habit to check for unclaimed property annually, such as when you file your taxes each year.

Complete the claim online

The Massachusetts Unclaimed Property Division website requests your name (and your town of residence), then locates all unclaimed property that matches the information you provided (as does the multi-state database). You simply select the claim that applies to you, provide additional information and submit the claim electronically. The Unclaimed Property Division will then mail you documentation to complete and return, then mail a check representing the amount of unclaimed property owed to you. The representatives at the Massachusetts Unclaimed Property Division with whom I have interacted were extremely helpful in answering questions and addressing concerns, so do not hesitate to be in touch with them.

The Personal Representative of your estate will file a claim to receive your unclaimed property after your death

If you do not file a claim to receive any unclaimed property while you are alive, the Personal Representative of your estate will be responsible for doing so. The Personal Representative has a fiduciary obligation to consolidate all assets associated with your estate after your death, including unclaimed property. Typically, it is more complicated for the Personal Representative to receive the unclaimed property because he or she must provide additional documentation, including a death certificate and proof of his or her authority over your estate as Personal Representative via Letters of Authority issued by the Probate Court.

Something to keep in mind is that if significant unclaimed property is discovered several years later, obtaining it for the estate may be further complicated if the original Personal Representative is deceased, or one or more of the beneficiaries of the estate are deceased.

Your surviving heirs may file a claim to receive your unclaimed property after your death instead

If there was no need to appoint a Personal Representative of your estate at the time of your death, and if the unclaimed property amount is less than $1,000, and if the beneficiaries of your estate are undisputed, it is possible to avoid the rigmarole of a probate court proceeding to obtain the unclaimed property. For example, if you have a surviving spouse or a sole surviving child, the so-called “Affidavit of Heirs” form may be completed by the beneficiary instead. The Affidavit of Heirs is unique to the Unclaimed Property Division and provided by the Division representative. It requires the heirs (beneficiaries) of the estate to be identified and to swear the information on the form is true and correct, and the heir is entitled to the unclaimed property.

Deposit your unclaimed property funds upon receipt; beware of taxes!

You should deposit the unclaimed property check upon receipt. If the Personal Representative of the estate receives the check, he or she should deposit it in the estate bank account along with any other estate assets. After the expenses of the estate are satisfied, the Personal Representative will divide and distribute the remaining funds among the estate’s beneficiaries. Keep in mind that income taxes may be payable for the year the unclaimed property is received depending on the type of property claimed. A knowledgeable accountant should be contacted to provide advice on this matter.

It’s good Estate Planning practice to remember to check for unclaimed property in your name annually, so you can save your heirs or the Personal Representative of your estate the trouble of claiming that property after your death. At Samuel, Sayward & Baler LLC, our estate planning attorneys and probate attorneys regularly guide and assist our clients who are serving as Personal Representatives of estates to receive and properly deposit unclaimed property. If you live in Massachusetts and find yourself needing assistance in claiming the unclaimed property of a deceased person, we would be happy to help you.

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 estate planning, estate settlement and elder law matters. She is an active member 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. 

November, 2020

© 2020 Samuel, Sayward & Baler LLC

To Gift or to Loan?

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If you live in Massachusetts you know that the prospect of buying your first home is a daunting one given the high cost of real estate.  Parents often want to help their children with their first home purchase by making a gift or a loan to the child to use toward the down payment.  For parents (or grandparents) who are in a financial position to do this, it is important that everyone involved understand whether the funds are gift or a loan and the consequences of each. This is also an important Estate Planning question. Read on for factors to think through when providing funds to a child.

If it’s a gift,

  • A gift to a person (as opposed to a gift to a charity) is not tax deductible by the person who makes the gift.
  • A gift is not income and should not be reported on the recipient’s income tax return. 
  • For most people, there is no reason to be concerned about gift tax even if the amount of the gift exceeds the annual gift tax exclusion amount of $15,000 (2020) per person per year.  
  • Even though it is unlikely that there will be any gift tax payable (under current law you would need to gift more than $11.6 million over your lifetime before there would be any gift tax payable) you may be required to file a gift tax return (form 709) reporting the gift. 
  • You are not entitled to repayment (this may seem as though it goes without saying, but that is not always the case in my experience).  
  • Making a gift could help your child qualify for a mortgage and you may need to provide a gift letter. 
  • Making a gift may be advantageous to you from an estate tax perspective as the gifted assets will reduce the value of your estate for estate tax purposes.
  • If you have more than one child, consider whether you want to make any changes to your estate plan to ‘even up’ the distribution of your estate among your children to account for the gift to one child.

If it’s a loan, 

  • It is important to document the loan with a Promissory Note. 
  • Even if you do not choose to charge interest on the loan, the IRS may think differently and may ‘impute’ taxable interest income to you.  Consult with your accountant to make sure you understand the income tax consequences of the loan.
  • Interest charged on the loan and paid to you as the lender is taxable income to you in the year received.
  • Consider whether the loan should be secured by a mortgage.  Even if you are not concerned about repayment, doing so may protect your investment in the event your child gets divorced, is sued, files for bankruptcy, etc. 
  • Consider what you will do if the loan is not repaid as expected. 
  • The outstanding balance on the loan will be an asset of your estate and you may want to specify that the Promissory Note should be allocated to the debtor child’s share of your estate. 

Seeing a child settled in their first home is a good feeling for parents and helping a child get there is a goal for many parents.  However, before you hand over that big check, decide whether you’re making a gift or a loan and make sure your child knows as well.   

Attorney Suzanne R. Sayward is a partner with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is certified as an Elder Law Attorney by the National Elder Law Foundation, a private organization whose standards for certification are not regulated by the Commonwealth of Massachusetts.  This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781-461-1020.

October 2020

© 2020 Samuel, Sayward & Baler LLC

Five Things to Consider When Selecting a Nursing Home

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Five Things to Consider When Selecting a Nursing Home

Important elder care decisions are never easy to make. The decision to transition a loved one into a nursing home can be emotional, challenging and overwhelming to say the least.  The advice of an elder law attorney can be helpful in navigating these decisions. There are also numerous factors to consider when faced with this difficult decision, such as your loved one’s required level of care.  Here are five other important factors to keep in mind:

  • Location of Facility

How convenient is the location to family members and friends? What are the visiting hours? Location is vital, as it will determine how often the resident is visited by family and friends. Frequent visits are important as they generally contribute to the resident’s mental and emotional well-being.  Furthermore, frequent unannounced visits allow staff to know that family members or friends are vigilantly overseeing the resident’s quality of care. Additionally, having family members and friends close by ensure that issues can be addressed quickly when they arise.

  • Facility

What is the physical appearance of the facility? Is it clean, safe, brightly-lit and welcoming? What does it smell like? Are there outdoor grounds which are accessible and maintained to allow residents to enjoy them safely while visiting with their loved ones? What sounds do you hear? 

  • Staffing/Employees

The staff members at a nursing home are so important as they are going to be the ones who are responsible for ensuring your loved one’s safety and well-being.  Their attitude, expertise, and professionalism are vital. You should always ask plenty of questions and spend some time observing the staff.  Does the staff address residents by their name? Observe if they demonstrate a warm and respectful attitude towards the residents.  Inquire about the ratio of staff to residents during each shift and the turnover in employees.  Does the staff undergo continuing education and training programs frequently?

  • Well-being of Residents

How do the residents spend their time? Ask to see the calendar of daily events.  Do they include fitness classes, games, religious services, educational classes and other social events? Are the residents taking advantage of these activities or tucked in their rooms with the TV on and alone? Is there a library available for residents to use? Are residents taken to local community events and cultural activities, or are those activities brought to them?

  • Meals

This is always a big one understandably.  If possible, ask to dine at the facility, at least once.  Determine whether the food is visually appealing and tastes appetizing.  Look around to see whether the residents are enjoying their food or struggling to eat it.  Do residents eat in a communal area or in their room? How often does the menu change? Can accommodations be made for dietary restrictions? What if a resident needs assistance eating? 

It is important to consult an elder care lawyer who can assist you in making these important care choices for your loved one.  An elder care attorney can advise you on the various options available to pay for the care and to connect you with other qualified professionals such as care managers (who can assist in evaluating care needs and recommending an appropriate facility).  Although this is a difficult decision fraught with emotions and challenges, an elder law attorney can assist in navigating the process and reducing some of the anxieties that often accompany such a decision.  

Attorney Julia K. Abbott 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. 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. 

October 2020

© 2020 Samuel, Sayward & Baler LLC

Five Estate Planning Steps to Prioritize Now

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Five Estate Planning Steps to Prioritize Now

By Attorney Maria C. Baler

 

Attorney Maria C. Baler discusses Five Estate planning steps to prioritize during the global pandemic.

Living through a global pandemic is an anxiety-producing experience.  For many people, making sure their estate plan is in order is one way to exercise some control over the situation by providing some certainty around what will happen if they become sick or pass away.  As a bonus, this exercise generally gives people peace of mind and reduces anxiety since they know they have done what they can to make sure things will be taken care of if the unexpected happens.  

Here are five things to do now to reduce that pandemic-related anxiety for your estate plan:

1. Make sure your Health Care Documents are in Order.  One of the things we are all worried about is getting sick, and especially getting sick enough to be hospitalized.  If you are ill and unable to make or communicate your health care decisions, your physician will look to someone else to make those decisions for you.  A Health Care Proxy is the document that appoints a person you select (your health care agent) to make health care decisions for you in this situation.  Without a Health Care Proxy, the Court may need to appoint a guardian for you in order for health care decisions to be made on your behalf.   A HIPAA Authorization will grant your family members access to your medical information and give them the right to confer with your physicians if you are not well enough to give permission.  A Living Will, although not binding in Massachusetts, is a way to express your wishes about end of life care.

 

2. Distribute Health Care Documents and Discuss Health Care Wishes.  After you have created your health care documents, make sure that each of your health care agents, your primary care physician, and any other specialists you see on a regular basis has a copy of your Health Care Proxy, and that the document is scanned into your electronic medical record.  If possible, encourage your health care agents to save a copy of your proxy to their phone to make access easier in the event of an emergency.  If you have signed a Living Will expressing your wishes about end of life care, you should provide a copy of that document to your health care agents as well. Finally, have a conversation with your physician and your health care agents about your wishes regarding health care in general, treatment for any specific medical conditions you may have (including COVID if that arises), and specifically regarding end of life care so that your wishes will be carried out if you are unable to make decisions for yourself.

 

3. Review your Estate Plan and Update if Necessary.   In addition to making sure your health care documents are up to date, take time to review your Power of Attorney (for legal and financial decision-making), your Will and any Trusts you may have created to confirm those documents accurately reflect your current wishes.   If they don’t, update them.  If you have Trusts, review how your Trusts are funded, and whether any newly-acquired assets should be titled in your Trust.  Review beneficiary designations on life insurance and retirement accounts and determine if any changes are needed.  If you don’t have an estate plan, now is a good time to meet with an estate planning attorney to discuss your particular situation and create documents that are appropriate for you and your family.

 

4. Create a List of Your Assets and Organize your Documents.  Whenever you pass away, it will be important for your family members or beneficiaries to be able to quickly and easily identify and locate your legal documents and identify the assets you own.  An easy way to do this is to create a list of those assets (real estate, bank accounts, investment accounts, retirement accounts, annuities, life insurance, etc.) and keep it in a place where it will be easily found.  Keeping your financial records in one central location (such as a filing cabinet, desk or fireproof box) is a good idea.  If you have a trusted person you can inform where to find this information, that is also a good step to take.

 

5. Don’t forget about Digital Assets.  As more of our lives move online, it is important to leave instructions about how any digital assets that you may own should be dealt with at your death – email, photo and document storage accounts, social media, etc.  As important as those instructions are, if your loved ones don’t have access to these accounts those instructions cannot be carried out.  In addition to your legal documents giving authority for access, it is important to leave instructions regarding access, including usernames and passwords or how to gain access to them. Again, identify a trusted person and let them know where these instructions can be found.

 

You may think that planning for illness and death is not the most uplifting of activities, especially in the time of a global pandemic.  However, I have clients tell me every day how good they feel after getting their estate plan in order.  Even starting the process feels like a weight has been lifted since they know they are taking steps to make sure they are protected and their family will have an easier time of it in the event they become ill or pass away.  Take some time to review your existing plan or move forward to create one – it’s not as painful as you think, and both you and your family will benefit in the long run.

 

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 currently serves on 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.

September 2020

© 2020 Samuel, Sayward & Baler LLC

Hitting “Pause” on Creditors’ Claims Against Massachusetts Estates

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by Abigail V. Poole

As the Personal Representative (Executor) responsible for administering the estate  of a deceased family member or friend, one of your most important tasks is to determine the debts of the deceased and whether they can or should be paid as part of the estate settlement process. This is especially true if the estate may be insolvent because the deceased died with significant debt due to failure to pay income taxes or credit card bills, or the deceased was the recipient of Medicaid (MassHealth) long-term nursing home care benefits. 

Massachusetts law governs the order in which debt is to be paid to the so-called “creditors” of the estate, and certain creditors take priority over others. If you improperly pay some creditors out of order as Personal Representative, you may be personally liable to pay those that should have been paid but were not.

Under Massachusetts law, general (unsecured) creditors have one (1) year from the date of death to file a claim against an estate.  An example of a general creditor is a collection agency attempting to obtain payment on outstanding credit card debt.  The collection agency must take specific action within the one-year period to legitimize the creditor’s claim for payment of the debt.  If the creditor does not take the proper steps within that period, the creditor will be foreclosed from seeking payment from the estate. In other words, as Personal Representative you know that after the one-year anniversary date of the deceased’s death, creditors who have not taken the proper steps to legitimize their claims have lost their rights to enforce payment of the debt against the estate.

The COVID-19 pandemic has complicated this simple deadline. Under the Third and Fourth Updated Orders issued by the highest court in the Commonwealth of Massachusetts (the Supreme Judicial Court), the “pause” button was hit from March 17, 2020 through June 30, 2020 (106 days) on a number of such “deadlines”, including the creditor claims period applicable to estates. The button was “unpaused” as of July 1, 2020. What this means is the number of days remaining until the one-year claims period ends as of March 17, 2020 are added to the number of days remaining as of July 1, 2020.  For example, if the deceased died on January 1, 2020, in normal circumstances the creditor claims deadline would be January 1, 2021.  Due to the COVID-19 Order, the deadline is extended 106 days to April 17, 2021, and creditors have until that date to file claims against the estate.  The Supreme Judicial Court may order another extension if there is a new surge of COVID-19 cases in the Commonwealth. 

The extension of the creditor claims deadline impacts the timing of the other steps necessary to settle an estate.  If the Personal Representative decides that an Account itemizing the income and expenditures of the estate should be filed with the Court in order to release the Personal Representative from liability, such filing will be delayed until the extended deadline passes.  There may also be a delay in making final distributions to the beneficiaries of the estate. 

If you are the Personal Representative of an estate in Massachusetts, keep in mind this COVID-19-related impact on the claims of creditors who may be owed money by the deceased, and on the timing of estate settlement activities, and follow the advice of your estate planning attorney regarding the payment of claims.

At Samuel, Sayward & Baler LLC, we counsel families on the legal and tax matters that are necessary after the death of a loved one. You can request a consultation regarding estate administration with Attorney Poole by telephone at 781-461-1020 or visit our website at https://ssbllc.com.

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 estate planning, estate settlement and elder law matters. She is an active member 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. 

September, 2020

© 2020 Samuel, Sayward & Baler LLC

 

Understanding the MOLST Form

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WHAT IS A MOLST FORM?

A MOLST Form is a medical order form (kind of like a prescription).  It stands for “Medical Order for Life-Sustaining Treatment”.   The form conveys instructions between healthcare professionals regarding a patient’s care.   Click here to see the actual form.

DOES EVERYONE NEED A MOLST FORM? WHEN IS IT APPROPRIATE?

In Massachusetts, patients of any age with a serious advanced illness may discuss completing a MOLST form with his or her doctor.  It is a common misconception that a MOLST form should be completed routinely with other health care directives.  This is not the case.  Again – it is only intended for patients who have a serious advanced illness.

IS A MOLST FORM THE SAME THING AS A HEALTHCARE DIRECTIVE/ADVANCE DIRECTIVE?

No, these are two different documents.  Advanced directives (also known as health care proxies) are legal documents that become effective after the patient has lost capacity and is no longer capable of making his/her healthcare decisions.    All adults over the age of 18 should have a healthcare proxy to name an agent to make healthcare decisions in the event of an unexpected accident or illness.

A MOLST form, however, is a medical document that contains medical orders that are effective immediately based on a patient’s current medical condition, regardless of the patient’s current ccapacity to make healthcare decisions.

If you decide to execute a MOLST form with your doctor, you also need to complete a healthcare proxy.

WHAT IS THE PROCESS FOR COMPLETING A MOLST FORM?

Before completing a MOLST form, the signing clinician (physician, nurse practitioner, or physician assistant), the patient and family members should discuss the patient’s medical condition, what should happen next, the patient’s values and goals for care and any possible risk and benefits of treatments offered.  After these discussions occur, the form may be completed and signed by the clinician and the patient.  The executed form remains with the patient and is to be honored by health professionals in any situation.  

For a helpful website regarding the MOLST form, click here.

Too Much Togetherness: Divorce and Estate Planning in the Time of COVID-19 

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Among the tales of unfortunate fall-out from COVID-19 are those I hear from my family law colleagues about the number of couples deciding to divorce.  Not surprisingly, three months of home confinement with your spouse will bring some clarity to how compatible two people really are.   For those who are going through a divorce or divorce mediation, or those advising them, it is important not to lose sight of the importance of an up-to-date estate plan amidst the emotional and legal challenges a divorce brings.  

During divorce proceedings, an automatic restraining order applies that prohibits either spouse from selling or transferring assets or changing the beneficiary on life insurance and retirement accounts except as permitted by Court order or agreement of the other party.  Although asset ownership and beneficiary changes may not be made until after the divorce judgment issues, an important interim step for divorcing parties is to create updated Powers of Attorney for legal and financial decision-making, and Health Care Proxies for health care decision-making, so that a trusted individual, and not an estranged spouse, will make those types of decisions in the event of incapacity during the pendency of the divorce.

The law does provide some assistance in “modifying” an estate plan after divorce, although the result may not be what the divorced person intends.  In Massachusetts by law, a divorce judgment revokes any disposition of property to the divorced person’s former spouse, including trust provisions, beneficiary designations as to life insurance and retirement plans, transfer-on-death accounts, and any other revocable disposition.  If estate plan documents named the former spouse or family members of the former spouse as a fiduciary – such as a Personal Representative (formerly Executor) or Trustee – those designations are treated as if the former spouse predeceased the divorced person.  Although these provisions may seem to do the trick, in reality they can wreak havoc on an estate plan and create unintended consequences.  In addition, in the event a divorced person intends to benefit their former spouse with life insurance or some other asset, steps must be taken to ensure that designation will stick after the divorce occurs.

Once a divorce is final, each party should review their existing estate plan and beneficiary designations with the help of an experienced estate planning attorney, and make any changes that may be necessary.  For example, for a couple with young children, a Trust may be appropriate to manage a divorced parent’s assets for the benefit of those children if that parent were to pass away during a child’s minority.  Naming someone that a parent trusts to manage and apply the Trust assets appropriately for the minor children is of the utmost importance for a single parent.  If a Trust is not created, the children’s guardian/conservator will have responsibility for managing any assets inherited by the children, and that person is likely to be the children’s surviving parent.  For most divorced couples, the idea that a former spouse will have control over the inheritance left to the children is unsettling and inconsistent with their intentions.  An estate plan that addresses divorce-related issues can ensure this does not happen, and that the divorced parent’s wishes will be carried out. 

And let’s not forget that many divorced people go on to find love again.  Estate planning for blended families is just as important.  Re-marriage brings its own set of estate planning challenges, especially if the parties have children from prior marriages or relationships.  In such a case, good estate planning is crucial to ensure that if one member of the new couple dies, his or her children from a prior marriage will be provided for appropriately, while the new spouse or partner is also provided for if they do not have sufficient means of their own.  It is unfortunate when all of a parent’s assets pass to the new spouse, who then leaves them to his or her own children or family members at death, leaving the deceased’s children with nothing.

Whether divorce is a sad event or a welcome new beginning – or maybe both – estate planning is more important than ever during and after a divorce, to avoid unintended results and ensure children and other family members will benefit as you intend.

Five Things To Do Soon After A Loved One Passes Away

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Although the number of COVID-19 cases is surging in other parts of the country, thankfully here in Massachusetts we continue to see a slow and steady decline.  Hopefully, this trend will continue. Nevertheless, there are sadly still individuals who are becoming infected with COVID-19 and dying from complications due to the virus, reluctance to seek treatment for other health issues, or for a myriad of other reasons.  What should I do when a loved one passes away may be a question that you unfortunately have to ask yourself. Whether a loved one’s passing is expected or unexpected, managing his or her affairs can be difficult to think about while dealing with the grief and loss of a loved one. Here are five steps to provide some guidance on what to do soon after a loved one’s death, in no particular order:

1. Arrange Burial and Memorial Services According to the Loved One’s Wishes

If the deceased was forward-thinking enough to pre-arrange and/or pre-pay his or her funeral when also preparing his or her estate plan, then contact the funeral home with which these arrangements were made.  If no plan was put in place before death, contact a reputable funeral home to guide you through the burial and memorial service process.  Keep in mind that currently funeral homes are open for business but have adjusted to function within the Governor’s pandemic guidelines. This generally means that services may include no more than ten family members.  Several of my clients have decided to hold off on a memorial service until such time that it is possible to host a larger gathering in honor of their loved one.

As part of an estate plan, the deceased may have prepared a Directive as to Remains.  A Directive as to Remains is a document that instructs the deceased’s Personal Representative (Executor) to arrange the deceased’s burial or cremation and funeral/memorial services as directed in that document. Your loved one alternatively may have written down similar wishes in a letter of instruction. Carefully review your loved one’s estate planning documents to learn if the deceased left such instructions so that his or her wishes are carried out.

 2. Find and Organize Important Documents

Hopefully your loved one showed you where he or she keeps important documents like his or her Will, income tax returns, financial account statements and bills that are regularly paid. This information will be necessary for the proper services and administration of the deceased’s estate.  Locate a safe but easily accessible place where you can store this information as you will refer to and use it often.  Do not throw away any financial records or legal documents until you know you will not need them for tax filings, asset valuation, or other purposes.

3. Secure Property of the Estate

Your loved one may have several different types of assets in his or her estate at death. In every case, the Personal Representative (or Trustee if there is a Trust) is responsible for ensuring the deceased’s property is secure and protected for the beneficiaries of the estate.  For example, it is important to safely store valuable jewelry and artwork.  Similarly, any real estate should be securely locked (perhaps even change the locks) and regularly visited. In fact, it is an obligation of the Personal Representative to do so, and he or she may be liable if such measures are not taken and damage occurs to the property. The Personal Representative should also maintain or obtain insurance in connection with the deceased’s assets, as necessary, and may need to have some or all of them appraised for estate administration and/or estate tax purposes.

4. Contact an Estate Planning and Administration Attorney

The settlement of an estate can be incredibly complex depending on the assets and beneficiaries involved, and the provisions of the deceased’s estate plan. The Personal Representative should contact an attorney to guide and assist him or her through the process of completing and filing the required documents to be appointed as Personal Representative by the probate court, gathering assets, paying appropriate expenses, and making distributions, to avoid failing to fulfill his or her obligations. This is especially important if the estate assets are valued at over $1 million and a Massachusetts estate tax will be payable, or if it is anticipated that MassHealth (Medicaid) may file a claim against the estate to be reimbursed for any MassHealth benefits (for home care or nursing home care) received by the deceased during his or her lifetime.

Keep in mind that the administration of an estate typically takes at least one year so you may want to take the tortoise’s point of view – slow and steady wins the race.

5. Communicate and Work Together

On top of the issues mentioned above, estate administration can be made more difficult if there are strained relationships between the beneficiaries, which often also includes the person who is serving as Personal Representative. Perhaps there is a history of family disharmony. Perhaps multiple beneficiaries are sentimentally attached to mom’s diamond engagement ring and they must decide who gets to keep it.  The only person who wins when there are disagreements between beneficiaries that cannot be resolved is the attorney who gets paid to resolve them via negotiation or court action.  Instead, consider embracing the three C’s as much as possible when working with each other: Communication, Cooperation and Compromise. 

Estate administration can be a juggling act where the Personal Representative is managing several different responsibilities all at once, including fulfilling the wishes of the deceased and the Personal Representative’s obligations to the beneficiaries. An estate planning attorney knowledgeable in the process of estate administration can guide you through that process in a correct and efficient manner, so that you have peace of mind when all is complete, hopefully with family relationships intact, which is most likely what your loved one would have wanted when setting up his or her estate plan.

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 estate planning, estate settlement and elder law matters. She is an active member 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. 

July, 2020

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Wills • Trusts • Elder Law • Long-Term Care Planning • Estates

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