Articles and Blogs

Trust Funding

September 21, 2021 by Attorney Maria Baler

Do you want to avoid probate, make sure your assets are distributed as you wish at your death, and save estate tax in the process? Creating a trust is the way to accomplish all of this, and funding your trust with your assets is an essential step in the process! In this video, Attorney Maria Baler discusses trust funding – what is it, how do you do it, and why it is so important.

What Is Supported Decision-Making?

September 15, 2021 by Attorney Abigail V. Poole

By Abigail V. Poole, Esq.

“A friend of mine was telling me about a bill in the Massachusetts legislature for supported decision-making – do you know anything about that?” I explained to my client that supported decision-making is a nationwide movement to develop legal guidelines to permit an adult with intellectual or developmental disabilities, such as Autism or Down Syndrome, to make his or her own health and financial decisions with the support of family members, friends and professionals. These “supporters” are a team, ranging from two to ten trusted individuals, who help the disabled person by discussing the advantages and disadvantages of a decision. The supporters’ roles are outlined in an agreement with the disabled adult who retains the authority to make the final decision for him- or herself.

A supported decision-making agreement is an alternative to a Guardianship in certain situations. Oftentimes, a Guardian is appointed by the court to make health care decisions on behalf of a disabled adult. A Guardianship can be needlessly restrictive on a disabled adult’s independence, especially when the disabled adult is capable of making the decision about his or her own care if individualized support and discussion is available.

To date, around ten states have enacted supported decision-making legislation, and Massachusetts has conducted a successful pilot program utilizing supported decision-making. In March 2021, the proposed Massachusetts bills were referred to the Joint Committee on Children, Family and Persons with Disabilities.

At Samuel, Sayward & Baler LLC, an attorney who is up-to-date about the latest trends and legislation can discuss the current and potential options available for you and your family, and guide you through the preparation of an estate plan to assist your family member with special needs.

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 and current Vice 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, 2021

Estate Planning and Life Insurance – 5 Ways they Work Together

August 31, 2021 by Attorney Suzanne Sayward

Although we do not sell life insurance here at Samuel, Sayward & Baler LLC, we do help clients plan for their families’ future and life insurance is often a part of that planning. Here are five things to consider in the context of your estate plan when thinking about purchasing, or dropping, a life insurance policy.

1. Life insurance is an excellent planning tool for young families. Young couples just starting life together often do not have a lot of assets. They are at the beginning of their careers so their earnings are not at their peak. In addition, they may carry significant student loan debt or a large mortgage. The birth of a child is often the event that motivates them to purchase life insurance so that if one of them passes away, the survivor will have sufficient funds to stay in the house and raise the children. Considerations such as the impact the loss of one spouse’s income will have on the ability to pay the bills and educate the children should be analyzed when determining whether and how much life insurance to purchase.
2. Life insurance is taxable in the insured’s estate (often). Many people are confused about the taxability of life insurance. In most cases, life insurance proceeds are not taxable income to the person who receives them. For example, if my aunt names me as the beneficiary of her $100,000 life insurance policy, that $100,000 is not taxable income to me. However, life insurance proceeds are a taxable asset of the insured’s estate if the insured owned the policy or had the right to cancel, surrender, or assign the policy or change the policy’s beneficiary. As such, although I will not pay income tax on the $100,000 of life insurance proceeds my aunt left me, those proceeds will be included in my aunt’s taxable estate and will increase the estate tax liability if my aunt’s estate is large enough to require the payment of federal or state estate tax.
3. Life insurance can be an easy way to solve a hard problem. Life insurance can be a good way to address a situation that is creating stress in planning. For example, spouses in a second marriage who want to leave pre-marriage assets to children from a prior marriage but also want to take care of their spouse, could purchase life insurance payable to the surviving spouse while benefitting children with the pre-marital assets. Business owners who want to make sure their surviving partners have the capital to continue to run the business may purchase life insurance on each other or through the business. Parents who want to keep a beloved vacation home in the family but realize the expense of maintaining the property will be a burden to their children can use life insurance to provide funds to pay the costs of maintaining the home following their deaths. Families with a special needs child who want to ensure that funds are available for the child’s lifetime to provide for housing or other needs may use life insurance to fund a trust for the child.
4. Life insurance can be a Good Way to Pay Estate Taxes. For those who have a taxable estate (i.e., more than $11.7 million federally in 2021 and $1 million in Massachusetts), life insurance can be a good way to provide liquidity to pay that tax which is due 9 months after death. However, if the life insurance policy is owned by the deceased, then the life insurance proceeds are added to the taxable estate thereby increasing the estate tax liability. Purchasing and owning life insurance in an Irrevocable Trust will prevent the life insurance proceeds from being part of the insured’s taxable estate thereby preserving the full value of the insurance for the family. With speculation that Congress may reduce the estate tax exemption amount to $3.5 million and increase the rate of the federal estate tax, the irrevocable life insurance trust may become a more frequently used planning tool.
5. Review your life insurance on a regular basis. Life insurance is not an asset that should be purchased and then never looked at again. As time goes by, needs change and life insurance purchased 10 years ago may no longer be sufficient or may no longer be needed. So-called ‘term’ life insurance means that the premiums for the policy are fixed during the term but the policy will expire or the premiums will increase significantly when the term ends. Term policies can be an excellent way to address a short-term situation such as providing funds for children’s education or paying off the mortgage. Once the children have graduated from college or the mortgage is paid, the purpose for which the insurance was purchased is no longer important. If the intention is that the insurance proceeds be available to support that vacation home you are leaving to your children or fund a trust for a special needs child, then a policy that will expire is probably not the right choice.

In my experience, life insurance is typically more complicated than it seems at first blush. It is advisable to work with an experienced life insurance agent, a financial planner, and an estate planning attorney to ensure that you purchase and retain insurance that meets your goals and is best suited for your needs, and own it in a way (in your name or in an Irrevocable Trust) that works with the rest of your estate plan. If you have questions about how life insurance fits into your estate planning, please don’t hesitate to contact us to schedule a consultation with one of our 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 ssbllc.com or call 781/461-1020.

September, 2021

The Importance of Planning for Incapacity

August 18, 2021 by Attorney Maria Baler

I run into clients often who jokingly tell me “I’m not going to die” when discussing their estate planning. Although many of us would like to think we are immortal, it is a fact that we will all die sooner or later. Harder to imagine for many people is that they may experience a period of incapacity prior to death. This may happen due to hospitalization or illness, or due to dementia in one of its many forms, including Alzheimer’s disease.

It is just as important to plan for incapacity as it is to plan for death. As we often tell our clients, planning for incapacity may be even more important, because you are still alive and will be directly impacted by how your assets are managed for you and who is in control on your behalf. Whatever happens after your death will impact those you leave behind, but for better or worse will not impact you!

Planning for your incapacity is serious business. It involves identifying people you can trust, and creating documents that will allow them to assist you if and when you need or want assistance in the future making financial, legal or health care decisions. Planning for incapacity involves:

Creating a Power of Attorney that names a person who you authorize to handle your legal and financial affairs if you are unable to do so. This should be someone you trust implicitly to handle things appropriate and in your best interest.
Creating a comprehensive list of assets, legal and financial advisors, beneficiaries, digital asset access information, and other information that will be crucial to someone who may have to take over your financial affairs unexpectedly.
Creating a Health Care Proxy that names a Health Care Agent to make health care decisions for you if you are unable to make those decisions yourself.
Making sure your Health Care Agents understand your wishes about the type of care you want to receive, particularly at the end of life, and even more importantly if you become incapacitated and are unable to articulate your care preferences at that time. There are many organizations that assist people to express those wishes – The Conversation Project is one of many.
If you already have these documents, reviewing them periodically to determine if the people named in the documents are still trusted people you can count on to be there if you are not well.
If the people you have named are getting older or are not well, do you have appropriate alternates named to take their place if they cannot (or do not wish to) serve in those roles if the time comes?

In these documents you can also designate a person to serve as your conservator or guardian should a court need to step in and appoint a person to make decisions for you. This can help avoid a situation where you need assistance and the Court must appoint someone to make decisions for you, who may not be someone you would have chosen. I am reminded of the recent move I Care a Lot, a black comedy / thriller distributed by Nexflix in 2020, starring Rosamund Pike who won a Golden Globe for the role. The movie tells the story of a professional legal guardian who has less than good intentions. Although the movie is not based on a true story, it is based on real-life situations and scams like one that occurred in New York in 2013.

Unfortunately, this past year and a half has taught us that life and health are unpredictable. Make sure you have all your bases covered, and have chosen and named people you trust to handle things for you if you are unable so you don’t end up vulnerable to those who may take advantage of your situation.

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 current President of the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.

August, 2021

Five Things to Think About When Considering an Irrevocable Long-Term Care Trust

August 4, 2021 by SSB

Five Things to Think About When Considering an Irrevocable Long-Term Care Trust

It’s no secret that the cost of long-term care is spiraling out of control in this country, and, consequently, it’s no wonder that more and more clients are expressing concerns to us about wanting to “protect” their assets from being depleted by the cost of such care. Clients will frequently mention either that they heard on the radio, TV, or the internet that they can accomplish this using an irrevocable trust or that they have a friend, neighbor, or relative who put their assets into an irrevocable trust for this purpose. While irrevocable trusts can absolutely be used to protect assets from being spent on long-term care, they are not a universal “one size fits all” solution, and they are not without drawbacks. With this in mind, here are five things to think about if you are considering an irrevocable trust to protect assets for long-term care purposes (an “irrevocable long-term care trust”):

You Have to Give Up Control. Despite what numerous radio, TV, and internet ads would have you believe, you cannot protect your assets from being spent on nursing home care while retaining full control over them. Under federal and state law, assets in an irrevocable long-term care trust created by you (or your spouse) are subject to the “any circumstances” test, meaning that if there are any circumstances under which the assets could be distributed to you or used for your benefit, the assets will not be protected and would need to be spent on your long-term care before you would be eligible to receive public long-term care benefits (part of the Medicaid program, known as MassHealth in Massachusetts). As a result, in order for an irrevocable long-term care trust to function as intended, you cannot have any right to access the assets in the trust once they have been transferred into it, nor can the trustee (the person in charge of managing the trust’s assets) have any ability to distribute the assets directly to you or use them directly for your benefit. This means that, among other things, if your house is transferred into an irrevocable long-term care trust you will not be able to access its equity through a home equity line of credit or a reverse mortgage. Additionally, trust funds could not be used to directly pay for services for you, such as an assisted living facility or home health aides. Finally, while you would retain the ability to remove and replace the trustee, you could not serve as the trustee yourself and, therefore, would not be able to directly manage the assets in the trust.
You Have to Have the “Right” Assets to Fund the Trust. When it comes to funding an irrevocable long-term care trust, not all assets are created equal. In particular, you cannot transfer tax-qualified retirement accounts (e.g., IRAs, 401(k)s, etc.) into a trust without immediate income tax consequences. This is because such accounts have to be converted into taxable brokerage accounts (or cash) in order to be transferred out of your individual name, meaning you would be taking a taxable distribution equal to the entire balance of the account. So, if you were to transfer a $300,000 IRA into the trust, you would have $300,000 of additional taxable income reportable on your personal income tax return for the year the transfer is made. Additionally, it is not generally a good idea to transfer a home with an outstanding mortgage into an irrevocable trust. This is because if you continue to pay the mortgage with your own non-trust funds, such payments could be considered additional gifts to the trust (since you no longer own the home in your individual name), which could create problems in the event you need to subsequently apply for MassHealth long-term care benefits.
You Have to Wait Five Years Before Applying for Long-Term Care Benefits. In order to avoid the possibility of people transferring their assets into an irrevocable long-term care trust and then turning around and applying for MassHealth long-term care benefits the next day, state and federal law give MassHealth the authority to review all of your financial transactions for the 60 months (5 years) immediately preceding your application for long-term care benefits. Any and all gifts and other transfers for less than fair market value made during that time, known as the “lookback period,” are considered to be “disqualifying transfers,” which will delay the start of your MassHealth long-term care benefits for a period of time determined by the value of the assets transferred. If significant assets are transferred, this delay can last several months, if not years. Thus, an irrevocable long-term care trust is generally not a good idea unless you are confident that you will not need MassHealth long-term care benefits until after the end of the lookback period and/or you retain sufficient assets in your individual name to pay for your care needs during the lookback period.
You Are Limiting Your Options Going Forward. A fellow practitioner once told me that he counsels clients that irrevocable long-term care trusts effectively guarantee that they’ll wind up in a nursing home if they need long-term care in the future. While this is a bit of an exaggeration, it is definitely true that an irrevocable long-term care trust severely limits your options going forward. This is because, as of now, MassHealth long-term care benefits are geared primarily towards nursing home care. Although there are some community-based long-term care benefits available, as a general rule these benefits do not cover 24/7 home health aides, nor do they generally cover assisted living facilities. Further, even within the realm of nursing home care, MassHealth long-term care benefits will only cover a semi-private room (meaning you would be sharing a room with someone else). By contrast, maintaining assets in your individual name gives you the ability to tap into those assets (through, e.g., a reverse mortgage or home equity line of credit on your home) to allow you to be cared for in the most comfortable, least restrictive setting possible for as long as possible.
It Might Not Work. Eligibility for MassHealth long-term care benefits is governed by a complex web of state and federal statutes, regulations and court cases. These rules change frequently, particularly at the state level, and often apply retroactively, meaning that no exception is made for irrevocable long-term care trusts that were created prior to the new rules taking effect. Thus, what is permissible today may not be permissible tomorrow, and an irrevocable long-term care trust created under today’s rules may be in violation of the rules that exist at the time you apply for MassHealth long-term care benefits. Further, MassHealth has a history of aggressively reviewing and challenging applications for long-term benefits that include irrevocable trusts (the existence of an irrevocable trust must be disclosed to MassHealth even if it was created outside of the lookback period), and anecdotally most such applications appear to be denied on the first pass, necessitating a costly and time-consuming appeal.

A properly structured irrevocable long-term care trust can be an appropriate tool to protect assets from being spent on long-term care, but just like a power drill isn’t always the appropriate tool with which to fasten a screw, an irrevocable long-term care trust is not always the appropriate tool for long-term care asset protection. It is important, therefore, to consult with an experienced elder law attorney to determine the best tools to achieve your goals given your specific circumstances.

August 2021

Child Going Away to College? Don’t Forget Their Estate Plan Documents

July 29, 2021 by SSB

With the month of August upon us, parents around the country are participating in the time-honored tradition of preparing their young adult children to go away to college. While it’s certainly important to ensure that they have the necessary clothing, bed linens, and other such items, it is also important to have certain legal documents in place to permit someone to make decisions and access information in the event of an emergency.

While every parent knows that a child becomes a legal adult upon turning 18, most parents fail to appreciate the full extent of the consequences. In particular, once a child turns 18, not only do parents no longer have the legal authority to make financial or medical decisions on that child’s behalf (even in emergencies), they also no longer have the legal right to access that child’s medical, financial, or educational information. This means that, without prior planning, not only would parents be unable to make medical or financial decisions on behalf of their child in the event of an emergency, they might not even be permitted to know the details of what happened or the nature of their child’s situation.

It is therefore incredibly important for college-aged children to have the following documents in place to allow decisions to be made (and information to be accessed) in the event of an emergency:

1. Durable Power of Attorney: This document designates one or more people to act on the child’s behalf regarding finances and assets (e.g., bank accounts, credit cards, student loans, etc.).

2. Health Care Proxy: This document designates someone to make medical and health care decisions on the child’s behalf if the child is unable to make such decisions.

3. HIPAA Authorization: This document authorizes the child’s health care providers to discuss the child’s protected health care information with the people named in the document. Unlike the Health Care Proxy, the HIPAA Authorization does not confer any decision-making authority on the people named in it.

4. FERPA Authorization: This document authorizes the child’s college or university to disclose the child’s protected financial and academic records to the people named in the document. As with the HIPAA Authorization, this document does not confer decision-making authority on the people named in it.

We encourage all of our clients with college-aged children to discuss these matters with their children and to contact our office if your child is interested in having these documents prepared.

Five Thoughts About Planning for your Vacation Home

July 7, 2021 by Attorney Maria Baler

With summer upon us and pandemic-induced quarantines a distant memory, at least here in the Northeast, we are all looking forward to some fun this summer. If you are lucky enough to have a second home you are probably spending some well-earned vacation time there right now with family members, creating lasting memories. If you are the owner of a vacation home, it’s never too early to think about the future.

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, your heirs may not be able to purchase a vacation home on their own 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?

You may intend to leave your vacation home to all of your children to use and enjoy for their lifetimes. When planning, it is important to consider whether these intentions are 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 plans 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.

2. How Will the Bills Get Paid?

If you intend for your children to contribute to the cost of maintaining the property after your death, consider whether all of your children can afford to do this, or whether it makes sense to leave the property (and the financial burdens of its maintenance) to the child or children 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 – such as who can use the property and when, what improvements will be made to the property, and whether 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

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. It is crucial to take into account how estate taxes will be paid when planning for a vacation home that will not be sold. 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 by gifting the property or an interest in the property during your lifetime, and at your children’s death by incorporating generation-skipping planning. If taxes must be paid, 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.

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. As Congress debates estate tax changes that could reduce the federal estate tax exemption, 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.

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. Failing to plan and simply hoping that your children will “figure it out” is the clearest path to family discord, which is the last thing you need on a relaxing family vacation.

July, 2021

The Particular Importance of Estate Planning for LGBTQ Individuals and Families

June 22, 2021 by SSB

One of the goals of proper estate planning is to reduce the risk of conflict in the administration of your estate and the carrying out of your wishes both after your death and during periods of incapacity while you are alive. Though we all like to think that our families (both our legally recognized families and our chosen families) and loved ones will come together and unite during times of crisis, it is unfortunately not uncommon for such crises to lead to painful, emotionally charged conflicts.

Such cases are even more common when it comes to LGBTQ individuals whose legally recognized relatives disapprove of their lifestyle. Although acceptance of LGBTQ individuals is far greater than it used to be, LGBTQ individuals still risk being disowned, shunned, and/or shamed by their relatives if and when they come out. With that in mind, I wanted to take a moment this Pride Month to talk about the particular importance of estate planning for LGBTQ individuals and families.

The most critical thing to understand is that, in the absence of estate plan documents that say otherwise, the law favors biological and legally recognized familial relationships over other relationships. Without a valid Last Will and Testament, upon your death the assets in your individual name will pass by law to your closest legally recognized relatives (known as your “heirs at law”) through a process known as “intestacy.” In Massachusetts, even if you are married, if you die without a Will, there are circumstances where your individually held assets will be distributed among your surviving spouse and your surviving parent(s).

Similarly, if you become incapacitated during your lifetime without a valid Durable Power of Attorney and Health Care Proxy, it may become necessary to have a guardian and/or conservator appointed by the Probate Court. As in the intestacy process, the guardianship and conservatorship processes favor biological and legally recognized relationships, giving priority to your spouse and parents to be appointed as your guardian and/or conservator over romantic partners and close friends.

While having a comprehensive estate plan in place can close off many opportunities for disapproving legally recognized relatives to take control of an LGBTQ individual’s estate in times of crisis and potentially shut out or cut off the individual’s chosen family (i.e., romantic partners, close friends, etc.), not all estate plans are created equal on this front. In particular, if you have an estate plan that relies on a Last Will and Testament to control the disposition of assets after death, a public probate process will need to be initiated after your death in order to validate the Will. Part of that process involves giving notice to your heirs at law. This once again gives disapproving relatives an opening to object to the proceedings and attempt to assert control over your estate.

By contrast, a comprehensive estate plan designed to avoid the probate process will greatly reduce the ability of disapproving relatives to cause trouble. While the probate process requires that notice be given to those who would inherit in the absence of a Will even if they are not named as beneficiaries in the Will, under a Revocable Living Trust, only the beneficiaries named in the trust document are entitled to notice. Thus, if you want to ensure that your wishes are followed and that the people you choose to carry out those wishes are able to do so without interference, you should contact an experienced estate planning attorney and create a plan to achieve your goals today.

June, 2021

What Are Five Duties of a Probate Estate’s Personal Representative?

June 8, 2021 by Attorney Abigail V. Poole

By Abigail V. Poole. Esq.

Sometimes I like to think of administering a probate estate as similar to investigating and solving a mystery. The Personal Representative (formerly known as Executor) of the estate is the Detective. The Personal Representative takes steps to administer the estate by accessing and consolidating estate assets much like a Detective discovers clues and pieces them together one at a time to solve a mystery. Simultaneously, the Personal Representative keeps in mind certain duties while performing these tasks due to his or her fiduciary position much like a Detective who follows the laws while investigating the mystery. Here are five duties the Personal Representative must obey while “solving the mystery” of probate administration.

Follow Directions

The Personal Representative’s most important overall duty is to follow the directions left in the deceased’s Last Will and Testament and the relevant Massachusetts laws. The Will works hand-in-hand with the laws; it must be filed with the probate court, which approves the appointment of the Personal Representative. If the deceased did not leave a Will expressing the deceased’s intentions, then the intestate laws of Massachusetts govern the estate administration.

The Personal Representative is also duty-bound to administer the probate estate expeditiously and efficiently in a way that is consistent with the best interests of the estate. For example, if the deceased possessed an expensive diamond necklace at the time of her death and she stated in her Will that the necklace should be distributed to her daughter, then it is the Personal Representative’s responsibility to do so. However, if the diamond necklace is the only valuable asset and the estate has significant expenses and debt, then the Personal Representative may need to sell the diamond necklace to pay the estate expenses and debt instead of distributing the necklace.

Be Loyal and Prudent

The Personal Representative has a duty of loyalty. The Personal Representative’s actions must be impartial toward all the parties involved (i.e., he or she cannot favor one party above another unless directed by the law or Will). The Personal Representative is also obligated to administer the estate with care and prudence by protecting the interests of the estate and administering the estate for the benefit of all the beneficiaries (the ultimate recipients of the estate distributions). Oftentimes, at the beginning of the probate process the Personal Representative may not have accurate information about all the assets owned by the deceased at the time of death. This means there may be valuable assets discovered after the Personal Representative’s appointment. In the case of the diamond necklace, it would be prudent of the Personal Representative to refrain from distributing or selling the diamond necklace until all the assets are discovered and weighed against the anticipated estate expenses and debt.

Find the Assets

The Personal Representative must investigate, determine, collect and inventory all the estate assets after appointment. Typically, an estate bank account is opened to consolidate and retain the balances from the deceased’s individual bank accounts. The Personal Representative is responsible for determining the value of the assets as of the deceased’s date of death. With respect to the diamond necklace, the Personal Representative should have it appraised to determine its value in the event it needs to be sold to pay the estate expenses and to include on the estate inventory. The inventory is a list of all the assets of the estate and their values that will be provided to the probate court or beneficiaries.

The Personal Representative is obligated to collect the income, interest and refunds due to the deceased or the estate, and dividends from stock.

Protect the Assets and Pay the Expenses

The Personal Representative has a duty to secure, safeguard and manage the estate assets. The diamond necklace should be securely stored until a decision is made to distribute or sell it, and insurance maintained for it, as necessary. The Personal Representative is responsible for collecting payments on any outstanding loans due to the deceased’s estate.

The Personal Representative must also pay estate expenses, such as funeral costs, fees to file assorted tax returns, and the fees of professionals to accomplish these goals (e.g., accountant, attorney, jewelry appraiser). If there is outstanding debt, such as a mortgage, credit card or Medicaid claim, the Personal Representative must prioritize payment of the debt according to the laws.

A crucial responsibility of the Personal Representative is to track all the income and expenditures of the estate. These records will assist the Personal Representative with making decisions regarding payment of expenses and debt during the administration of the estate. It will also demonstrate to the beneficiaries and the probate court that the Personal Representative administered the estate properly via an account (report).

Distribute the Assets

The final obligation of the Personal Representative is to distribute the remaining probate assets to the beneficiaries as directed in the Will or by law. Luckily, the Personal Representative discovered other assets to cover the estate expenses so the diamond necklace was distributed to a grateful daughter.

Every good Detective has a partner to help solve the mystery. Samuel, Sayward & Baler LLC can partner with you to find, protect and distribute the probate assets in accordance with the deceased’s instructions or the laws. Our attorneys are dedicated to guiding you through the probate administration process to ensure you adhere to your duties as the Personal Representative to successfully complete settling the estate.

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 and Vice 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.

June, 2021

Make Updating your Estate Plan a Priority

May 19, 2021 by Attorney Maria Baler

There’s nothing like a pandemic to make people worried about dying – that’s something we learned all too well during the past year. Here at Samuel, Sayward & Baler, we were grateful that we all remained healthy and able to help our clients – both old and new – create and update estate plans that gave them peace of mind.

Now that the end of the pandemic is in sight, consider this a friendly reminder that reviewing and updating your estate plan is not something that should only happen when you are in pandemic-induced lockdown. It’s something you should do on a regular basis – review things once a year, and meet with your estate planning attorney to review things (whether you think you need to or not) every five years or so, or sooner if you know changes are needed.

Updating your plan is important for any number of reasons. Here are some things you should ask yourself when reviewing your existing documents:

Are the people named in your Power of Attorney and Health Care Proxy to make financial or health care decisions for you still trusted people you can count on to be there if you are not well?
Is your Executor/Personal Representative named in your Will and the Trustee of your Trust still a trusted individual you can count on to settle your estate and administer your Trust fairly and efficiently at your death, working with your attorney, accountant and financial advisor?
If the people you have named are getting older or are not well, do you have appropriate alternates named to take their place if they cannot (or do not wish to) serve in those roles when the time comes?
Do your documents still reflect your current wishes about the distribution of your assets at death? Does your Will or Trust refer to assets, such as real estate or a business, that you no longer own?
Have you recently been divorced? Melinda Gates is updating her estate plan in light of her divorce, and you should too!
On a happier note, have you recently been married, had a baby, won the lottery or received an inheritance? Those type of events should also prompt a review and update of your estate plan.

In addition to the things you know should be changed, there may be other provisions of the documents that need to be updated as well. For example, provisions of your Will and Trust regarding how estate taxes will be paid may not operate as intended if certain assets are no longer owed, or if beneficiaries have been changed. The federal estate and gift tax laws, laws governing inherited retirement accounts, and Massachusetts probate or trust laws have all changed within the last ten years, making many provisions of older documents out-of-date.

Unfortunately, this past year has taught us that life and health are unpredictable. Although having an estate plan is an important first step, keeping that plan up-to-date is just as important, as a plan that’s out-of-date can often create more issues than no plan at all. Make it a priority to review your plan today, and sit down with your estate planning attorney to discuss any necessary updates. They will be happy to see you alive and well and keeping your estate plan up-to-date, since it will make their job easier when you are no longer around.