Attorney Maria Baler’s Smart Counsel Interview with Attorney Barbara Nason. The interview covers the intersection of Family Law and Estate Planning, including a discussion of the importance of pre-nuptial agreements for both first and second marriages, when you can update your estate plan during or after a divorce, and the importance of making sure your estate plan coordinates with your pre-nuptial agreement or divorce settlement agreement. We appreciate Attorney Nason taking the time to share her wisdom and experience with us. You can find Attorney Barbara Nason here.
Blended Families
Planning for Blended Families and Non-Married Partners
Attorney Maria Baler discusses Planning for Blended Families and Non-Married Partners, for our Smart Counsel for Lunch Series. Please watch and if you have any questions or want to learn more please call us at 781 461-1020.
Who are My Heirs?: Understanding How Your Relatives are Treated Under the Law
Blended families bring together unique dynamics and diverse relationships. As wonderful as these unions can be, they introduce complexities when it comes to estate planning and inheritances. Blended families often consist of spouses with children from previous marriages or relationships.
We often get questions about whether certain relatives can inherit from an estate, such as a stepchild, a son-in-law, or a child who is a part of the family but isn’t legally adopted. How are these relatives treated under Massachusetts law and what should you consider when you are doing your estate planning?
Massachusetts, like many states, has laws governing intestate succession that determine how your estate is distributed when there is no valid Will. Heirs at law are those individuals who are entitled by law to receive your property after your death if you do not have a Will. The order of inheritance prioritizes the surviving spouse, children, parents, and other close relatives.
- Surviving Spouse: If a married person dies intestate and with children, and all of the children are children of the marriage, then the married person’s entire estate will pass to the spouse. However, if either spouse has a child from a prior marriage or relationship, then the amount passing to the surviving spouse is the first $100,000 plus 50% of the remaining probate estate. If a married person dies intestate and does not have children, but has at least one surviving parent, then the estate is divided between the surviving spouse and parent(s).
- Unmarried Partner: An unmarried partner, regardless of the length of the relationship, does not have automatic inheritance rights if there is no Will that provides for the partner.
- Biological and Adopted Children: If an unmarried person dies intestate and has children, then the entire estate will pass to the surviving children. An individual is the child of his/her natural parents regardless of their marital status. A legally adopted individual is the child of his or her adopting parents and will inherit the same as if they were a biological child.
- Stepchildren: A stepchild is not considered an heir at law unless the child was legally adopted by the stepparent. Keep in mind that even though the child was adopted by the stepparent, the child can still inherit from or through his or her natural parent.
- Grandchildren: A grandchild will only inherit if your child (the grandchild’s parent) dies before you. If your grandchild is not your child’s natural or legally adopted child, then the grandchild will not be considered an heir at law.
- Parents and Siblings: If an unmarried person dies intestate and does not have children, then the estate will pass to the surviving parent(s). If the person does not have surviving parents, then the estate will pass to surviving siblings and surviving descendants of any predeceased sibling.
- Distant Relatives: If an unmarried person dies intestate and does not have children, surviving parents, surviving siblings, or surviving nieces/nephews, then the estate will be distributed to the closest living relative, such as a grandparent, aunt or uncle, or cousin.
Life events such as marriages, divorces, births, and deaths can significantly impact your estate plan. If you have a blended family or want to provide for a grandchild or other relative within a blended family, it is important to clearly articulate your intentions and be specific in your estate plan about who receives certain assets. You should not assume that these relatives will automatically inherit from your estate.
Estate planning for blended families requires careful consideration, open communication, proactive planning, and consulting with an experienced estate planning attorney. If you need to create an estate plan for your blended family or if you would like more information on other estate planning matters, please contact our office to schedule an appointment to meet with one of our attorneys.
Attorney Brittany Hinojosa Citron is an associate attorney with Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of trust and estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781/461-1020.
December, 2023
© 2023 Samuel, Sayward & Baler LLC
Five Ways Matters of the Heart Intersect with Estate Planning
It’s almost Valentine’s Day, and our thoughts turn to reminding those we love how much we care about them. However, sometimes our relationships don’t always go as planned. Either way, it’s important that your estate plan keeps pace with your love life. Here are five ways your estate plan should respond when love is grand, or when love stinks.
1. Show your Love with a Good Estate Plan
Estate planning is about making sure the people you care about will be taken care of if something happens to you. Estate plan documents provide a roadmap for your family, naming decision-makers and people who are in charge of settling your estate following your death, and making sure your assets get to the people you wish to receive them. If you have young beneficiaries or those who can’t properly manage assets for themselves, your estate plan can make sure they are taken care of after your death, naming guardians for minor children, and creating trusts to make sure assets are properly managed and applied for young or immature beneficiaries. Your loved ones will remember you fondly if you leave a well-planned estate.
2. Ensuring Continued Support for Parents or Other Relatives
If you provide support to your parents or other older relatives, planning for their continued support if something happens to you is something you may not consider because you do not expect to predecease them. However, if you do, and if the support you provide is crucial to their well-being, your plan should make provisions for their continued support. An important part of planning for aging relatives is making sure any money left to them is left in trust, in a way that will not impact needs-based public benefits they may be eligible to receive to pay for their care. A trust will also insure that after your older relatives pass away, the remaining funds are distributed to people you choose.
3. When Love Goes Wrong
Unfortunately, relationships are not always all chocolates and roses. For couples in the midst of divorce proceedings, estate planning should be a priority. An important part of estate planning is naming decision-makers in the event you become incapacitated and cannot make legal, financial or health care decisions for yourself. While a divorce is pending, you should consider updating your Power of Attorney (for legal and financial decision-making) and your Health Care Proxy (for health are decision-making), to make sure people you trust will make those decision for you. Chances are your existing Power of Attorney and Health Care Proxy name your spouse as the decision-maker, which may not be the person you want to have that authority under the present circumstances.
If you pass away, your estate plan will determine how your assets are distributed. Because a divorce proceeding, among other things, determines the ownership of a couple’s assets, there are some limitations on this aspect of estate planning while a divorce is pending. During divorce proceedings, an automatic restraining order applies that prohibits either spouse from selling or transferring assets or changing the beneficiary on life insurance and retirement accounts except as permitted by Court order or agreement of the other party. Although asset ownership and beneficiary changes may not be made until after the divorce judgment issues, in the meantime divorcing parties can create updated Wills and Trusts that will distribute their assets as appropriate after their divorce is final, keeping in mind that those instructions may not be effective until the divorce is final.
4. After Your Divorce Is Final
Massachusetts law provides for an automatic modification of an estate plan after divorce, although the result may not be what the divorced person intends. In Massachusetts by law, a divorce judgment revokes any disposition of property to the divorced person’s former spouse, including trust provisions, beneficiary designations as to life insurance and retirement plans, transfer-on-death accounts, and any other revocable disposition. If estate plan documents named the former spouse or family members of the former spouse as a fiduciary – such as a Personal Representative (formerly Executor) or Trustee – those designations are treated as if the former spouse and the former spouse’s relatives predeceased the divorced person. Although these provisions may seem to do the trick, in reality they can wreak havoc on an estate plan and create unintended consequences. In addition, in the event a divorced person intends to or is required by their divorce judgment to benefit their former spouse with life insurance or some other asset, steps must be taken to ensure that designation will stick after the divorce occurs. The law also states that if a financial company is not properly notified of the divorce and it makes a distribution to the former spouse then the company cannot be held liable.
Once a divorce is final, each party should review their existing estate plan and beneficiary designations consistent with the terms of their divorce agreement and with the help of an experienced estate planning attorney and make any changes that may be necessary. For example, for a couple with young children, a Trust may be appropriate to manage a divorced parent’s assets for the benefit of those children if that parent were to pass away during a child’s minority. Naming someone that the parent trusts to manage and apply the Trust assets appropriately for the minor children is of the utmost importance for a single parent. If a Trust is not created, the children’s guardian/conservator will have responsibility for managing any assets inherited by the children, and that person is likely to be the children’s surviving parent. For most divorced couples, the idea that a former spouse will have control over the inheritance left to the children is unsettling and inconsistent with their intentions. An estate plan that addresses divorce-related issues can ensure this does not happen, and that the divorced parent’s wishes will be carried out.
Addressing the continued ownership of real estate that will be retained by one member of a formerly married couple is also important. Although a divorce will sever a tenancy by entirety (the form of joint ownership for married couples) and a divorce agreement or order of the court will determine the title, it is still advisable to have a new deed signed conveying the property into the name of the spouse who is retaining it. No matter how sick and tired you are of dealing with your soon to be ex-spouse, don’t walk away until the i’s are dotted and the t’s’ are crossed and that new deed putting the house in your name is signed and filed with the Registry of Deeds. This will ensure you (and you alone) can sell, mortgage or plan with that property going forward, without the involvement of your ex-spouse.
5. Planning for a New Blended Family
And let’s not forget that many divorced people go on to find love again. Estate planning for blended families is extremely important. Re-marriage brings its own set of estate planning challenges, especially if both parties have children from prior marriages or relationships. In such a case, good estate planning is crucial to ensure that if one member of the new couple dies, his or her children from a prior marriage will be provided for appropriately, while the new spouse or partner is also provided for if they do not have sufficient means of their own. It is unfortunate when, because of poor or neglected planning, all of a parent’s assets pass to the new spouse, who then leaves them to his or her own children or family members at death, leaving the deceased’s children with nothing.
When all is well, planning for death or incapacity may not seem to be a priority which means it can be left on the To Do list forever. When a marriage is ending, there are many things that are a priority, and dealing with multiple attorneys at the same time is not a happy prospect (for most people). But estate planning is an important part of taking care of your loved ones. Whether your situation is simple or complicated, whether your relationships are wonderful or not, taking the time to talk through your situation with an experienced estate planning attorney will provide you with options and strategies to achieve your goals, to protect your family, to give you peace of mind, and allow you to show those you love just how much you care.
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 a past President of the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.
February 2023
© 2023 Samuel, Sayward & Baler LLC
Five Family Situations that Merit Special Planning
By Attorney Maria C. Baler
Although it is important for every person over the age of 18 to create estate plan documents, there are some family situations that make it especially important to plan. In these situations, proper planning is crucial to protect your family, achieve your goals and prevent unintended consequences. Here are five family situations where planning is crucial.
1. Disabled or Special Needs Beneficiary
If you have a child, grandchild or other beneficiary of your estate who is disabled or has special needs, that person may now or in the future be eligible to receive public benefits due to their disability. If that person receives an inheritance directly, receipt of those assets will likely make them ineligible to receive those public benefits, which may provide a monthly income, affordable health care, prescription drugs, medical equipment, and needed care. Many public benefit programs have an asset limit of $2,000 for eligibility. If someone who receives Supplemental Security Income (SSI), for example, were to receive an inheritance of more than $2,000, they would lose the SSI benefit until the amount in excess of $2,000 is spent down in an allowable manner. This problem is easily avoided by thoughtful planning – usually by creating a so-called Supplemental Needs Trust for the benefit of the beneficiary, commonly used to preserve needs-based governmental benefits for a person with disabilities. For example, parents of a child with disabilities, can create a third-party trust for the benefit of their child into which the child’s inheritance would be paid at the parents’ deaths. This type of Trust does not need to include a payback provision for benefits the child may have received during life, and assets in the Trust will not cause the beneficiary to lose needs-based governmental benefits. Instead, those assets can be used during the lifetime of the beneficiary to provide the beneficiary with services or experiences that enhance their quality of life and that are not otherwise covered by the benefits they receive. Assets remaining in the trust at the death of the disabled beneficiary may be distributed to other family members
2. Beneficiary with Substance Abuse Disorder or Spendthrift Tendencies
If you would like to benefit a particular person at your death, but are concerned about that person’s ability to manage any assets they receive, you may benefit that person while controlling their access to the inherited assets by directing their inheritance into a discretionary Trust for their benefit, managed by a third-party Trustee. The Trustee you choose will receive the inherited assets after your death and manage those assets for the benefit of the beneficiary. It will be up to the Trustee if and when money is distributed from the Trust to or for the benefit of the beneficiary, based on parameters you create. For example, if a beneficiary has substance abuse disorder, the Trustee could be directed to pay the beneficiary’s rent, health insurance premiums and uninsured medical expenses directly, keeping assets out of the hands of the beneficiary where it may be spent inappropriately. For a beneficiary who is on a path to recovery, the Trust terms could require that the beneficiary undergo drug testing before receiving a distribution to incentivize them to stay clean.
A beneficiary who has spendthrift issues may spend money in ways you do not find reasonable. Sometimes, this is a minor issue (like spending too much money on expensive shoes), or the person may have serious spending issues and have creditors chasing them or a bankruptcy in their past (or future!). If you would like to leave money to such a person in your estate plan, but would like to make sure the inheritance you leave them is not blown on fast cars, fancy handbags or $500 shoes, and/or is protected from current or future creditors, a Trust is the answer. The Trustee will have discretion to use the money for the beneficiary’s benefit, but the beneficiary will not have control over how the money is spent. You may grant the beneficiary the right to request money from the Trust, but the Trustee will judge whether the purpose for which the money is requested is reasonable. Alternatively, the beneficiary’s access could be limited by giving the beneficiary the income from the Trust for life, but no or limited access to principal. This type of Trust can also work well if a beneficiary you wish to benefit is married to a spendthrift, and you are concerned that the spouse of the beneficiary may influence them to spend money inappropriately, or will end up in the spouse’s hands in the event of a divorce or the beneficiary’s death. This type of Trust will also protect the money from a beneficiary’s creditors to the extent it is not distributed to the beneficiary. In this way, the spendthrift beneficiary (or their spendthrift spouse) may spend their own money on expensive shoes, but be assured of having other needs met, if necessary, from the assets you leave in trust for their benefit.
3. Parents in Need of Support
We often see clients who are providing support to aging parents. As parents live longer, some can no longer afford to cover all of their own living expenses, or cover costly care expenses. If they are lucky, their children may be in a position to help them with these expenses. However, a child in this situation needs to consider what would happen if the child predeceased the parent. Without a thoughtful plan, the monetary support the child is providing to the parent could end abruptly, creating unintended consequences. In this situation you would hope that the deceased child’s siblings would step up to the plate and provide needed assistance, however this is often not possible and may be why the deceased child was providing so much assistance in the first place. You would also hope the deceased child’s spouse or children would continue to provide that assistance, however that may also not be possible depending on the extent of the inheritance or how it is left to them, especially if the child was providing support due to a sizeable employment income that ended with the child’s death. Careful planning can ensure that parents who rely on a child’s support will be protected in the event of a child’s death. Using a trust to benefit the parents is an important part of that plan, to ensure assets left directly to parents will not disqualify them from receiving public benefits for which they may otherwise be eligible.
4. Troublesome In-Laws
We all hope the people our children choose to marry are mature, responsible and treat our children well. Unfortunately, this is not always the case. We have all heard statistics about the large percentage of marriages that end in divorce. If you are leaving assets to a child or other beneficiary at death and you have concerns about the stability of the beneficiary’s marriage, or are just not very fond of the person they chose to marry, a Trust can be used to benefit the beneficiary while keeping the inherited assets out of the hands of their spouse, and protecting those assets to a greater extent in the event of a divorce. If assets are not inherited directly by a beneficiary, they cannot give those assets to a spouse, or deposit them into a joint bank account where their spouse has access and ownership. In many cases, assets that are not inherited directly will not be subject to division in a divorce proceeding. To avoid leaving assets directly to a beneficiary with a troublesome spouse, leave those assets in trust for the beneficiary. Establish parameters in the Trust as to how the assets may be applied for the beneficiary. Prevent the Trustee from distributing assets directly to the beneficiary, and instead allow the Trustee to use those assets for the benefit of the beneficiary. Perhaps include the beneficiary’s children or siblings as beneficiaries of the Trust in addition to the beneficiary. Name a Trustee who is not a family member to provide greater protection in the event the beneficiary finds herself in the midst of a divorce proceeding. Although the extent to which a trust offers protection in the divorce context varies depending on the circumstances and the state in which the beneficiary resides at the time of the divorce, trusts offer significantly more protection for inherited assets than an outright distribution to the beneficiary.
5. Blended Families
Although marriages end in divorce, there are many instances of divorced or widowed individuals finding love with a new partner. When one or both partners have children, this can create a situation of competing planning goals – making sure that when they die their partner is taken care of, but also wanting to make sure their children are provided for, and that their money is not directed by their partner away from their children should their partner re-marry or leave assets to their own children. These goals can be achieved with careful planning by thoughtfully deciding which assets are best to leave to a partner vs. children at death. Alternatively, creating a Trust that will benefit the surviving partner during their lifetime, while ensuring that assets remaining in that Trust after the partner’s lifetime will be left to children is a common arrangement. This type of planning is important for people with young children, who may rely on their parent for support and education expenses, and also for those with adult children, who may be devastated when their deceased parent’s assets, particularly assets such as a beloved family home or vacation home, are left to a surviving partner and sold or pass to others at the partner’s death.
People with non-typical situations often delay planning because they fear that there is no good way to achieve their complicated or competing planning goals, or address concerns (sometimes unacknowledged) about the beneficiaries they hope to benefit. Taking the time to talk through your situation with an experienced estate planning attorney will provide you with options and strategies to achieve your goals, and will result in a plan that addresses your special family situation in the best way possible. If you have one of these situations in your family, don’t delay – speak with an experienced estate planning attorney today!
Maria Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), and the immediate past President of the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.
October 2022
© 2022 Samuel, Sayward & Baler LLC
Five Planning Considerations for Blended Families
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.
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.
December 2017
© 2017 Samuel, Sayward & Baler LLC