Articles and Blogs

Everybody Speaks a Secret Language

February 15, 2018 by Attorney Suzanne Sayward

A couple of weeks ago I took my car in for a service appointment because the car was all stutter-y and the ‘Service Engine Soon’ light had come on. The service folks told me that the ‘ignition coils’ needed to be replaced and that the ‘valve cover gasket’ was leaking and also needed to be replaced. When I picked up the car, the service light was off and the car drove fine – no more stuttering – so clearly the analysis of the problem and the solution were correct. However, I left the service department a bit lighter in the wallet than when I went in and with no real understanding of what had happened other than my car had been broken and now it was fixed.

This started me thinking about the fact that everybody speaks a secret language. If I knew how a car engine works, what the parts are, or how they all fit together, my experience may have made perfect sense. But I don’t. Terms like ‘ignition coils’ and ‘leaky valve cover gaskets’ are as foreign to me as ‘je suis confus’ (that’s French for, ‘I’m confused’). The same holds true for other professions – think doctors, dentists and even hairdressers (what the heck is balayage?)!

Estate planning attorneys also speak a secret language that can leave clients puzzled about the advice they receive. While you may not need feel the need to know exactly what your mechanic means when he tells you that you to replace the evaporative emissions purge control valve on your car, it is important to understand what your estate planning attorney means when she tells you that you need to name a successor attorney-in-fact in your durable Power of Attorney.

Estate planning is about the most important thing to most people – their family. Understanding how the decisions you make in your Will, Trust, Power of Attorney, etc. (or that you fail to make if you do not have an estate plan) will affect the people you love is vital. So the next time you are meeting with your estate planning attorney and she advises you to “convey your real estate to a nominee Realty Trust so that it can be used to fund your credit shelter trusts,” make sure she explains ‘the why’ of this to you and that you understand that explanation. In the meantime, if your mechanic tells you that your car needs a new flux capacitor, you might want to look for a new mechanic!

February 2018

Five Do-It-Yourself Estate Planning Moves

February 1, 2018 by Attorney Maria Baler

This is the time of year when New Year’s resolutions about getting an estate plan done (finally) bring people to my office. Others may decide to take matters into their own hands. As an estate planning attorney, I am not a big fan of do-it-yourself estate plans. Whether it’s a so-called Will handwritten on a napkin, or documents created using LegalZoom or any of the other on-line tools, I have never seen a Will or other estate plan document drafted by a client work as intended. For a variety of reasons, these documents are at worst invalid and at best poorly written, creating ambiguity and inevitably leading to more time and expense in the estate settlement process, which is precisely what the drafter was, I suspect, trying to avoid. There is no substitute for an experienced estate planning attorney if you want to create an estate plan that will be valid, cost-effective, and accomplish your goals. However, there are certain things you can do yourself that will go a long way toward ensuring that your estate plan works as you intend. Here are five of them:

Get Organized. One of the first tasks someone will need to complete after your death is to identify your assets. Your family will thank you if it is easy for them to figure out what you own and where your assets are located. Take the time once a year to create a list of your assets – bank accounts, investment accounts, real estate, life insurance policies, annuity contracts, IRA and 401k accounts, etc. Include the institution and the account number. Include information about any safe deposit box you may have and where the key is located. If you have a safe or other place you store assets or important papers in your home, make sure that is on the list. Finally, and despite all advice to the contrary, include your passwords to online financial, social media, email and other accounts. Without that information, timely access to your digital assets may be impossible. After you create this list, update it at least once a year. Then, put it somewhere where it will be easily found if something happens to you. If you have a filing cabinet where you keep your asset information, put the list in the front of the cabinet. Another good option is to make a 3-ring binder where you keep the list along with your most recent account statements. Organizing the paperwork related to those assets in one location is also a plus. Any method that works for you is OK. Keep your estate plan documents and the contact information for your attorney, your financial advisor and your accountant in the same location. Then, tell the person you have named as Personal Representative in your Will what to do when you are gone. It’s enough to say, “If I get hit by a bus tomorrow, go to the bottom drawer of the filing cabinet in the den and you’ll find everything you need there.” A little organization and information will make things a lot easier for your family to pick up the pieces when the time comes.

Check Beneficiary Designations. Identify the assets you own that have beneficiaries designated to receive those assets when you pass away – for example, life insurance policies, annuities, IRAs, 401ks and other retirement accounts. Check with those companies, or with your employer, to confirm who you have designated as the primary beneficiary on a particular policy or account (to receive the asset at your death). Make sure the primary beneficiary is still the person you want to receive that asset. If your designated beneficiary is no longer a good choice, obtain the appropriate form and change the beneficiary – now. Also, confirm that you have designated a contingent beneficiary who will receive the asset if the primary beneficiary is not living at your death, and if you haven’t done so, designate an appropriate contingent beneficiary or beneficiaries. If the beneficiaries you wish to designate are under the age of 18, make sure you understand how the company in question will handle things at your death. It may be that they will require a court-appointed conservator for a minor before money can be paid to the beneficiary. This is a time consuming and expensive process. Generally, designating a trust for the benefit of a minor beneficiary is a better approach. If you have large retirement accounts, make sure you understand the rules that will require minimum distributions from those accounts each year to non-spouse beneficiaries after your death, regardless of their age, and the income tax implications to your beneficiaries.

Specifically Identify Special Items. Your tangible personal property – the contents of your home, your car, your jewelry, your boat – are often overlooked in considering how assets will be distributed at death. If you have tangible property of significant monetary or sentimental value, consider being specific about who should receive these items at your death. Create a list of the items and the people you would like to receive them. Sign and date the list, and re-sign and re-date it when you make changes. Keep the list with your asset list (see #1 above) or with your estate plan documents. This will go a long way to avoid disagreements following your death about who should receive Mom’s engagement ring, grandma’s rocker, or the family’s prized Revolutionary War musket that needs a caretaker that understands and will respect its significance.

Leave Instructions – About your Kids. One of the hardest but most valuable things you can do is write a letter of instruction to your children’s guardian about how you would like your children to be raised if you are not around to do it yourself. As a parent, it is very difficult to imagine what your children’s life would be like if you are no longer there. However, all parents have hopes and dreams for their children, as well as practical information about their children that would be useful for someone to have. So, write it down. “Dear Guardian, If I am no longer living, these are the things I want you to know about my children…” Start with the mundane – who their doctors are, what allergies they have, what they like and don’t like (particular food, scary movies, clowns). Continue with what you hope they will have the opportunity to do in the future – music lessons, a particular summer camp, time each year to visit with extended family who may live far away. This is a letter you will need to commit to updating as time goes on, since as your children get older much of this information will change. It’s not an easy thing to do or commit to keeping updated. However, this kind of information can be invaluable for those who are left to care for your children, and can also give you some peace of mind that if your wishes are known they will be carried out. Keep the letter with your estate plan documents and your asset list.

Name Legacy Contacts. If you use email or social media, consider naming a legacy contact to whom you can give permission to access your “digital assets” stored with that company after your death. For example, Facebook allows you to designate a Legacy Contact (Settings/General Account Settings/Manage Account) who can manage your account after your die, or you can choose to have your account deleted if you pass away. Google allows you to control what happens to your account through their Inactive Account Manager feature (My Account/Personal Info and Privacy/Control your Content), where you can designate when your account will be considered inactive and what will happen to your Google account, and designate one or more people who will have access to whatever portions of your Google account you choose. Keep in mind that if you do not use an online entity’s prescribed method of giving someone permission to access your account, and do not provide express permission and direction in your estate plan documents, the company’s Terms of Service Agreement will govern. In such a case, you and your digital assets are at the mercy of the online provider, which may not allow access following your death or incapacity.

Estate planning is not as easy as do-it-yourself websites may have you believe, and I would not recommend that you try it at home. Work with an experienced estate planning attorney to create estate plan documents that are appropriate for you and that will accomplish your goals after you are gone. In addition, consider taking the steps described above to make things easier for those you leave behind.

Maria Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA). For more information, visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.

February 2018

Estate Planning Considerations for Retirement Accounts

January 17, 2018 by Attorney Maria Baler

These days, I see fewer and fewer clients with pensions that pay them a monthly income for their lifetime, and perhaps for their spouse’s lifetime as well. Most of my clients now have large retirement accounts to which they and perhaps their employer have contributed. These accounts may be in the form of a 401k, 403b or other retirement savings plan through a current employer, a rollover IRA (holding funds rolled over from a former employer), an inherited IRA (holding funds from an IRA of which the client was named as beneficiary) or a traditional IRA or Roth IRA established by the individual client. These types of assets all have certain things in common – the funds in them have for the most part not been subject to income tax (with the exception of a Roth IRA), they are subject to specific and detailed rules for withdrawals during the lifetime and after the death of the account owner, and they often comprise a large percentage of the account owner’s wealth. These factors combine to make it extremely important for clients to pay close attention to how they plan for these accounts.

As an estate planner, my goal is to make sure that the designated beneficiaries of my clients’ retirement accounts are consistent with the rest of their estate plan, that if someone becomes incapacitated his or her retirement funds can be appropriately managed, and that when the account owner dies these valuable assets are properly administered. Most people diligently designate their spouse as the primary beneficiary of their retirement accounts, but many people do not designate contingent beneficiaries on their retirement accounts. Admittedly, the contingent beneficiary designation is a much harder exercise. Should you name a charity, your children, your grandchildren, your second wife, your Trust? What if your desired beneficiaries are young and have no idea what a retirement account is? The decisions that must be made when designating beneficiaries can have far-reaching income tax, estate tax, and other implications for you and your beneficiaries.

Further, many people are not aware that when they die, a non-spouse beneficiary must begin taking minimum required distributions from an inherited retirement account by the end of the year following the year in which the account owner dies. This holds true whether the beneficiary is age 2 or 72, and leads to the important discussion of how to designate the beneficiary of your retirement account if you want to benefit young children. There are pros and cons and tax considerations to deciding whether to name the child individually, or a trust for the child’s benefit, as beneficiary.

It is of course important to get good financial advice about how your retirement accounts are invested. Many of these plans are now self-directed, with on-line tools to help you pick investments that are appropriate for your age and goals. However, if you have a retirement account with several hundreds of thousands of dollars in it, you really should have a conversation about your investments with a human, preferably an experienced financial advisor, rather than your computer.

While you are dreaming about how you will spend that money in retirement (hopefully on living well, doing good, and having great adventures), take some time to consider what will happen if you do not outlive your retirement funds (which is the goal, after all). Consult with an experienced estate planning attorney for advice on how best to plan for those retirement funds consistent with your estate planning goals so that the next generation can continue those dreams!

January, 2018

Five Estate Plan Actions to Take In Light of the New Tax Law

January 4, 2018 by Attorney Suzanne Sayward

Some people put off their estate planning pending passage of the 2017 tax law in case there were changes in the law that would affect their planning choices. The new tax law increases the amount that each person may pass on free of federal estate tax from $5.49 million to $11.2 million. While this is great news for the super wealthy, for the 99.5% of the rest of us, the federal estate tax became a non-issue in 2010 when the exemption from federal estate tax was increased to $5 million per person.

Estate planning has always been about more than tax planning and the reasons to make sure that you have a comprehensively drafted, up-to-date estate plan remain the same as they were before the tax law changed. These include planning for the possibility that you may become incapacitated, making sure that your family is taken care of when you are no longer around to do so, protecting your children’s inheritance from the reach of their creditors, making sure minor children are properly provided for, and reducing the time and costs often associated with estate settlement.

Here are Five Actions to take to make sure that your estate plan accomplishes the goals for which it was created.

Make sure your beneficiary designations are up to date. Many a well-drafted estate plan has been undone by failed beneficiary designations. Beneficiary designations are most commonly used for retirement accounts like IRAs and 401Ks and for life insurance. However, beneficiaries may also be designated on annuities, mutual funds, investment accounts and even bank accounts. A beneficiary designation is a form typically supplied by the company or financial institution and is completed by the owner of the account or policy. The form designates the person or persons who will own the account or receive the life insurance proceeds when the original owner dies. The problems with beneficiary designation forms arise in a variety of ways, from not having any beneficiary named, to having the wrong beneficiary named, to designating beneficiaries that are inconsistent with the rest of your estate plan. This can happen because the form was never updated when the first named beneficiary passed away, or because the owner did not complete a new beneficiary designation form after creating a trust. It can even happen when financial institutions merge or one company is acquired by another and paperwork goes missing in the transition. For many people, their retirement accounts and their life insurance are their most valuable assets. Making sure that beneficiaries are properly designated on these assets is vital in making sure your estate plan works as intended.
Consider whether you should do estate tax planning to reduce the Massachusetts estate tax. Even though few people need to be concerned about the federal estate tax, Massachusetts residents, and non-residents who own real estate in Massachusetts, should be aware that Massachusetts has its own estate tax system that imposes a tax on estates valued in excess of $1 million. For married couples who have more than $1 million, basic estate tax planning can save their families $100,000 or more. Unmarried people with estates over $1 million may be able to reduce or eliminate the Massachusetts estate tax by using an Irrevocable Life Insurance Trust to own life insurance or doing other planning.
Update your estate plan to address changes that have occurred in your family or financial situation or in the law. Think back to five years ago and consider what has changed since then. Everyone in your life is five years older – does that passage of time mean that some people, like children or nieces or nephews, are now better choices to serve in fiduciary roles such as Personal Representative or attorney-in-fact under your Power of Attorney than the people you named five years ago? Have your fiduciaries moved away or perhaps you have just drifted apart and these folks are no longer good choices. What about your financial situation? Has that changed in the past five years? Perhaps you received an inheritance and your estate is now much larger than it was when you created your estate plan. Perhaps you have retired and now have concerns such as long-term care planning that you were not worried about when you were younger. In 2012, Massachusetts enacted a brand new probate law and a brand new trust law. If you haven’t met with your estate planning attorney to review your estate plan and the impact these changes in the law may have had on your plan, it’s time to do so.
If you have created one or more Trusts, make sure your Trusts are properly funded. Creating a trust as part of an estate plan can accomplish many goals. One of the primary reasons for creating a trust is probate avoidance. Probate is the court process of changing the title on assets owned by a deceased person so that the assets can be distributed to the heirs or devisees. Avoiding probate is desirable because probate can take a long time, it is expensive, it means a loss of privacy and it can be an aggravating process. A trust is a great way to pass your estate to your intended beneficiaries outside of probate but this only works if the assets are re-titled in the name of the trust during lifetime.
Learn about your options for long-term care planning and choose the one that is best for you. Long-term care is an area of concern because the cost is very high and because many people want to avoid becoming a resident of a nursing home. Meeting with an experienced estate planning attorney with knowledge of elder law to educate yourself about long-term care planning options is a must for anyone over the age of 65.

Estate planning means taking steps to make sure you and your family are taken care of in the event of incapacity or death. While tax planning is certainly a component of estate planning it is by no means the only reason. If you have not created your estate plan or if it has been awhile since you last reviewed your plan, resolve to make 2018 the year you take care of this important business.

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.

January, 2018

Give the Gift of an Estate Plan – Yours!

December 18, 2017 by Attorney Suzanne Sayward

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

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

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

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

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

December 2017

Five Planning Considerations for Blended Families

December 1, 2017 by Attorney Maria Baler

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

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

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

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

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

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

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

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

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

December 2017

A Panoramic Primer on Probate: Part One

November 15, 2017 by Attorney Abigail V. Poole

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

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

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

Voluntary Administration:

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

Informal Probate:

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

Formal Probate:

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

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

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

November 2017

Five Questions to Ask Yourself when Choosing a Trustee

November 1, 2017 by Attorney Suzanne Sayward

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

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

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

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

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

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

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

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

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

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

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

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

November 2017

Rightsizing

October 15, 2017 by Attorney Pamela Greenfield

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

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

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

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

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

October 2017

Five Scary Estate Planning Traps

October 2, 2017 by Attorney Maria Baler

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

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

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

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

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

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

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

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