Articles and Blogs

Leaving A Legacy of Love (& Money)

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A client recently asked me, “Is there anything that can be done now to protect my daughter and grandchildren’s inheritances?” Happily, I was able to explain that there are two tools available to safeguard the client’s legacy for her loved ones. These tools are prenuptial agreements and lifetime trust shares, which allow people to protect their wealth and ensure that their hard-earned assets are preserved for future generations.

If your adult child is not yet married, the best way to protect an inheritance is to execute a prenuptial agreement. A prenuptial agreement is a legally binding contract that is completed prior to marriage. It outlines the assets and rights of each person in the event of divorce or death which will supersede state law so long as the prenuptial agreement is determined to be valid. The prenuptial agreement can “carve out” assets, such as potential inheritances and gifts from parents, which will remain with your child in the event of a divorce instead of being divided between your child and the divorcing spouse. Your child and fiancé must each be represented by separate attorneys to provide advice and negotiate the prenuptial agreement. The prenuptial agreement should be started at least six to nine months prior to the date of the marriage ceremony.

In addition to your child executing a prenuptial agreement, you can take action by creating an estate plan that includes a lifetime trust share for your child. You can prepare a Trust now that upon your passing will hold and manage assets for your child for that child’s lifetime, or even for the lifetime of a child’s descendants (your grandchildren). Although your child (and grandchildren) can benefit from the funds held in the trust share during their lifetime according to the terms that you put in place, the assets are not as vulnerable to division between your child and a divorcing spouse because your child does not have total ownership and control of the assets.

To best preserve family wealth for multiple generations, your child should execute a prenuptial agreement and you should create an estate plan containing a lifetime trust share for your child. At Samuel, Sayward & Baler LLC, we strive to provide you with the peace of mind that you are taking all the steps necessary to afford your family financial security and stability, and protect your legacy for generations to come.

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 trust and estate planning, estate settlement and elder law matters. She is an active member and current President of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA). This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781/461-1020.

September, 2023

© 2023 Samuel, Sayward & Baler LLC

Growing Together, Providing Forever: 5 Things Young Families Should Know About Estate Planning

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Starting a new school year comes with a seemingly endless “to-do” list:  buy school supplies, meet the teachers, make the school lunches, create a schedule for extracurricular activities, get to those nonstop piles of laundry. 

One thing that is always on your mind that may not be written on a list is “planning for the future well-being of your child.” Although a young parent’s “to-do” list may seem daunting, it’s crucial to include estate planning on that list. Estate planning plays a pivotal role in ensuring that your children are provided for in the event of unexpected circumstances. 

In Massachusetts, there are specific considerations young parents and families should keep in mind when creating their estate plans. Here are 5 essential things you should know as a young parent (or even as a young grandparent) about estate planning.

1. What is a Guardian?

A guardian is someone who will take legal responsibility for your child’s physical well-being and care in the event that you and the other parent pass away or become unable to care for your child. Your guardian has the authority to make all decisions regarding the care of your minor or incapacitated children, including healthcare decisions, residence, education, and religious upbringing.

You typically name a guardian in your Last Will and Testament to have custody of your minor or incapacitated children. Upon your death and the death of the other parent, the guardian you named will need to go through the court process to confirm their guardianship. The court will evaluate whether the proposed guardian is suitable and whether it is in the child’s best interest to be in the guardian’s care.

2. What is a Conservator?

A conservator is the person who will have authority over your child’s financial assets. This might be necessary if the child received an inheritance, settlement, or other funds that need proper management until the child reaches a certain age or can manage the assets themselves. This includes Social Security benefits your minor child would receive based on your earnings.  If you establish a trust for your children (which I will discuss later in this article), the conservator does not manage the assets in the trust; these assets will be controlled by the person you name as Trustee.

Like naming a guardian, you generally name a conservator in your Will. The conservator can be the same person serving as guardian, but it isn’t required. The conservator will also need to go through the court process to be appointed, which can take a long time and requires a lot of court oversight.

3. Parental Appointment of Temporary Agent

I’ve mentioned that a guardian or conservator named in your Will must go through a court process to be appointed, and that this court process can take a long period of time. What happens during this time that your guardian or conservator is waiting to be appointed by a court? Who takes care of your child and makes decisions for them?

Massachusetts law allows parents of a minor or incapacitated child to designate a temporary agent to take care of the child for up to 60 days. This temporary agent has the power that the parent had regarding the care, custody, or property of the minor or incapacitated child until a permanent guardian or conservator is appointed by the court.

The temporary agent is appointed through a document called a Parental Appointment of Temporary Agent. Keep in mind that you and the other parent must appoint a temporary agent together unless the other parent consents to the appointment in writing or the other parent’s parental rights have been terminated.

4. Create a Will or Establish a Trust

Drafting a comprehensive Will is the cornerstone of any estate plan, especially for young parents and families. As I mentioned earlier, you can designate a guardian and conservator for your minor or incapacitated children in your Will. Your Will also specifies how your assets will be distributed to your children; however, it is important to note that your Personal Representative cannot distribute funds over $5,000 directly to a minor child.

In Massachusetts and many other states, minors under the age of 18 cannot assume control of property given directly to them through an inheritance. If you leave money or assets to your minor child through your Will and you do not specify how those assets are handled, then a conservator will need to be appointed by a court to manage the funds.

This can be avoided by establishing a trust for your minor or incapacitated child. A trust can manage and protect your child’s inheritance and be tailored to your preferences, specifying when and how your child will receive assets. You can also name a Trustee to manage the trust assets on behalf of your child. The Trustee may be a family member or friend, professional fiduciary (attorney or accountant), or corporate fiduciary (such as a bank).

5. Properly Designate Beneficiaries

You should regularly review and update beneficiary designations on your life insurance policies, retirement accounts, and other assets. Well-intending parents may name their minor or incapacitated children as beneficiaries of their life insurance policies or retirement accounts so that the child receives the assets directly. However, remember that minors under the age of 18 cannot assume control of money. This means that naming your minor child as a beneficiary can result in unnecessary complications and a conservator needing to be appointed by the court. Naming an incapacitated child comes with its own set of complications, which can include the child losing essential government benefits.

It is important to consult with an experienced estate planning attorney about properly designating beneficiaries on your life insurance policies, retirement accounts, and other assets to ensure that the funds are used for your minor child’s care while reducing any unnecessary hurdles or court involvement.

These are tough decisions that require thoughtful consideration and planning. As your family grows, the last thing you want to think about is what happens to your child if you are no longer around. Unfortunately, life is unpredictable, and taking proactive steps now will provide peace of mind knowing that you have taken care of your child’s well-being, no matter what the future holds. Estate planning is crucial in securing your child’s future and addressing the unique needs of your family. We are happy to help you ensure that the legal aspects are properly handled so that you can go back to making great memories with your family, and maybe even finishing those piles of laundry.

Attorney Brittany Hinojosa Citron 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. 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, 2023

© 2023 Samuel, Sayward & Baler LLC

Providing for your Pets

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As of 2023, almost 66% of U.S. households have at least one pet- and many families have more than one! Many people consider their pet to be a member of the family, and most pet owners want to make sure that if they become incapacitated or pass away, their pet will be provided for. There are a couple ways that you can use estate planning to help make sure your pet is taken care of if something happens to you.

Durable Power of Attorney 

When planning for your pet, you should first think about what should happen if you are alive but 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.

Memorandum and Gifts for Pet Caretaker

Your estate plan should also include a plan for the care of your pet when you pass away. 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 include those instructions in your Will, or on a separate Memorandum referenced in your Will. 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 whom you would like to care for your pet.  

Your 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 a large sum 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, whom 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, as well as the distributions for your pet’s benefit, such as transportation expenses, boarding, medical care, and more.

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. Please visit our website or call our office at (781)461-1020 to learn more or schedule an appointment.  Please visit The Humane Society website for more resources and tips for planning for your pets. 

Attorney Megan L. Bartholomew is an associate attorney 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.  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.

August, 2023

© 2023 Samuel, Sayward & Baler LLC

 

Smart Counsel Series Exploring Community Resources

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To our Clients and Friends:

Please join us for the next presentation in our Smart Counsel Series on Thursday, September 14, 2023, from 6:00p.m. to 7:30 p.m. virtually via Zoom, hosted by Attorney Maria Baler who will moderate a panel on community resources.

Our local cities and towns and regional organizations offer a wealth of programs, resources, and assistance to residents. These include educational, wellness and social programs, home care services, caregiver support, Medicare counseling, assistance with money management, and providing veterans with assistance to gain access to health care and financial benefits that may be available to them. Many residents are not aware of the availability of these resources until they are in need. Join us to explore these resources in detail and learn more about what is available and how they can be accessed.

We are delighted to be joined for this discussion by three individuals who assist local residents every day:
Lina Arena-DeRosa, the Director of the Westwood Council on Aging,
Sheryl Leary, the Director of Planning and Community Development for HESSCO (the Aging Services Access Point (ASAP) and Area Agency on Aging (AAA) for Southern Norfolk County, and
TJ Tedeschi, U.S. Marine Corps (Ret.), the Veteran Service Officer (VSO) for the West Suburban Veterans District which encompasses the Towns of Needham, Wayland, Wellesley, Weston and Westwood.

Please join us to learn more about the valuable resources and assistance available to you at the local level.

Contact Kenzie Sayward at 781/461-1020 or kenzie@ssbllc.com to reserve a spot for you and a friend.

Suzanne R. Sayward
Maria C. Baler
Abigail V. Poole
Brittany Hinojosa Citron
Megan L. Bartholomew

 

From Heirlooms to Hurdles: What is Ademption by Extinction and How Does it Affect My Stuff?

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When you are contemplating your estate and how you would like your property distributed to your loved ones after your death, the first thoughts that may come to your mind are “I want my jewelry to go to my daughter and stay in the family,” or “my classic car should go to my brother.” 

Ensuring the smooth transfer of your cherished possessions is a significant consideration when creating your estate plan, especially if you want to pass on special family heirlooms. What if you give some of your jewelry to your niece while you are alive, but your daughter expects to receive it after your death? Your actions while alive can significantly impact the distribution of your tangible personal property at your death if you do not give proper direction in your Will.

Understanding Ademption by Extinction

In Massachusetts and in many other states, the legal doctrine of “ademption by extinction” arises when a specific distribution of an asset in a Will cannot be fulfilled because the property no longer exists in the deceased’s estate at the time of death. In other words, if you state in your Will that a particular item goes to a specific person, and that item is no longer owned by your estate at the time you pass away, that person does not receive the item.

For example, if your Will states that your diamond ring will be distributed to your daughter when you pass away, and you sell the ring before your death and do not purchase another one, then your diamond ring is not held in your estate at death and, therefore, it cannot be distributed to your daughter. Under Massachusetts law, this further means she will not receive compensation or replacement for the lost property (the diamond ring), unless the Will specifically provides for an alternative arrangement. In other words, your daughter will be out of luck with receiving a diamond ring or its equivalent from your estate after your death, although there are a few limited exceptions to this rule.

Solutions to Ademption by Extinction

Given the potential complications of ademption by extinction, you should think carefully about how you distribute your tangible personal property in your estate plan. Here are some things to consider:

1. Regularly review and update your Will.

It is important to periodically review the specific distributions you made in your Will to reflect changes in your assets. When you sell your car or notice your aunt’s pearl necklace gathering dust in the jewelry box, you should review your estate plan to make sure it still aligns with your wishes to distribute that tangible personal property after your death. If you acquire valuable items, such as artwork or antiques, make sure to update your Will to specify who should receive them.

2. Provide detailed descriptions.

When distributing specific items, you should provide detailed descriptions that uniquely identify each item. For example, instead of describing an item as “my car,” you may describe it as “my red 2023 Lamborghini.” This can help prevent confusion and disputes among beneficiaries in case you have multiple Lamborghinis.

3. Create a Tangible Personal Property Memorandum.

In Massachusetts, you can create a separate document called a Tangible Personal Property Memorandum that accompanies your Will. This document allows you to specify in detail the distribution of your tangible personal property and can provide guidance to your Personal Representative when it is time to distribute items to specific beneficiaries. This memorandum is typically referenced in your Will and can include provisions that allow the memorandum to be legally binding on your Personal Representative. It is a good idea to work with an experienced estate planning attorney to make sure your distribution wishes are properly expressed in the memorandum.

You can also easily change the memorandum from time to time as you acquire and sell personal property without the need to visit your estate planning attorney every time. Keep in mind that your tangible personal property consists of items such as furniture, clothing, cars, collectibles, artwork and jewelry, and the memorandum does not distribute other assets, such as bonds, cash, treasury certificates, bank accounts, real estate, or retirement accounts.

4. Discuss your intentions.

Communication is key. Have a conversation with your loved ones and Personal Representative to ensure that they are aware of your wishes regarding the distribution of your tangible personal property.

5. Work with an experienced Estate Planning Attorney.

Estate planning laws can be complex. A qualified estate planning attorney can provide valuable guidance to help you navigate the nuances of ademption by extinction and ensure that your distribution wishes are carried out effectively.

It is important to us at Samuel, Sayward & Baler to assist you with preserving your legacy and providing you with peace of mind that your cherished possessions are passed on to your loved ones in accordance with your wishes. We can help you create an estate plan that minimizes the risk of ademption by extinction and other issues that may arise after your death by offering guidance tailored to your specific tangible personal property and how to best distribute it through your Will or otherwise.

Attorney Brittany Hinojosa Citron 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. 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. 

August, 2023

© 2023 Samuel, Sayward & Baler LLC

Debunking Five Estate Planning Myths and Misconceptions

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Estate planning is a crucial aspect of managing your assets and ensuring your loved ones are protected in the event of your passing. Unfortunately, there are several prevalent myths surrounding estate planning that can lead individuals down the wrong path. Here are five myths and common misconceptions about estate planning.

Myth 1: Wills and Trusts Serve the Same Purpose

It is a common misconception that Wills and Trusts are interchangeable estate planning tools. In reality, they serve different purposes but complement each other. A Last Will and Testament is a legal document that outlines your final wishes by designating recipients for your probate assets and appointing a Personal Representative to administer your estate by paying estate expenses and distributing your probate assets according to the wishes outlined in your Will. However, a Will only controls your probate assets, those which you own in your individual name without a joint owner or beneficiary. Those assets must go through probate, a time-consuming and costly legal process, before assets are distributed.

On the other hand, Trusts can do everything a Will can do and bypass probate, allowing for a quicker and more private distribution of assets. They are also useful for managing assets during incapacity, preventing court interference, protecting assets and providing ongoing asset management and support for beneficiaries. Trusts come in various forms, such as revocable living trusts and irrevocable trusts, each designed to meet your specific needs.

Myth 2: One Size Fits All – Everyone Has the Same Estate Plan

Your estate plan may be very different from your next-door neighbor’s estate plan. This is because your estate plan should be prepared based on your specific assets, goals and needs, and the sometimes unique situations of your loved ones who will receive your estate assets, such as special needs, substance abuse or a potential divorce on the horizon. While there are basic estate plan documents everyone should have in place, including a Will, Power of Attorney and Health Care Proxy, your estate plan may be much more complex if you, for example, own a business and/or wish to reduce the estate taxes due to the Commonwealth after your death. Luckily, there a variety of estate plan documents available to meet the unique estate planning needs of everyone.

Myth 3: Only Have a House and Retirement Accounts? No Need for Estate Planning

Some individuals believe that estate planning is only necessary if they own substantial assets or have a complex financial portfolio. However, estate planning is essential for everyone, regardless of their net worth. Even if you only own a house and have retirement accounts, proper planning can ensure that these assets are transferred smoothly to your intended beneficiaries and that your wishes are honored, perhaps with an appropriate Trust. Estate planning should be comprehensive – I regularly discuss with clients the importance of confirming they have primary and contingent beneficiaries designated on retirement accounts and life insurance policies in accordance with their overall distribution wishes, along with the dangers of not having beneficiaries designated (hint: probate is necessary).

Myth 4: Verbal Instructions Are Enough

It is a dangerous misconception to believe that verbal instructions or promises made to family members or friends are sufficient for estate planning purposes. Verbal instructions hold no legal weight, and they may lead to confusion, disagreements, and legal challenges after your passing. Without proper written documentation, your wishes may not be honored, and the distribution of your assets may not align with what you intended.

To ensure that your estate plan is legally valid and enforceable, it is crucial to work with an experienced estate planning attorney to formalize your wishes in legally recognized documents like Wills and Trusts. This approach provides clarity and protection for your beneficiaries.

Myth 5: Preparing Estate Plan Documents Online Is A Safe and Effective Option

While online tools and templates for estate planning documents may seem like a convenient and cost-effective option, they can be risky and ineffective. A colleague of mine considers them job security because of the numerous times his legal services have been engaged to correct poorly drafted documents that fail to include state-specific nuances or necessary provisions that resulted in unintended outcomes.

An experienced estate planning attorney can provide invaluable guidance, ensuring that your documents are correctly drafted, conform with state laws, and reflect your true intentions. They can also help you adapt your estate plan over time, considering changes in your life, the lives of your loved ones, your finances, or the laws.

Do not fall prey to these myths and misconceptions! Your situation is likely unique and deserves to be approached with care and attention to detail. At Samuel, Sayward & Baler LLC, we believe estate planning is a critically important process and we take the time to create a personal, comprehensive plan that protects your loved ones and preserves your legacy.

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 of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA). This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit www.ssbllc.com or call 781/461-1020.

August 2023 © 2023 Samuel, Sayward & Baler LLC

 

Why Are Wills Worthwhile?

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When we discuss estate planning and what happens after you pass away, one of the most common inquiries we receive is “Why is it beneficial to have a Will in place before you die?” While it may be hard to consider what should happen to your assets after you pass away, having a valid Will prior to your death is essential for making sure your wishes and distribution instructions are clearly expressed and easy to follow.

As a reminder, a Will is a written document with instructions for distributing your probate assets after your death. Probate assets consist of tangible personal property, digital assets and devices, and real estate and other financial assets (such as bank and investment accounts) owned in your individual name for which there is no named beneficiary.

Probate is the process by which the Court appoints the Personal Representative (formerly called the Executor) you have named in a Will and grants that person the legal authority to take control of the probate assets, pay debts, expenses and taxes, and distribute the remaining assets according to the instructions in the Will. Creating a Will means that you control who will serve as your Personal Representative. Without a Will, any person ‘interested in your estate’ may ask the court to be appointed as the Personal Representative.

If you pass away without a Will (also known as dying “intestate”), Massachusetts state law determines who will receive your assets. In some cases, the way the law would distribute your assets is not the way you would want them to be distributed. Having a Will ensures your assets will be distributed to the people or charities you wish to benefit.

Establishing a Will as part of your estate plan is essential for controlling the distribution of your assets according to your wishes. Your Will allows you to name the Personal Representative in charge of administering your estate and provide clear instructions about how your assets should ultimately be distributed. To read more about why you should make a Will, as well as to find other articles on estate and long-term care planning, please visit other areas of our website or contact our office to schedule an appointment with one of our attorneys to create your estate plan!

Five Thoughts About Planning for your Vacation Home

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It’s officially summer, and our thoughts turn to summer fun, perhaps at a vacation home of a friend or family member or, if you are lucky enough, yours! If you are the owner of a vacation home, it’s never too early to think about planning for this unique asset. Is this a property you wish to pass on to your children and grandchildren so the good times can continue long after you’re gone? In many cases, the property holds a special place in your family’s hearts and memories, so it is especially important to make sure the property will be there for them to enjoy. Here are five things to consider when planning for your vacation property:

1.  Do Your Children Share Your Hopes and Dreams?
It’s important to determine if you and your family share the same vision for the future of your vacation home. You may intend to leave your vacation home to all of your children to use and enjoy for their lifetimes, but it is important to consider whether your plan is realistic. Take a hard look at how the property is used and by whom. Do all of your children enjoy the property and will they continue to do so in the future, taking into account their busy lives and where they live? Or is the home primarily used by one or two children who live close enough to visit often? When planning for the future of your vacation home, talk to your children about your thoughts and encourage them to be honest with you. Knowing who wants to keep the property and who has no interest in owning a second home is vital information before you begin your planning. If the home will be left to some but not all of your children, you should consider whether it is important to equalize the inheritance each will receive, and whether that is possible considering the other assets you own.

2.  How Will the Bills Get Paid?
Acquiring a second home is only half the battle. Maintaining a second property requires time and resources. If you are leaving vacation property to family members, consider whether they will be able to maintain it taking into account the carrying costs of the particular property, its age, and anticipated future expenses. If you intend for the owners to contribute to the cost of maintaining the property after your death, consider whether all of them can afford to do this, or whether it makes sense to leave the property (and the financial burdens of its maintenance) to those who can afford the expenses that go along with owning such a property. If you are financially able to do so, you may want to leave extra money to support the property which can be used to pay ongoing expenses and make repairs as needed, and take the burden of those expenses off of your family members. If this is the route you choose to go, don’t underestimate the funds that may be needed, and err on the generous side if you are unsure.

3.  How Will Decisions be Made?
No matter how smart your children are or how well they get along, it is always helpful to have a plan for how decisions will be made about who can use the property and when, what improvements will be made to the property, and when and if the property should be sold. It is helpful, whether in a Trust or other written agreement, to set out rules that clearly govern how these matters are decided, and how disputes are resolved. If a child cannot contribute to his share of the expenses, or wants to sell his interest in the property, a structured plan will allow for such transitions, including the opportunity for siblings to buy out one another. If disagreements arise and there is no clear path to resolution, this will ultimately lead to the sale of the property, which is not a good result unless it is one that is agreed on by all involved.

4.  Don’t Forget the Tax Planning.
Vacation homes are often a beloved asset, but they are an asset nonetheless, subject to estate tax like the other assets in your estate. If you have a taxable estate (which means the total value of all of your assets exceeds $1 million if you are a Massachusetts resident), it is crucial to consider how estate taxes will be paid when planning for a vacation home that will not be sold following your death. In some sad situations, the next generation would love to keep the vacation property, but the estate taxes payable at the parents’ deaths are so steep that they cannot afford to do so. Consider undertaking planning to reduce the tax bite at your death. This type of planning may include gifting the property or an interest in the property during your lifetime. Consider whether owning vacation property in an LLC may be appropriate if the owner lives out of state and the vacation home is located in Massachusetts. Consider using life insurance to provide a resource from which estate taxes can be paid, reducing the possibility that the property will need to be sold to satisfy a tax obligation. And consider incorporating generation-skipping tax planning into your estate plan to reduce or eliminate estate tax that would otherwise be payable in your children’s estates

5.  Transfer during lifetime or at death?
Many vacation homeowners intend to continue to own their property during their lifetimes and leave the property to their heirs at their deaths. By doing so, they remain the sole decision-makers and keep their options open: they could sell the property, rent it out, change their minds about who will inherit it, etc. However, transferring ownership to the next generation during the parents’ lifetimes can make sense for tax planning or long-term care planning reasons. Lifetime gifts of vacation homes are something that should be considered, balancing the capital gain tax and control implications of such a gift against the estate tax cost of retaining ownership until death. However, keep in mind that if you intend to use your vacation home after giving it away, rent will need to be paid to the new owners to avoid inclusion in your estate for estate tax purposes.

Thoughtful and timely planning for a vacation property can ensure the property will pass to future generations in a way that will minimize issues and maximize the chances the property will be enjoyed by your family for generations to come. If you have a vision of your descendants enjoying your beloved cottage and building memories there, take the necessary steps now to make your wishes a reality.

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 former 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.

July 2023
© 2023 Samuel, Sayward & Baler LLC

What’s Love Got to do with it? – Estate planning for Second Marriages

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As June is sometimes referred to as ‘wedding season’, what better time to talk about critical planning for those who dip their toes into the legal status of ‘married’ for the second (or third, or fourth) time.   

Marriage is not just about declaring your love in the presence of your family and friends.  Marriage is a legal contract which creates certain rights and obligations under the law for those who enter into that contract.  While most people understand that divorce results in a couple’s assets being divided between them as a court determines if they cannot agree to terms themselves, not everyone is aware that marriage creates rights in a surviving spouse as well, and unlike divorce, it doesn’t matter whether it was a 2-week long marriage or a 2-decade long marriage. 

Death without a Will

When someone dies without a Will in place they are said to have died ‘intestate’ and their probate estate will be distributed under the intestate laws of the state in which they were domiciled at the time of death.  If a married person dies intestate, the determination of the share of the probate estate that will pass to the surviving spouse is based on the decedent’s other family members who survive.  For example, if husband dies leaving wife and children surviving and all of the couple’s children are children of their marriage, then husband’s entire estate will pass to the surviving spouse.  However, if either husband or wife has a child from a prior marriage/relationship, then the amount passing to the surviving spouse is the first $100,000 plus 50% of the remaining probate estate. 

Death with a Will 

A Will is the estate planning document that controls the distribution of a person’s probate estate.  If you do not want the Commonwealth of Massachusetts to dictate the distribution of your estate, then make a Will that sets out your wishes.  Under the Massachusetts Uniform Probate Code (enacted in 2012) even a Will made prior to a new marriage remains valid where that Will leaves assets to the decedent’s children. 

But Beware the Spousal Elective Share

However, even if a deceased spouse leaves a Will, there is a Massachusetts statute that grants a surviving spouse the right to ‘take against the Will’ of the deceased spouse and claim the so-called spousal share.  Similar to the intestate share, the amount of the spousal share depends on who are the other surviving family members of the decedent.  For example, if the decedent left descendants, then the surviving spouse would be entitled to $25,000 and a ‘life estate’ in one-third of the remaining estate.  While this law is intended to protect a surviving spouse from being disinherited, the effect of this statute can be to wreak havoc on an estate plan in a second marriages and can feel especially unfair in short-term marriages.

What’s the Solution?

As with so many things, the solution lies in advance planning.   A prenuptial agreement which is properly entered into before the marriage, is the best way to make sure that both parties’ intentions are carried out. This allows the parties, and not the Commonwealth of Massachusetts, to determine how their assets will be distributed in the event of divorce or death.  

If we can be of help to you with these or other estate planning or estate and trust administration matters, please contact our office to schedule an appointment to meet with one of our attorneys. 

 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.

June, 2023

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