Massachusetts Estate Planning & Asset Protection Blog

Times Are Changing, So Are Tax Laws

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Aug 26, 2014

The Tax Game Has Changed | Massachusetts Estate Planning Attorney


Tax planning, estate tax, trust, congress


The Old Ways Don’t Work Anymore

For years, estate planners have done what is considered traditional estate planning. They drafted plans primarily concerned with minimizing future estate tax liability and gave minimal attention to income tax consequences.

This was perfectly fine years ago when the estate tax was much more severe than the potential for income tax. This was attributable to relatively high estate tax rates, low estate tax exemption that was not indexed for inflation, and comparatively low capital gains rates.

However, Congress has tinkered with the tax system in a huge way. Accordingly, the income tax impact of estate planning is taking on greater significance, especially for Massachusetts residents.


The Tax Man Cometh

More attention shall now be directed toward the importance of income tax basis considerations in estate planning due to the narrowing between the estate tax rates and the income tax rates. In fact, in most estates worth less than $5.34 million, estate taxes are no longer an issue. Now, income taxes loom large, primarily because of the lack of attention on the income tax basis (i.e. cost or adjusted basis) of capital assets. Also state estate taxes have become critically important because of the lower $1 million threshold for estate taxes in states like Massachusetts.


Failing to Update Could Cost You

The bad news for most middle-class taxpayers is that for years they've been fed a steady diet of estate tax minimizing wills and trusts. Worse yet, they hang onto outdated documents for many years, thinking they are done with their estate planning and not wanting to be bothered. Sadly, these old documents will no longer serve their intended purpose of estate tax minimization. A major problem is also created when federal estate tax minimization plans, unless they are updated, will cause a completely avoidable Massachusetts estate tax for a married couple. While there may be no federal estate tax savings with these documents, because very few middle-class taxpayers will ever pay estate tax, the documents will increase income taxes for their heirs upon sale of appreciated assets. Moreover in Massachusetts, there may not only be a completely avoidable estate tax on an additional 1 million dollars, but it may also trigger a large, completely avoidable Massachusetts estate tax on the first death.


What to Do About a Completely Avoidable Massachusetts Estate Tax

Bottom line:  the game starts anew. Let's focus on income tax minimization for most taxpayers and forget about estate tax minimization. Unless your estate is worth more than $5.34 million, your biggest risk is Massachusetts estate tax as well as overpaying income taxes due to inattention to income tax basis planning in your wills and trusts.  Don't make that mistake. Review your documents today so that you eliminate these lurking tax problems


At the Estate Planning & Asset Protection Law Center, we provide a unified education and counseling process which uses a unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Nursing Home Costs, Mistakes, Massacusetts Estate Tax, taxes, social security, massachusetts estate planning strategies, trusts, Nursing Home, tax liability, Massachusetts estate tax, tax exemption, transfer of assets, Tax on IRAs, Tax Savings, tax deductions, tax reform, trust, tax

How To Craft, Revise and Maintain A Well-Thought-Out Estate Plan

Posted by Dennis Sullivan & Associates on Wed, Mar 09, 2011

"Because there is no April 15th for Estate Planning and Asset Protection, many people try to procrastinate or avoid it.  However, there can be grave consequences to neglecting it." --Dennis Sullivan, Esq. CPA, LLM

It certainly is understandable that no one enjoys a conversation about death – especially their own! And, with the estate tax exemption now set at $5 million for an individual and $10 million for a couple, many people may believe they have no reason to consult an attorney about their estate planning.

Massachusetts will assess a tax on estates over $1 million. Without proper planning a married couple will have only $1 million between them.  See a lawer to be sure that you and your spouse get the $2 million exemption available to you.

Also, Massachusetts clients and taxpayers need to watch out for estate plans created based on maximum federal applicable exclusion planning, common for many estate plans prior to 2003. Now with the $5 million federal exempt amount, there could be a COMPLETELY AVOIDABLE Massachusetts estate tax triggered at the first death. The cost to your spouse and family could be as much as $400,000 in unnecessary estate taxes.

But avoiding the topic of estate planning can mean unnecessary expense, confusion and conflict.  Why do you need an estate plan? A comprehensive estate plan ensures that your estate is distributed according to your wishes, provides protection for you in the event of your own disability, and allows you to plan for your family. 

Can I write my own will? You certainly can; however, improperly drafted or last-minute,wills frequently are contested and invalidated in court. Massachusetts does NOT recognize handwritten wills. If you don’t know what you’re doing, the outcome could be much different than you expect. 

What should every estate plan have?  The list should include a will, powers of attorney for financial affairs and for health care, and a living will along with appropriate trusts.  Trusts not only reduce estate taxes, but they also help their heirs to avoid probate. Trusts also can shield assets from nursing home and medical expenses, loss due to unforeseen circumstances, such as bankruptcy, divorce or lawsuits of your heirs.

Two common mistakes people make in their estate planning: failure to plan for their personal effects and failure to review and update their plans over time. You can learn more about comprehensive estate planning by attending one of our Trust, Estate & Asset Protection Workshops and also by downloading our Unique Self-Guided 19-Point Trust, Estate & Asset Protection Legal Guide on our website.  Once you become a client, we have a Lifetime Protection Program to ensure that your planning stays up to date with the changes in law, fincial, health and family situations.

Tags: Protective Trusts, Estate Planning, Estate Planning, Mistakes, HIPAA, health care proxy, estate tax, estate tax savings, Massacusetts Estate Tax, living will, massachusetts estate planning strategies, trusts, power of attorney, Massachusetts estate tax, will, New estate tax law

Does Estate Planning with Legal Zoom Really Save Your Family Money?

Posted by Dennis Sullivan & Associates on Thu, Apr 29, 2010

Sometimes we get calls from families concerned about making sure their planning is cost-effective. They will ask us about self-help online planning like Legal Zoom.  The commercial advertising promises to put together estate planning documents in fifteen minutes or less for minimal fees. It sounds pretty good.  However, if you care about your family, please read on to learn about the "other" costs you may incur.

A colleague Attorney, Dennis Brislawn, blogged about his own opportunity to review legal zoom documents ‘prepared’ by a non-Attorney friend. The documents he saw were simple, clean and looked very legal. Looked, of course, is the operative word!  
What he saw was a document that didn’t address a number of critical issues:

1.    Protecting children and grandchildren’s inheritances from divorce, bankruptcy and other creditors;
2.    Guidance for inheritances to be received by the couple;
3.    Coordinated planning to help the family during their lifetime, including planning for investments, retirement and insurance. Without planning, these issues can trigger significant income and estate tax issues, sometimes as high as 70%!

Massachusetts will

In addition to loss of inheritance by children and grandchildren and significant tax problems that are created for the unwary-- take another look at the website, and in the fine print you’ll find a disclaimer about Legal Zoom documents:

“The information provided in this site is not legal advice, but general information on legal issues commonly encountered. LegalZoom's Legal Document Service is not a law firm and is not a substitute for an attorney or law firm. LegalZoom cannot provide legal advice and can only provide self-help services at your specific direction. Please note that your access to and use of is subject to additional terms and conditions.”

What does all of that mean? Well, for one thing, you are taking responsibility for understanding all of your planning, including any tax issues, disability issues, Medicaid or estate planning and how it will effect you, today and down the road. Would you really want to create nursing home poverty for yourself or your parents? You could have a major problem and you will never know because they will not tell you about it. Rather Legal Zoom instructs you to get help from a specialist Attorney. If you ever have a problem, Legal Zoom will take no responsibility. They won’t be there if you or a loved one needs nursing home care or if your fifteen minute estate plan is litigated in probate court or audited by the IRS.

A Legal Zoom fifteen minute word processor plan won’t:

1.    Protect your assets from increasing medical and nursing home costs;
2.    Protect your children and grandchildren’s inheritances from lawsuits, divorces and other creditors; or
3.    Let you know when tax laws and circumstances change and your plan must be updated.

Educate Yourself - Learn 19 Imporant Points to Consider

But let us let you in on a secret—a large share of revenue for estate planning and elder law attorneys comes from correcting errors or redoing unsuitable planning, or even litigating estates when it is too late to correct things. In that sense, legal zoom may cost your family more in the long run than they can afford. You and your family deserve education and guidance to help you protect what’s important to you.

Your family and life savings are too important for shortcuts! After reviewing hundreds of trusts created by both legal software and other law firms, we created a 19-Point Trust, Estate and Asset Protection review process. Visit us at to see how your plan stacks up.

If you would like to learn more about the 19-Point Review, attend an upcoming Trust, Estate and Asset Protection workshop.  To register, call 800-964-4295 or visit to sign up online. We will also review our unique family lifetime protection program to make sure your plan works to protect you, your spouse, your home and lifesavings and leaves a protected legacy for your family. 

Tags: Estate Planning, Mistakes, estate tax savings, massachusetts estate planning strategies, trusts, will

The Nine Biggest Estate And Retirement Planning Mistakes

Posted by Dennis Sullivan & Associates on Fri, Mar 05, 2010


Some people have suggested waiting to see how Congress deals with the estate tax before doing any planning, but waiting to plan is a big mistake! Whether or not your estate is large enough to be concerned with a Massachusetts or Federal Estate Tax, many are very worried about how they will pay for nursing home care if they need it!  

According to a recent survey, for most people, a family’s estate is consumed in the following order:

1.      Nursing homes;
2.      The IRS & Department of Revenue;
3.      Probate;
4.      Your children;
5.      Your grandchildren;
6.      A special person; and
7.      Your favorite charity.

What most people don’t realize is that you get to pick another order, but to do that you must act to get the results you want. If you are like most people, you want to preserve your home and life savings from the close to $150,000 per year nursing home costs for your spouse and plan a better legacy for your family.

Plan to protect and take control of your life savings call (800) 964 – 4295 for a free workshop or visit our

Estate Planning for Generations

Let’s assume for a moment that you have taken steps to protect yourself, your home and other assets so you do not leave all of your money to the nursing home during your lifetime. Given a choice, how would you like to leave 70% or more to the IRS and Department of Revenue? You may know something needs to be done, but making sure it is the right thing is critical! If you made some of the following mistakes, you too could leave a 70% inheritance to the IRS!

Here are nine major mistakes to avoid when planning to protect your retirement savings, including IRAs, from a Wall Street Journal article, “How Retirees Are Blowing Their Nest Eggs”:

1.      Failed Rollovers
If you let the 60-day deadline pass by it means you’ll pay income tax on the entire amount that year.  The alternative is to let your assets grow tax-free until you make withdrawals.

2.      Roth Conversion Confusion
Want a conversion? Take control – don’t leave it up to your children.

3.      Taking Too Little or Too Much
Avoid penalties by planning ahead for withdrawals from qualified retirement accounts.

4.      Missing the Low-Tax Window
If your tax bracket drops after you stop earning a regular paycheck, and you expect your tax rate to increase again when you start taking mandatory IRA withdrawals, it may make sense to withdraw from your account to avoid higher taxes in the future.

5.      Losing Out on the Stretch
Be sure to stretch out withdrawals from inherited IRAs over your own life expectancy.

6.      Naming No Beneficiary, or the Wrong One
Without naming a beneficiary, anyone who inherits the money from the IRA will lose out on decade’s worth of potential tax-free growth.

7.      Leaving Your IRA to a Trust
You can leave an IRA to a separate trust set up to maximize the tax-free growth and provide protection from lawsuits, divorces and other creditors, but you must make sure that the trust that is the beneficiary is set up correctly to provide for these benefits.

8.      Overlooking the Estate-Tax Break
When you inherit an IRA on which estate taxes have been paid, you’re entitled to a little known tax deduction called Income in Respect of a Decedent, or IRD.

9.      Not Protecting Your IRA from Long Term Care Costs
Leave your IRA to a protective trust to protect the account for your children and grandchildren if your spouse ever needs assistance paying for long term care costs.

To learn more about your opportunities and avoid the mistake of procrastination and the top nine mistakes of estate and retirement planning, act now. Please visit us at to sign up for a complimentary workshop or call (800) 964-4295 (24hrs/7 days a week). You can take care of both protecting your assets and saving taxes, but only if you take control of the order of distribution of your life savings and act to protect your spouse, home, life savings and legacy!


Tags: Nursing Home Costs, Mistakes, Elder Law, roth conversions, Tax on IRAs

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