Estate Planning

How a Marriage or Divorce Can Affect Your Estate Plan

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When it comes to estate planning, understanding how major life events like marriage and divorce can affect your estate is crucial. These events can significantly impact the distribution of your assets if they are not properly addressed in your estate plan. Here’s what you need to know to ensure that your estate plan remains effective and reflects your current wishes.

Marriage: Premarital Wills

If you get married after executing a will but you never get around to updating your will to include your spouse, your premarital will stays in place at your death. However, Massachusetts law allows the surviving spouse to take his or her intestate share of your estate before your property is distributed under your will. The surviving spouse’s intestate share is the share that the spouse would have received if you died without a Will. This is called an “elective share” of your estate, and your spouse can claim this share regardless of what your premarital will says. 

If your premarital will gives property to your child who was born before your marriage and who was from a prior relationship (i.e., not also your spouse’s child), then the surviving spouse’s elective share is taken from the portion of the estate that you did not give to such child. The amount of the elective share that the surviving spouse can take depends on several factors, such as whether you had children with your spouse, whether either of you had children from prior marriages or relationships, and if neither of you had children but you die with a living parent. 

There are exceptions to this rule. If you knew you were getting married, you could have stated in your premarital will that it is being made in contemplation of marriage to your spouse and your will is to be effective notwithstanding any subsequent marriage. But if marriage was the last thing on your mind when you made your will, then you need to revise your premarital will to avoid potential conflicts and ensure that your estate is distributed according to your wishes.

Divorce: Automatic Revocation of Provisions 

If you have a will and subsequently get divorced from your spouse, any provisions you made in your will for your spouse are automatically revoked. This also applies to beneficiary designations on life insurance and retirement plans, transfer-on-death accounts, and any other revocable disposition. If your will named your former spouse or family members of your former spouse as Personal Representative of your estate, those designations are treated as if the former spouse predeceased you. However, if you and your former spouse later marry each other again, then the previously provisions in your will are revived.

This automatic revocation only applies if you are really divorced, not if you are just separated, and not if your divorce is not yet final.

Although the automatic revocation of dispositions to your spouse may seem to do the trick, they can wreak havoc on an estate plan and create unintended consequences. You may intend to benefit your former spouse even after your divorce with life insurance or some other asset, but the beneficiary designation is automatically revoked upon your divorce. Additional steps must be taken to ensure that designation will stick after the divorce occurs.

After a divorce, revising your will is essential to remove your former spouse (or include them, if you want to provide for your former spouse) and make any other necessary changes, such as updating your named Personal Representatives. 

All this is to say that significant life events, whether through marriage or divorce, can dramatically alter your estate plan and result in unintended consequences. By proactively revising your will and other estate planning documents when these events happen, you can ensure that your estate is handled according to your wishes and that your loved ones are provided for as intended.

Attorney Brittany Hinojosa Citron is an associate attorney with the Dedham, Massachusetts, firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information or to schedule a consultation with one of our attorneys, please call 781-461-1020.  

July 2024

 

© 2024 Samuel, Sayward & Baler LLC

Talking to Your Parents about Estate Planning

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With Father’s Day just a few days away, now is the perfect time to initiate a meaningful conversation with your parents about estate planning, blending the celebration of your parents’ legacy with the practical steps needed to preserve it. Despite its importance, only 33% of people in the United States have executed some form of legal estate plan. The sensitive nature of the topic causes many people to kick the can down the road, intending to deal with it later, which is a problem when “later” becomes “too late.” Are your parents included in the overwhelming majority of people who have pushed off this essential legal planning?

Contrary to popular belief, estate planning is not just about distributing assets after a person’s death. Some documents, like a Health Care Proxy and Durable Power of Attorney, actually work during the person’s lifetime so that loved ones have the authority to take care of the person while he or she is living but incapacitated. With aging parents, these documents are just as important as post-death documents like Wills and Trusts. More significantly, estate planning is about ensuring that your parents’ wishes are respected and that their legacies are preserved in a way that reflects their values and intentions.

Initiating this important conversation with your parents may be daunting, so follow these steps to make the discussion a little easier:

Start the discussion by framing it within the context of Father’s Day, emphasizing your desire to honor your parents’ legacy and ensure that their contributions are remembered and cherished. If you feel comfortable, you can briefly discuss key documents such as Wills, which outline the distribution of assets, and Trusts, which can reduce estate taxes and avoid the probate process. You should also highlight the importance of incapacity documents like a Health Care Proxy, HIPAA Authorization, and Durable Power of Attorney. These documents will make it easier on your family if your parents’ capacity is diminished to the point that they cannot make their own medical or financial decisions. Incapacity documents are a safeguard against a long, expensive court process to obtain a guardianship and/or conservatorship that can occur when your parents do not plan ahead.

It’s important to remember that you won’t have all the answers – and you’re not supposed to. That’s our job. Encourage your parents to set up a meeting with an estate planning attorney who can discuss their needs in more detail, give them information about the documents appropriate to their situation, and answer any questions they may have. Father’s Day can be the first of many conversations that ensure your parents’ estate planning remains current and effective. By simply starting the conversation, you’re taking the first step in giving your parents the gift of peace of mind, knowing that their legacy will be honored and their wishes respected, all while strengthening your family’s future security.

Attorney Leah A. Kofos is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of trust and estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781-461-1020.

© 2024 Samuel, Sayward & Baler LLC

 

5 Things your Mom would Tell you if your Mom was an Estate Planning Attorney

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It being May, our thoughts are on longer days, warmer weather, graduations, and Mother’s Day. Being a mom myself, I can say with certainty that while I loved the gifts my children gave me for Mother’s Day, especially the hand-made ones when they were little, nothing warms a mother’s heart more than hearing her children say, “I followed your advice Mom and you were right.” (I think I can hear the mothers out there both agreeing and laughing hysterically…)

Read on for 5 Things your mom would tell you if your mom was an estate planning attorney.

1. Just Do It. Not to infringe on Nike, but if you’re an adult and you don’t yet have an estate plan, just do it. A basic ‘don’t leave home without it’ estate plan consists of a Will, Power of Attorney and Health Care documents. A Revocable Living Trust is an estate planning tool which can address many goals that people have when creating an estate plan such as probate avoidance, management of assets for young or disabled beneficiaries, and creditor protection for inherited assets left to children or other beneficiaries.

2. Get organized. This is the estate plan equivalent of ‘clean your room’ – something your mom may have said to you once or twice. But seriously, I often say to my clients that the best gift they can give to their families is to keep their records organized and updated. Would your family know what bills need to be paid and how to access the funds to pay them if you were incapacitated or at your death? Would they be able to easily discover what financial accounts you have? For many people their financial information is now available only via online access, and therefore they do not receive monthly statements in the mail. This can be a real problem if you have not prepared a list of your accounts (and, at the risk of horrifying IT people everywhere, your user names and passwords to access those online accounts) and made this information available to at least one trusted person. Consider what someone would need to figure out what you own and how to access it and prepare a road map.

3. Check your Beneficiary Designations. Many assets, such as retirement accounts, life insurance policies, and payable-on-death bank accounts, pass directly to beneficiaries when the owner passes away. It is crucial to review and update beneficiary designations regularly to ensure they align with your overall estate plan. Failing to designate beneficiaries or keeping outdated designations can lead to unintended consequences, such as assets passing to ex-spouses or deceased individuals. It can also have serious negative tax consequences when it comes to qualified retirement accounts. Reviewing your beneficiary designations on a regular basis is also important. When financial advisors change companies, the beneficiary designations that were set on the IRAs with the old company do not carry over to the new company. The fairly simple task of making sure the beneficiary designations are current will go a long way to ensuring a smooth, probate-free, and tax efficient transition of these assets at your death.

4. Make Sure Someone’s Watching the Children (Mom’s Grandchildren). For those who have minor (under age 18) children, it is vital to create a Will to name one or more people as the legal guardians for those minor children. The legal guardian of a minor child is the person who will have physical custody of the child and decide where child will reside, where the child will go to school, and oversee their religious education. The legal guardian is also the person who will have the authority to make medical decisions and have access to school records. However, naming someone in your Will as the guardian for your minor child does not confer the legal status of guardian; only a court can appoint a legal guardian. The naming of a guardian by parents in their Wills is an expression of their wishes which the court will honor (unless there is a valid objection raised but that’s a topic for a different day) but the process takes time. Because of that delay, parents should also sign a document appointing a temporary guardian for their minor children. Massachusetts has a statute that permits parents to appoint a temporary (for 60 days) guardian for their minor or disabled children. This allows time for the court to act to appoint the permanent legal guardian. The appointment of the temporary guardian does not require the involvement of the court.

5. Save Taxes if you can. When estate planning attorneys talk about taxes, we are usually referring to estate taxes. The estate tax is a transfer tax imposed on the value of assets transferred to beneficiaries when someone dies. There is both a federal and a Massachusetts estate tax. For both federal and Massachusetts purposes, assets that pass to a surviving spouse pass free of any estate tax regardless of the value of the assets. For assets passing to a person other than a surviving spouse, there is estate tax payable if the value of the estate exceeds the allowable exemption amount. In 2024, the federal estate tax exemption is $13.61 million and $2 million in Massachusetts. If your estate is at or above those levels, consult with an experienced estate planning attorney about planning to reduce estate taxes.

Creating and maintaining a comprehensive, up-to-date estate plan is a gift to your family that they will truly appreciate. If you don’t have an estate plan, or if it’s been more than five years since you’ve reviewed your existing plan, call us or email us to schedule an appointment with one of our estate planning attorneys. And Happy Mother’s Day to all the mothers out there!

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 www.ssbllc.com or call 781/461-1020.

May, 2024
© 2024 Samuel, Sayward & Baler LLC

Estate Planning for the New Year

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As we move at what seems like the speed of light towards the new year, it is the perfect time to reflect on the past and set goals for the future. Beyond the usual resolutions, consider dedicating some time to comprehensive estate planning to prepare for the year ahead. This means taking proactive steps to organize your affairs and solidifying a sound financial and legal foundation for the upcoming year.

  1. Designate Beneficiaries
    One of the first steps to confirm your financial future (and your beneficiaries’ financial futures) while moving into the new year is to review and update your beneficiary designations, as necessary. This includes beneficiary designations for life insurance policies, retirement accounts, and annuities. You should ensure that the designated beneficiaries align with your current estate planning wishes, and that you have both primary beneficiaries and contingent (back-up) beneficiaries designated on those assets.
  2. Organize Documents
    Take the time to find and organize your important documents, such as your Will, Trust, Power of Attorney and Health Care Proxy. Create a comprehensive list of assets and liabilities along with bank, investment and retirement account information. It is also important to create and keep up-to-date a list of any and all accounts you have online together with the password and other access information. This can include email accounts, social media profiles, online banking, and any other platforms where you hold digital assets. Keeping your financial records in order makes it much easier for your loved ones to navigate your affairs in case of an emergency.
  3. Health Care Proxy and MOLST
    Health care decisions are crucial aspects of planning for the future. Share a copy of your health care proxy with your primary care physician and with your named health care agents and make sure they understand your medical preferences. Additionally, consider completing a Medical Order for Life-Sustaining Treatment (MOLST) form with your primary care physician if you have a terminal illness or you are in your mid- to late eighties or older.
  4. Consultation with “Support Team”
    Schedule meetings in the beginning of the year to consult with your “support team”, such as your estate planning attorney, accountant, and financial planner to review your overall financial and legal strategy in the event you become incapacitated or pass away. An attorney can help ensure your estate plan is comprehensive and appropriately reflects your current wishes, while an accountant can provide valuable insight into your tax planning for the upcoming year. A financial planner can assist in aligning your investments with your long-term goals, which becomes more and more crucial after you retire.
  5. Tell Someone!
    Having all those documents organized and in place is only helpful if one or more of your loved ones know they exist. Beyond sharing your health care proxy with your health care agent (and primary care physician), put a copy of it along with the MOLST in an easily accessible, visible location such as on the refrigerator or near your front door. It is absolutely critical that you tell a trusted individual where they can find a copy of your other estate planning documents and the contact information of your support team members so that person knows right away where to go and who to contact in the event of an emergency.

Taking the time to make sure you have a plan in place for the new year by doublechecking you have beneficiaries designated, organizing your documents, sharing your health care proxy, consulting with your support team, and telling a trusted family member or friend about all your efforts is a proactive and responsible approach. By addressing these aspects comprehensively, you will gain peace of mind and also make possible a smoother transition during unforeseen circumstances.

December, 2023
© 2023 Samuel, Sayward & Baler LLC

Five Things Your Estate Plan Allows You to Be Thankful For 

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Estate planning is hard.  Discussing topics like incapacity, death and taxes are unpleasant.  It’s the reason why an estimated two-thirds of Americans do not have an estate plan.  But like many hard things, after it is done there is a sense of accomplishment and relief, and in many cases gratitude.  Estate planning may be something you have been putting off for years, if not decades.  Getting it done is a great feeling, and something that benefits not just you but your loved ones.  Estate planning is an essential aspect of financial well-being and ensuring that your assets and loved ones are protected.  Here are five things to be thankful for when your estate plan is done.

1. Peace of Mind

One of the most significant benefits of estate planning is the peace of mind it provides. Knowing that your affairs are in order and that your loved ones will be taken care of in the event of your passing can be a great source of comfort. For families with minor children, estate planning means you have put in place a plan for your children to be taken care of by someone you choose if you pass away while they are still young.  It also means that you have created a trust so inherited assets can be managed for young children until they are mature enough to take control of those assets themselves.  Estate planning minimizes the potential for family disputes over assets, designates decision-makers of your choice, and makes the difficult process of grieving much more manageable for your heirs.

2. Control Over Your Legacy

Estate planning allows you to have control over your legacy. You get to decide how your assets will be distributed, who will receive them, and under what conditions, and who will oversee that process.  Holding assets in trust for minor children or a beneficiary with special needs is important.  It may also be important for older children for whom asset protection is a concern due to an unstable marriage, a pattern of mismanagement of assets, profligate spending, creditor issues, gambling issues or substance abuse.  This control ensures that your assets are used in a way that aligns with your values and priorities. Whether you want to support your family, friends, favorite charities, or any other cause close to your heart, estate planning allows you to make that happen.

3. Tax Efficiency

Effective estate planning, especially in a state such as Massachusetts with a separate state estate tax, can reduce the tax burden on your estate, leaving more of your assets to your loved ones. By using strategies like trusts, gifts, and other tax-efficient mechanisms, you can maximize the wealth you pass on to the next generation.  If you have a large IRA or other tax-deferred retirement plan, the estate planning process will help you understand how the income tax on these assets will impact you and your heirs.  You will be thankful for the opportunity to minimize the impact of these taxes on your estate and your heirs to ensure that your beneficiaries inherit as much as possible.

4. Smooth Transition of Assets

The estate planning process starts with compiling information about the assets you own, how they are owned, and how beneficiaries are designated.  Creating such an inventory and keeping it up to date will go a long way toward helping the people who are implementing your estate plan carry out their duties efficiently.  Ensuring your assets are owned properly and beneficiaries are designated appropriately and consistent with your plan is an important part of estate planning and will ensure your plan works as intended.  In Massachusetts, where the probate process can take a year or more to complete, the use of Trusts in an estate plan can avoid the probate process and allow for immediate access to assets at death.  This means that your beneficiaries will receive their inheritance more quickly and with far less delay and frustration. The ability to provide a seamless transfer of wealth will give you peace of mind and will be a source of gratitude for your heirs after your death.

5. Your Team

It takes a village, as they say, and estate settlement and trust administration is no exception.  If planning is done properly, an important part of the legacy you leave will be a team of advisors – your estate planning attorney, your accountant and your financial advisor – who will guide and advise your family after your lifetime while ensuring your estate plan is carried out according to your instructions.  Introducing your family to these team members while you are alive can ensure an even more seamless transition.  You will be thankful for the guidance your team provides you during your lifetime and will have peace of mind knowing they will be there to guide your family after your death.

Estate planning offers peace of mind, control over your legacy, tax efficiency, a smooth transition of assets, and a team that will guide you and your loved ones through whatever the future brings.  If you have not already created your estate plan, start the process.  If you have an estate plan in place, make sure it is up to date.  And while you are planning, be thankful for the opportunity estate planning provides to secure your family’s future, provide for charitable causes, and make your passing more manageable for those you leave behind. Your heirs will certainly thank you after you’re gone.

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

November 2023

© 2023 Samuel, Sayward & Baler LLC

 

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

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