Trusts

What does a Snowstorm have to do with Estate Planning?

March 26, 2018 by Attorney Suzanne Sayward

The snows and no-snows of March set me to thinking about disruption. When I was a kid, waking up to a foot of snow was one of the most joyful events of my life – especially if it happened on school day. As an adult, I have the opposite reaction. In fact when I looked out the window on March 22^nd and saw that the meteorologists’ prediction of a huge overnight snowfall was a complete bust, I was filled with delight. In thinking about my two-selves’ different reactions to snow, I came to the conclusion that it is all about disruption. As a kid, I loved unexpected disruptions – a snow day, a fire drill, a fight at recess. As adults we are not so fond of disruptions – some people even dislike holidays! In many ways, undertaking estate planning is about planning to minimize disruption when the unexpected happens. The events that we are planning for when we create an estate plan are sickness and death. If you, your spouse, your parent or your grandparent, gets sick or has an accident and is incapacitated as a result, that is a very disruptive event not only to person who is incapacitated but also to family members who are caring for the ill person. Decisions about health care will need to be made, bills will need to be paid, maybe the house will need to be sold. These added tasks are disruptive to the lives of the people who must take them on, but it is even worse if the incapacitated person does not have a Health Care Proxy and Durable Power of Attorney that legally authorize people to make health care decisions, pay bills, deal with real estate, file tax returns, etc. If no such documents exist, then family members are forced to petition the probate court for guardianship and/or conservatorship in order to obtain the legal authority to make decisions and take action. Believe you me, there is nothing quite so disruptive as having to deal with the probate courts – not to mention the expense involved in any court proceeding. Similarly, if someone dies without a Will or Trust, the cost, time and aggravation of settling the estate are multiplied – more disruption! You can reduce the disruption caused by incapacity and death by getting your affairs in order and creating (or updating, if it’s been a while) an estate plan. As to the next snow storm….my advice, flee to Florida!

March, 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 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

Planning for Your Digital Assets

September 14, 2017 by Attorney Maria Baler

Digital assets did not exist 25 years ago, but they are now part of our everyday existence. Things like the contents of our Facebook, Twitter and Instagram accounts, photographs stored online, digital music, YouTube videos, on-line gaming accounts, domain names, and email are all digital assets – a collection of our digital property and electronic communications. To the extent these accounts contain information that you would like someone to be able to access after your death or incapacity, it is necessary to plan to provide the appropriate authority and instructions for what you want done with these “assets.” For some types of these assets, planning is crucial to prevent financial loss (i.e. the loss of a domain name used for business purposes), to protect sensitive personal information (on-line dating websites), to avoid identity theft, and to allow access to valuable assets (think bitcoin, an author’s manuscript, or family photographs).

Most of us create digital assets without a thought as to what will happen to those “assets” if we are no longer around or able to access them. Even if you share your password for your on-line accounts with a trusted person, keep in mind that it is a violation of federal law for anyone other than you to access your accounts (because password sharing is prohibited under most terms of service agreements) unless the person with whom you share your password has the legal authority to access your account.

This is an emerging area of estate planning. The Uniform Fiduciary Access to Digital Assets Act (UFADAA) is an attempt to create some clarity in this area. Massachusetts is one of only a handful of states that has not enacted this law, or even introduced it for consideration. Hopefully our state legislature will not delay much longer. The law allows fiduciaries to take action to marshall and protect the digital assets of the deceased or incapacitated person on whose behalf they are acting. As a rule, access is difficult to obtain because on-line providers all have different policies or terms of service agreements with their customers. The Uniform Act’s purpose is to bring some uniformity to these policies as they relate to fiduciaries, and to extend a fiduciary’s power over assets in a deceased or incapacitated person’s “estate” to include digital assets, giving a fiduciary the legal right to access online accounts.

The Massachusetts Supreme Judicial Court is in the process of deciding the case of Ajemian v. Yahoo!, Inc. In this case Mr. Ajemian died with a Yahoo email account, and Yahoo would not allow access to his account to his siblings who were the administrators of his estate. This case has been bouncing around the court system since 2007 on procedural grounds, including whether the case had to be decided by a California court (where Yahoo is located) or whether the case was properly decided in Massachusetts where Mr. Ajemian was a resident prior to his death. The Court now seems poised to decide the substantive issue of access to emails, after oral arguments in March of this year.

Here are some tips to manage your digital assets until Massachusetts law and a path to access becomes clearer:

If an online entity offers a way for you to give permission or access to your digital assets stored with that company, pay attention and follow the directions. 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). Here 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.
Update your estate plan documents, specifically your Power of Attorney, Will and Trust, to ensure those documents provide express permission for the fiduciaries named in those documents to access your digital assets, and express direction regarding what should be done with specific digital assets at death. In our office, we include express permission for access in these documents, and provide our clients with a Digital Assets Memorandum that can be used to record instructions about digital assets.

Keep in mind that if you have not used an online entity’s prescribed method of giving someone permission to access your account, and do not have 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.

September 2017

Five Things a Well-structured Estate Plan Can Do For Your Children

July 31, 2017 by Attorney Maria Baler

As you spend time with your children and grandchildren during the lazy days of summer, it is a good time to think about your estate plan, and whether it is structured in a way that takes care of your family. Here are a few ways a good estate plan can protect and provide for your children:

Protect the inheritance you leave your children. If you pass away before your children are mature or experienced enough to responsibly manage the assets they inherit from you, those assets may very well be lost to your children’s creditors or poor judgment. Some risks to a child’s inheritance include substance abuse, persistent friends in need of money, failed marriages, bankruptcy, irresponsible spending and lawsuits. A Trust can hold your child’s inheritance and name a Trustee to manage and protect those funds for your child. The Trustee can use the Trust assets for your child’s benefit for reasons the Trustee determines are appropriate, or for reasons you specify in the Trust. These could include making sure your child can pay tuition, pay for a wedding, buy a home, or start a business. The Trustee can manage the assets for your child’s lifetime or for a specific period of time (for example, until age 35).

Protect a disabled child’s benefits. If you have a child that receives needs-based government benefits because of a disability, or may need those benefits in the future, your estate plan should include a trust for the benefit of your child. A supplemental needs trust that receives and manages the assets your child inherits will allow those assets to be used for the benefit of the child throughout the child’s lifetime, but will not disqualify the child from receiving any needs-based benefits the child may now or in the future be eligible to receive. A Trust can also be used to hold the child’s own assets in order to protect those assets and facilitate eligibility for benefits. If you have other family members who want to leave assets for the benefit of a disabled child, make sure they understand that proper planning is important to ensure that inherited assets will not affect the child’s eligibility for benefits.

Ensure future vacations at the family vacation home. For children young and old, the family vacation home is a special place that parents often want to pass on to future generations. Careful planning can ensure that long-term care costs and estate taxes do not get in the way of your family being able to keep the vacation home and continue to enjoy it. Considerations about managing and paying for a vacation property are also important issues to address when planning for such a property. A Limited Liability Company, trust, or co-ownership agreement can create a structure for dealing with issues such as use of the property, shared expenses, maintenance and repairs, and rentals. A well-structured plan will also make provisions for the death or disability of an owner, and the buy-out of an owner’s share if they pass away, become disabled, or just want out.

Ensure that your minor children are properly cared for in the event of your death. If you’re lucky this summer, you may be able to get away for a weekend with your spouse and leave your young children at home with your parents or friends. Most parents prepare for a weekend away by leaving instructions behind about caring for the children while they’re away. Think of an estate plan as a set of instructions for how your children should be cared for if you are not there. Although it is difficult to contemplate the possibility that you may pass away leaving young children, planning for that possibility will ensure that your children are in a far better position than if you did no planning. Planning ahead means that you are the one who chooses the people that will take care of your children, not the Court. Creating an estate plan means you can make your house available for your children and their guardian to live in, so your kids can stay in the family home, continue to go to school with their friends, and graduate from high school in the town they grew up in.

Help your children with health care decisions. Children who are age 18 or older are adults in the eyes of the law. This means that they make their own health care decisions. If your college-age student is ill, her doctor cannot share medical information with you without your child’s permission. If your child’s condition means that she is not able to grant that permission, you may find yourself unable to obtain information or make decisions about your child. A health care proxy is a document by which your child can name you to make health care decisions for her if she is unable to make those decisions herself. Your child can sign a HIPAA Authorization to give permission for physicians and other medical professionals to speak with you and release information. These are simple documents that can make access to information and decision-making possible in the event of a child’s unexpected illness.

The peace of mind that comes with good planning will help you enjoy your summer vacation. If you haven’t gone through the estate planning process, the summer is a good time to consider how you would want your plan to provide for your family, and take the first step in putting that plan in place. Time flies and summer will be over before you know it, so don’t wait!

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.

July 2017

Five Facts to Know about Irrevocable Trusts

July 10, 2017 by Attorney Suzanne Sayward

In my estate planning and elder law practice, many clients express curiosity about Irrevocable Trusts, wanting to know what an Irrevocable Trust is used for and how it works. Here are five things to know about Irrevocable Trusts.

1. An Irrevocable Trust has beneficiaries who have rights to the Trust property. It is a common misconception about Irrevocable Trusts that no distributions can be made from the trust. That is not true. Very often, a parent or grandparent will create an Irrevocable Trust for the benefit of a child or grandchild. The parent or grandparent may want to make a gift but does not want the beneficiary to have unlimited access to the gifted funds. This could be because the beneficiary is young, has a disability, or simply has not demonstrated good judgment in money matters in the eyes of the grantor (the person creating the trust and making the gift). The grantor may also want the gifted assets to be protected from the beneficiary’s creditors. The grantor will specify in the trust document when and for what reasons the Trustee (think “manager”) may make distributions from the trust for the beneficiary. For example, the trust might direct the Trustee to pay the beneficiary’s education or health expenses. Alternatively, the trust may permit the Trustee to use the trust funds for the benefit of the beneficiary for whatever reason the Trustee determines to be appropriate.

2. Under some circumstances, an Irrevocable Trust can be amended. As a general rule, the person who creates an Irrevocable Trust cannot amend it. However, some Irrevocable Trusts contain a provision allowing someone else to amend the trust. For example, parents who have a child with disabilities will often create an Irrevocable Trust to ensure that the assets the parents leave for the child will not cause the child to lose eligibility for government benefits. These trusts may include a provision permitting the Trustee to amend the trust if the law changes and impacts the trust, causing the child to be ineligible for such benefits.

3. The Trust creator can retain the right to change the ultimate beneficiaries. A person who creates an Irrevocable Trust can retain the power to change how the trust property will ultimately be distributed – this is called a power of appointment. For example, say Mary creates an Irrevocable Trust that states that when she dies, the trust assets will be distributed to her three children in equal shares. After the trust is created, Mary’s son Alan becomes embroiled in a nasty divorce. Mary is worried that if she dies while the divorce is ongoing, that Alan’s one-third of the trust property could end up going to Alan’s soon-to-be-ex-spouse.

Even though Mary’s trust is irrevocable and she cannot sign an amendment changing the trust terms, Mary can change how the trust assets will be distributed at her death via her Will because she reserved a power of appointment over the trust assets. A reserved power of appointment over the ultimate distribution of the trust assets allows Mary to change the distribution so that Alan’s share of Mary’s trust assets will not be reachable by Alan’s divorcing spouse.

4. The Trust creator may still be considered the owner of the assets in the Irrevocable Trust. When you transfer assets to an Irrevocable Trust, you may or may not still be the “owner” of the assets in the trust for tax purposes. Sometimes it is advantageous to be deemed to be the owner and sometimes it is not. For example, life insurance is taxable in the insured’s estate for estate tax purposes if the policy is owned by the insured. If the policy is large and the insured has a taxable estate, this means that between 10 and 40 percent of the life insurance proceeds will be lost to estate taxes. If the insurance policy is owned by an Irrevocable Life Insurance Trust, then the life insurance policy will not be deemed to be owned by the insured and the proceeds will not be taxable in the insured’s estate. On a $1 million life insurance policy, this could save between $100,000 and $400,000 of estate tax.

On the other hand, sometimes it is desirable to be deemed to be the owner of Irrevocable Trust property for tax purposes. For example, say Harry has a total estate of $850,000. He has a house that he bought for $30,000 many years ago and that is now worth $350,000 and CDs totaling $500,000. Harry does not need to be concerned about estate taxes because his total estate is valued at less than $1 million and there is no Massachusetts estate tax on estates of less than $1 million (the federal threshold is $5,490,000). However, Harry should be concerned about capital gain tax. If he is not the “owner” of his house for tax purposes when he passes away, then when Harry dies there will be capital gain tax payable on the difference between Harry’s tax basis in the property ($30,000) and the sale price ($350,000). The capital gain tax on $320,000 ($350,000 — $30,000) would be about $64,000.

If the Irrevocable Trust included provisions that caused Harry to be deemed to be the owner for tax purposes, then when the house is sold following Harry’s death, there would be no capital gain tax payable because the house would receive a “stepped-up” basis at Harry’s death. This means the tax basis in the house is equal to the fair market value at Harry’s death.

5. The person who creates the Irrevocable Trust may be the beneficiary. Clients often assume that if they transfer assets to an Irrevocable Trust they give up all rights to the assets. This is not necessarily true. A very common Irrevocable Trust used for long-term care planning is an Irrevocable Income Only Trust. In this type of trust, the grantor (the person creating the trust) receives the income generated by the assets in the trust. For example, let’s say that Jane owns a three-family rental property and is worried that if she needs long-term nursing home care, the property will be consumed by the costs of that care. She doesn’t want to give the property to her children because she is worried about her children’s creditors (divorcing spouse, bankruptcy, tax lien, etc.). In addition, Jane wants to keep receiving the rental income. Jane can transfer the property to an Irrevocable Income Only Trust and continue to receive the net rental income. After the five-year ineligibility period for gratuitous transfers has passed, the property in the Irrevocable Trust would not be deemed to be owned by Jane in the event she applies for Medicaid (MassHealth) benefits to pay for her long-term care under the current law.

These are just five facts to know about Irrevocable Trusts. If you want to know more about whether an Irrevocable Trust is right for your situation, contact an experienced estate planning to discuss your goals.

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.

July 2017

Five Ways in which a Trust is Better than a Will

May 8, 2017 by Attorney Suzanne Sayward

Sue_144px Wills and Trusts are both estate planning documents used to pass assets on to beneficiaries at death. However, there are distinct advantages to using a Trust over a Will. Here are five ways in which a Trust is better than a Will to pass your estate to your beneficiaries.

A Trust can be used to Avoid Probate – a Will cannot. Probate is the process of changing the title on assets when someone passes away. Assets that are owned in a deceased person’s individual name and for which there is no named beneficiary are no longer accessible once the owner of the asset has died. In order for family members to gain access to accounts or other assets in the deceased’s individual name, they must file a petition with the probate court and wait for the court to approve the Will and appoint the Personal Representative. This can be a long and costly process during which bills cannot be paid and assets cannot be managed. A Trust is an excellent probate avoidance tool because assets that are owned in the name of a Trust are immediately accessible to the trust-maker’s designated successor.

A Trust can provide Creditor Protection for the Inheritance you Leave to Beneficiaries – a Will cannot. Many people worry that the inheritance they leave to their children will be lost to their children’s creditors such as a divorcing spouse, unpaid credit card bills, a bankruptcy, a business loss, or a lawsuit. Sadly, this is often the case when assets are distributed to beneficiaries via a Will. A Trust allows the maker to safeguard an inheritance from the reach of the beneficiaries’ creditors by keeping the assets out of the name of the beneficiary. Ownership of the assets remains in the Trust. The beneficiary will have access to the assets in accordance with the directions you leave in your Trust. You may also allow your beneficiary to serve as Trustee, allowing the beneficiary to manage her own inheritance. By leaving assets to your beneficiaries via a Trust rather than outright via your Will, you can ensure that the assets you worked so hard for will be available to your children and future generations.

A Trust can Protect Governmental Benefits for a Person with Disabilities – a Will cannot. If you have a child, grandchild or other beneficiary with disabilities, then a Trust is a must. If you leave assets to a person who receives needs-based governmental benefits via your Will, it will place your beneficiary in the difficult position of either losing those benefits, or transferring the inheritance into a Trust of which the state must be the beneficiary at the beneficiary’s death. Unless the inheritance you are leaving is so significant that the monetary and medical benefits available to the person through programs such as Social Security and Medicaid are no longer important, then making sure that those governmental benefits continue to be available is vital. Leaving assets to a person with disabilities via a Trust is the best way to ensure those governmental benefits are preserved and that the inheritance you leave will be available to pay for expenses that are not covered by these governmental benefits, which while vital to many, are limited in their scope.

Trusts can Reduce Estate Taxes – a Traditional Will cannot. Many married couples have so-called “I-love-you” Wills, which leave all assets outright to the surviving spouse upon the first death. If you have an estate of more than $1,000,000, then using “I-love-you” Wills means that money you think you are leaving to your beneficiaries will in fact be going to the Commonwealth of Massachusetts in the form of estate tax payable at the surviving spouse’s death. If you would prefer that your assets pass to your family, create Trusts to reduce estate taxes. Estate tax planning via Trusts for married couples is standard planning and permissible under both state and federal tax laws.

A Trust can Administer Assets for Minor Beneficiaries without Court Intervention – a Will cannot. Leaving money directly to a minor creates an administrative nightmare because the law provides that a minor does not have the legal capacity to receive assets. The parent of the minor also does not have the ability to act as the child’s legal representative until the court says so. As such, if you die with a Will that leaves money to minor beneficiaries, the court will need to appoint a Conservator to receive that inheritance for your children. The Conservator will be required to report annually to the court and the court will appoint an overseer (guardian ad litem) to make sure the Conservator is doing his or her job for your minor beneficiaries. This means huge costs and long delays in administering funds for minors. It also means that when the minor turns 18, he or she will be entitled to receive all of those assets and will be free to do with them as he or she wishes (think fast cars, spring break, and lots of shopping). Creating a Trust to receive assets passing to a minor, or even to a young adult beneficiary, is the best way to ensure that the court is not involved in the process, that the person you want to manage assets for the beneficiary is able to do so, and that the beneficiary can use the assets only for purposes you decide are important and/or at ages that you dictate.

These are just five ways in which a Trust is superior to a Will. If you want to know more about whether a Trust is right for your situation, contact an experienced estate planning attorney to discuss your goals.

Attorney Suzanne R. Sayward is certified as an Elder Law Attorney by the National Elder Law Foundation. She is a partner with the Dedham firm of Samuel, Sayward & Baler LLC. 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.

May 2017

Five Ways to Make Sure Health Care Wishes are Carried Out

April 1, 2017 by Attorney Maria Baler

Maria_144px Estate planning attorneys have the opportunity to speak to people at all stages of life. Some of the most profound conversations we have are with clients who have serious illnesses or are close to death. They often have great clarity about life and what is important. Many of them also have definite thoughts about how they wish to be cared for at the end of their lives, and care deeply that their wishes are heard and carried out.

We all have the right to make our wishes known about the type of end-of-life care we want. Making your wishes known while you are well is important as an accident or an unexpected illness may cause you to lose the ability to express your care preferences. This April marks the 10^th anniversary of National Healthcare Decisions Day. Here are five ways you can ensure your care preferences are clearly documented and honored:

Create a Health Care Proxy. If you are over the age of 18, make sure you have signed a Health Care Proxy that designates a person you choose (your Health Care Agent) to make health care decisions for you if you become unable to make or communicate your own health care decisions. Give your doctor and your Health Care Agent a copy of your Proxy. Then, have a conversation with your Health Care Agent about your feelings about health care and the type of care you would want in certain situations. See No. 5 below for some resources to get you started. If you are hospitalized, remember to bring your Health Care Proxy with you to the hospital. This will ensure you are not asked to sign another Proxy that will revoke the Proxy you currently have in place and that may not be as comprehensive.

Assemble a Care Committee. For those who have very definite ideas about where and how they wish to be cared for, consider assembling a Care Committee to ensure your care wishes will be carried out, particularly if you have a chronic illness. This group may consist of your Health Care Agent, a professional care manager, your attorney, your physician, the person you have named to make financial decisions for you if you are incapacitated, and perhaps your financial advisor. Choose the participants, have discussions with them about your care preferences, and develop a plan that is financially realistic. Have a discussion with your Care Committee periodically to modify the plan as your needs and wishes change. Think of your Care Committee as a team that can help your Health Care Agent carry out your wishes as necessary.

Sign a Living Will. There are many advance directives that can be used by clients to express care preferences. A Living Will typically expresses a general preference that no extraordinary measures be used at the end of life. In Massachusetts, Living Wills are not legally binding, and your physicians will not act based upon your Living Will (only at the direction of your Health Care Agent). However, a Living Will can serve as evidence of your wishes that will guide your Health Care Agent in making decisions about end-of-life care.

Advance Medical Directives. A Medical Directive can be used to express care preferences in specific medical situations. Do Not Resuscitate or Do Not Intubate orders are medical orders that a doctor will put in place at a patient or Health Care Agent’s direction in appropriate circumstances. In Massachusetts, a MOLST (Medical Orders for Life Sustaining Treatment) form is a useful document created by patient and doctor together that includes medical orders for care preferences, including resuscitation, ventilation, intubation, dialysis, artificial nutrition and hydration, and whether or not you should be transferred to a hospital. This initiative is known as POLST (Physician Orders for Life Sustaining Treatment) on a national level.

Use the Available Tools. There are many Massachusetts and national organizations working to increase awareness of the value of advance care planning and to encourage people to express their care preferences. The Massachusetts Coalition for Serious Illness Care and related organizations have designated April as Massachusetts Healthcare Decisions Month, and has tools and resources on its website. Honoring Choices is another Massachusetts organization bringing information about health care decision-making and outreach to many local communities, as well as helping people to create a Health Care Proxy and express their health care preferences. The Conversation Project is dedicated to making it easier for people to talk about their wishes for end-of-life care. Both Honoring Choices and The Conversation Project have starter kits on their websites that make it easy to get started.

As part of Healthcare Decisions Month, several Boston-area organizations will also be hosting Before I Die, a global public art project that invites people to share their personal aspirations in public, reflect on what’s most important to them in life and how they contemplate death. Use whatever tool or inspiration works for you, and find a way to express your wishes about end-of-life care to the people who will make those decisions for you.

April 2017

Five Reasons to Call an Estate Planning Attorney

February 1, 2017 by Attorney Maria Baler

Maria_144px Estate planning attorneys work with clients every day to ensure their wishes are carried out in the event of illness or death. While it’s not pleasant to think about, planning ahead will make it easier for your loved ones during difficult times. An estate planning attorney can help you create documents (such as a Will and/or Trust) that provide instructions about distribution of your assets at death, minimize probate expenses and estate taxes, name guardians for minor children, and manage inherited assets for your beneficiaries. An estate planning attorney can also help you plan for incapacity by creating powers of attorney and health care documents that allow individuals you choose to make financial and health care decisions on your behalf.

Some estate planning firms advise clients on elder law matters — how to plan for long-term care (both pre-planning and addressing a crisis situation when the need for care is imminent), how to pay for that care (including whether you are eligible for public benefits such as Medicaid benefits), and whether advance planning is appropriate.

Here are five reasons you should call an estate planning attorney.

You are a parent. If you are the parent of a minor child (defined as under the age of 18 in Massachusetts) you should have a Will that names a legal guardian for your child. Parents of minor children and young adults should also consider creating a Trust that will hold and manage assets for your child’s benefit, to ensure your child does not receive control of inherited assets at age 18, and to designate a trusted individual to manage those assets for your child until your child reaches an age that you deem is appropriate. If an adult child has substance abuse, gambling, or creditor problems, or is in a bad marriage, it may be appropriate to hold assets in trust to protect the assets and ensure they will be available for the child’s benefit in the future.

You (or your spouse) receive a serious medical diagnosis. If you have a serious illness, sitting down with your estate planning attorney may not be at the top of your list. However, it is important to plan while you are competent to make decisions about your future. If you or your spouse need long-term care or anticipate the need for care in the future because of physical or mental decline, an estate planning attorney with knowledge of elder law can advise you about estate plan documents you should have in place and about your options for care and payment. Make it a priority to become educated about your options and work with an attorney to make a plan for the future.

You are getting married or divorced. Marriage and divorce both impact your existing estate plan and necessitate changes to your documents. If you do not have an estate plan in place, these events provide a good reason to plan. An attorney can also help you review asset ownership and beneficiary designations to ensure a new (or ex-) spouse is provided for (or not) as appropriate. Prior to marriage, an estate planning attorney will help you determine whether a prenuptial agreement is appropriate. These agreements can protect assets owned prior to marriage (such as an interest in a family business or vacation home) or assets that are inherited during the marriage in the event of death or divorce. Prenuptial agreements are also important in second marriages to protect assets for children from a prior marriage.

You have a spouse, child, grandchild or other beneficiary who has a disability. If you wish to leave assets to a disabled individual you need to take special care with your estate plan documents. Leaving an inheritance to a disabled beneficiary may cause a loss of benefits, including medical benefits. Leaving an inheritance in a properly drafted Trust can preserve eligibility for benefits and protect assets for the benefit of the disabled beneficiary.

You have not reviewed your plan in a while. If you have a Will, Trust or other estate plan documents, it is important to keep your plan current. If it has been more than five years since you have met with an attorney to review your plan, take the time to do so. A few simple amendments to your documents may be all you need to bring your plan up to date. Even if more significant changes are needed, make those changes to ensure your plan will work as you intend, save time and expense, and minimize taxes — both for your benefit and for the beneficiaries of your estate.

You can find more information about these topics, including many articles on estate planning and elder law at www.ssbllc.com.

Attorney Maria Baler is an estate planning and elder law attorney and a partner with the Dedham law firm of Samuel, Sayward & Baler LLC. 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 2017

Happy Anniversary to the Massachusetts Estate Tax!

January 19, 2017 by Attorney Maria Baler

Maria_144px As a follow-up to my July 2016 blog commemorating the 100th anniversary of the federal estate tax, and as promised in that post (and better late than never), we are recognizing the less-significant-but-still-worth-commemorating 40th anniversary of the Massachusetts Estate Tax.

The Massachusetts estate tax, like the federal estate tax, is a transfer tax that taxes the value of a decedent’s estate before the estate assets are passed on to the heirs who receive assets from the estate.

Before the current version of the Massachusetts estate tax (enacted in 2003), the tax was a so-called “sponge” tax, calculated based on the credit provided by the federal estate tax for estate tax paid to a state. When the federal government began phasing out its estate tax in 2001, Massachusetts “decoupled” from the federal estate tax, and implemented its current system of computing a separate state estate tax equal to the federal credit for state death taxes as it existed on December 31, 2000.

So when does a Massachusetts estate tax return have to be filed? The estate of every resident of Massachusetts who dies with an estate valued at $1 million or more must file a Massachusetts Estate Tax return within nine months of the date of death. If you are not a Massachusetts resident but own real estate in Massachusetts, you must also pay an estate tax to the Commonwealth at your death, assuming the total value of your estate is over $1 million.

What is an “estate”? In the estate tax world, your “estate” consists of any asset you own or control. So, for example, your home, your bank accounts, your investment accounts, your IRAs or 401k, your car, and your life insurance (if it is owned by you) are all assets that together constitute your “estate” and are countable when determining if your estate is worth more than $1 million at the time of your death.

If you have to file a return, will you have to pay tax? The answer is “it depends.” No matter how valuable your estate, if you leave your assets all to your spouse or all to charity, you will not have to pay any estate tax. Assets left to anyone else are subject to estate tax, which must be paid within nine months of the date of death. Unlike the federal estate tax, if the estate meets the $1 million filing threshold, the full value of the estate (less a $60,000 exemption) is subject to Massachusetts estate tax, not just the amount in excess of $1 million. The estate tax is computed on the value of the taxable estate (the value of your assets less deductions for funeral expenses, administrative expenses, debts, and assets passing to charity or a spouse), with rates ranging from 0.8% to 16% for estates in excess of $10 million.

If taxable gifts (gifts made in excess of the gift tax annual exclusion) are made during a deceased person’s lifetime, the total taxable gifts are added to the value of the estate on the date of death to determine whether or not the value of the estate is in excess of the $1 million filing threshold and an estate tax return must be filed. However, the estate tax is computed only on the value of the assets owned by the deceased on the date of death.

The Massachusetts Department of Revenue chose to celebrate the Massachusetts estate tax’s 40th anniversary by implementing the electronic filing of estate tax returns. An exciting development for those of us in the estate tax world, or at least it promises to be once the kinks are worked out!

If you have questions about the Massachusetts estate tax, whether your heirs may have to pay tax, how much they may have to pay, and what can be done to reduce the estate tax owed, call our office and schedule a time to meet with one of our estate planning attorneys. Estate tax planning is one of our favorite things to do!

January 2017