Massachusetts Estate Planning & Asset Protection Blog

The Importance of a Well Crafted Power of Attorney

Posted by Dennis Sullivan & Associates on Fri, Jan 23, 2015

The Importance of a Well Crafted POA | Massachusetts Estate Planning Attorney

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As we always tell our clients, a power of attorney is just as important, if not more important to you, as your will.  Yet most people pay far more attention to the drafting of their will and give their power of attorney (POA) little or no thought. 

A last will and testament establishes your desires as to whom and in what manner you choose to leave my possessions and assets when you die.  While meaningful to you, it is more relevant to the persons receiving those assets after you’re gone.  A power of attorney, however, is critical to your well-being while you are still alive. The power of attorney is used at a time when someone is at their most vulnerable, when you can no longer take care of your own affairs and need the assistance of the person or persons who has been designated as your agent(s).

However, setting up a power of attorney has always been an afterthought for many people.  Before computers, a common response to the need for a POA was to pick up a preprinted document from the stationery store, today’s version is to print the document from a website found on the internet, such as LegalZoom.com. Both usually contain language no more specific than “I give my agent the authority to do anything that I can do as a principal”. In fact the fine print on the site informs you that “We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.”  If that is the case, how could you rely on their “non-legal” documents to take care of yourself and your family?

 Even when an attorney drafts the document, many will use a one size fits all approach that can often be detrimental to the client.  I think that the ease with which this document can be created has led to the myth of its low value in the eyes of the general public. Nothing could be further from the truth.

Here is a recent situation that we faced in our office that serves as an example to highlight the importance of the document and how critical a role it plays in achieving our client’s goals and objectives. 

 

We had drafted the client’s power of attorney.  It contains language permitting the agent “to enter any safe deposit box or vault on which [the principal is] a signer and withdraw or add to its contents”.  The agent wanted to close the account and surrender the box.

The bank employee reading the clause concluded that this power did not include the ability to close out the box (although he agreed the agent could close the bank account).  This is a situation we have come across frequently, an evaluation of the document limited to the express language, rather than examining the document as a whole.  Courts have reasoned that the whole document must be examined, and each clause should be used to interpret the others.

If the agent has the power to remove and add contents to the safe deposit box then he has the power to “deal with” the box and therefore has an implied power to open and close the box.  We could have had relied in this argument with the bank, however, there was another paragraph in the document that permitted the agent to conduct any banking transaction authorized by a specifically referenced Massachusetts statute.  I pointed out to the bank employee the specific language in that law authorizing the agent to open and closed safe deposit boxes.  What could have been a long, drawn-out problem was solved quickly through a carefully worded power of attorney.

In our 27 years helping people and their families, I have had numerous instances in which third parties, usually financial institutions, question the language in our documents.  As a result, we are constantly updating them.  The take away here it to make sure you have a detailed, well drafted power of attorney.  Don’t opt for the vague, 2 page, cookie-cutter documents printed off the internet.  It could easily be one of the most costly mistakes you ever make.

 

For more on the mistakes and oversights that can affect people and their families, take a look at our new book: The 10 Biggest Estate Planning and Asset Protection Mistakes People Make and How to Avoid Them! 2nd edition, now including the special bonus chapter, The Biggest Long Term Care Planning Oversights and Opportunities for Long Term Care

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our 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: probate, durable power of attorney, trusts, power of attorney, transfer of assets, Wills

A Tale of Two Plans

Posted by Dennis Sullivan & Associates on Mon, Nov 24, 2014

A Tale of Two Plans | Massachusetts Elder Law Attorney

advancedirectivepapers

Lifestyles of the Rich and Famous

Estate planning attorneys and their clients alike are interested in the lives of the rich and famous. From star athletes to established Hollywood super stars to up-and-coming musicians; we’re all guilty of reading up on other people. There is one thing that estate planning attorneys know that their clients probably don’t: that the type of estate plan you have dictates just how much information about your life, health and financial affairs will be publicly available about you after you pass on.

Everyone Will Know

George Washington’s Will is available to anyone who walks into the Fairfax County, Virginia, courthouse, or with a short search, anyone with an internet connection. It’s not just the Wills of historical or political figures that are available either.

If someone dies with only a Will in place, it is very easy to find out all about their assets and final wishes. Except in the rare instance of a local law to the contrary, the Will of every person (who died with one admitted to probate) is available for inspection in the locale in which they resided at death. The assets controlled by the Will are inventoried and that inventory is also a public record.

Unless You Have a Trust

While some clients may not care about privacy, others would be startled to think that a listing of their assets would be available to their nosy neighbors, distant relatives, and anyone trolling through public records.

With a trust, the terms are private and your assets are private. Some clients may not care about costs or delays their heirs may encounter after their death, however, many of those will care about their ongoing privacy as well as their families. This can be especially useful in preventing predatory lawsuits and leaving assets to someone who is going through hard times who may not wish to advertise an unexpected influx of cash.

Two Different Approaches

Recently, the privacy of differing plans was illustrated by the unfortunate deaths of actress Lauren Bacall and comedian Joan Rivers. Bacall’s estate plan utilized a Will as the primary vehicle, while Rivers’ plan used a Trust as the primary vehicle for her assets. By using a Trust to pass on her assets to her heirs, Rivers plan and the extent of her assets are not available for anyone but her attorney and her those she left her assets to. Bacall’s plan on the other hand, left her instructions, plans and assets laid bare for anyone with an interest to see. Her assets will be inventoried and that inventory, along with her Will, shall be available in the “Surrogate’s Court” in Manhattan, where she lived.

Research shows that 86% of trust & estate plans fail! In Our Newest book we reveal what the ten biggest estate and asset protection mistakes are and how to avoid them. Learn where problems may exist in your current plan, and where there may be hidden opportunities in your plan to protect your home, spouse family and life savings. Click here for more information.

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our 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 for more information on  Estate Planning and Asset Protection

Tags: Estate Planning, probate, trusts, Wills, privacy

A Lack of understanding with Wills

Posted by Dennis Sullivan & Associates on Fri, Nov 21, 2014

A Lack of Understanding with Wills | Massachusetts Estate Planning Attorney

6.18.12

 

A Common Misconception

Many people think a Will, will control how their assets will pass after they’re gone, yet most assets today pass outside of Wills. For example, assets held in joint tenancy pass to the surviving joint tenant. If there is a surviving named beneficiary (as there are on retirement accounts, POD, TOD and life insurance plans), then those assets held as such will pass to the surviving named beneficiary. Your other assets that do not have those designations pass pursuant to your Will.

 

Example A

Joe’s Will left his estate equally to his four children with each getting 25%, however, Joe named his oldest child, Todd, as the sole beneficiary on his life insurance policy. As a result, Todd got all of the life insurance and 1/4 of the Probate estate. The other three children each get 1/4 of Joe’s Probate estate, but none of his life insurance. Todd refused to share the money from the insurance policy, leading to bitterness and estrangement from his siblings. Joe had made the all too common mistake of assuming that his Will would control everything, and as a result his children were left confused and angry by his poor planning.

 

Example B

When she was younger and still single, Jill named her sister Mary as the beneficiary on her retirement plan at work, and her life insurance policy. Jill and Mary purchased a first home with joint tenancy; both sisters lived in and shared the house. A few years later, the sisters had a falling out and Jill got married. Subsequently Jill changed her Will to leave everything to her husband.

However, because Jill never changed her beneficiary designations on her retirement plan or on her life insurance, or the joint tenancy on the house she and her sister had purchased; the bulk of her estate passed to Mary on Jill's death and not to Jill's husband. An additional complication came in when Jill's husband sued Jill's sister to assert a spousal community property interest in Jill's retirement and the house.

 

The Solution

These problems, and many others, can be avoided by properly using a Living Trust as the basis of your estate plan. Aside from the greater control a Living Trust provides, greater privacy, more flexibility and it is harder to challenge since it avoids the ordeal of probate. While a Living Trust may not be the best solution to every estate planning problem, it is a wonderful tool to have at hand. As always, we recommend consulting an estate planning professional when drafting your estate plan and documents. We also highly recommend updating these documents at least every three years to make sure that your assets will be going to the right people in the right amounts.

 

Research shows that 86% of trust & estate plans fail! In Our Newest book we reveal what the ten biggest estate and asset protection mistakes are and how to avoid them. Learn where problems may exist in your current plan, and where there may be hidden opportunities in your plan to protect your home, spouse family and life savings. Click here for more information.

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our 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: Estate Planning, probate, trusts, transfer of assets, Wills, joint tenancy

Ten Estate Planning Success Tips

Posted by Dennis Sullivan & Associates on Mon, Oct 20, 2014

Ten Estate Planning Success Tips

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Have You Planned for the Future Yet?

So you’re worried about the future, you want to make sure that not only your spouse, family and property is taken care of when you pass, but you want to make sure you’re taken care of while you’re still here. There is a lot of information out there to sort through, some of it is conflicting, and all of it is confusing. Here are some basic tips to help you get started: 

  1. Update your documents regularly. We honestly cannot stress this one enough. Keep your legal residence address, marital status, children and their potential guardians, and other documents updated. 
  1. Keep track of beneficiaries for all of your IRAs, qualified plans and insurance policies. Do you know who your beneficiaries are for these assets? If you don't, they may be going to someone you no longer wish to receive them, such as an ex-spouse. You can easily change the name of the person who will receive their benefits by filling out a form and submitting it. 
  1. Maximize the liquidity of your estate. Liquidity is defined as the ability to quickly turn assets into cash. Without sufficient cash to pay taxes, funeral, and other expenses, your family may have to sell illiquid assets - such as a family business or other property - at an inopportune time, and for less than full value. 
  1. Maintain an Appropriate Mix of Investment Risk. It's not the best idea to have too much money allocated to risk in stocks or mutual funds, as you age. Over time, more risky investments should be moved into safe and stable investments such as Annuities to ensure you are leaving an inheritance. 
  1. Name a dependable executor and/or trustee. Executors are called upon to collect assets, pay obligations, and distribute your assets. Your trustee must enforce all the provisions of any trusts you created. Choose someone who will have the knowledge, integrity and stamina to fulfil these obligations in the face of pressure from family members and lawsuits. 
  1. If you have minor children, consider naming one guardian for your minor children and another for the property you've left to support them, this will help ensure that your child will receive the full amount you’ve left them when they come of age. 
  1. Estate planning for your spouse or other sole survivor scenarios. If your net worth is high enough, your estate may be subject to taxes. A simple estate plan using trusts can save some individuals hundreds of thousands of dollars in estate taxes. 
  1. Make sure you are leaving the right assets to the right people with the right protections and provisions. If your child or other dependent has special needs or has been irresponsible with money in the past, you may not leave wish to leave them with the money to handle on their own. Make sure any minors receive much needed management assistance along with the cash. 
  1. Planning is even more difficult for business owners, who must plan for the succession and/or the buy-out of their business after they pass. Make sure any preparations that are needed for a smooth transition are taken care of. 
  2. Consult a professional. This may seem obvious, but we do have to say it. Estate Planning is a complex and difficult subject for most people to take care of on their own, and simple mistakes can cost you and your family tens or even hundreds of thousands of dollars. 

But Wait, There’s More!

Got all those taken care of? Well don’t relax just yet; there are still dozens of other questions you need to take care of before you’re done. Have you protected your assets from all unnecessary taxes? Have you established trusts that will be safe from predatory lawsuits? Are your documents up to date with the ongoing changes in laws, policies and eligibilities? Have you made sure to secure a portion of your assets in case you need nursing home care or are you planning to try and give everything away beforehand? These are things you need to take care of before your planning is truly complete.

 

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our 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 for more information on  Estate Planning and Asset Protection

Tags: Estate Planning, probate, trusts, protection, Wills, Estate Planning Tip, 2014

Massachusetts Elder Law Attorney | What Happens To Your Pet After You Are Gone?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Oct 22, 2012

What happens to your pet after you are gone? This is a frequently asked question amongst our clients. Just last week, one client asked us what would happen to their dog, Sophie, when they pass away. We discussed setting up a pet trust and choosing a pet guardian to ensure that Sophie would be provided for. Please take the time to read the following article by Deborah Jacobs about the several ways you can provide for your beloved pet, even after you are gone.

If You Love Your Dog (Or Cat or Gerbil), Read This

by Deborah Jacobs

Link:Forbes.com

pet trust, guardian, elder law, Massachusetts

Whether your pet is a rescue you adopted for nothing or a purebred with a street value of many thousands, you can’t put a price tag on what it’s worth to you. So you ought to take steps to provide for this family member after you are gone–just as you would for any other. There are a couple of ways to do this, which can be used alone or in combination with each other.

Set up a trust. The tobacco heiress Doris Duke, who died in 1993, included a paragraph in her will with detailed instructions about who should become the owner of whatever dog lived at her Beverly Hills home when she died (her first choice was the caretaker of the house). Duke also created a $100,000 trust to cover her pet’s food, medical bills and other expenses.

More famously, Leona Helmsley set up a $12 million trust to benefit her dog, Trouble. After Helmsley died in 2007, two of her grandchildren, whom she had disinherited, challenged the arrangement. They persuaded the court to reduce the trust to $2 million and walked away with $3 million apiece. The other $4 million went to a charitable trust that Helmsley and her husband Harry had set up. (Trouble died last year.)

Such trusts (funded with much smaller sums) have become increasingly popular, and can be done in all states, says Gerry W. Beyer, a professor at Texas Tech University School of Law in Lubbock, TX and co-author of the book, “Fat Cats And Lucky Dogs: How To Leave (Some Of) Your Estate To Your Pet.”

Creating and administering pet trusts involves many of the same issues that arise with other types of trusts, including how to fund the trust, whether it should take effect while you are still alive (for example, if you are no longer able to care for your pet) and whom to choose as trustee. You will also want to identify the caregiver (include alternates in case the person you have in mind cannot do it), ideally someone other than the trustee. Include care instructions, and indicate what should happen to the funds after your pet dies.

Choose a pet guardian. A simpler approach is to designate in your will the person to care for your pet, and leave that individual enough money to carry out the responsibility. This raises two potential pitfalls: the amount could be subject to estate tax and there’s no legal mechanism for making sure things go as you planned. Nor is there any guarantee that the person will want your pet or be able to care for it when time comes.

In response to this problem, a growing number of for-profit and not-for-profit pet guardian programs have sprung up around the country. Beyer, who keeps a list of about 75 organizations providing animal care after an owner’s death but has not vetted the programs, says that some are shelters or re-homing organizations that are specific to certain types of animals – such as birds, farm animals or dogs. Among the best are those run by university veterinary schools or connected with local humane societies, he says.

Pet guardian programs are terrific for people who don’t have a specific person in mind or need to name an alternate on their pet trust if the caregivers they have listed are unable or unwilling to serve. Or, you can combine the two concepts, and put the animal care organization in charge of your pet’s care, while naming the trustee to oversee it and control the money.

Guardian programs are also great if you have a pet like a bird or a tortoise that has long life expectancy–longer than any human beings whom you trust, Beyer says. These programs might also be well suited to finding a home for exotic pets like pigs and llamas.

Two years ago, for example, the 100-year-old Seattle Humane Society set up a pet Guardian program known informally as “Puppies In Probate.” (Under Washington law, animals are treated as property, so this reference to the process by which a will is submitted for the court’s approval before assets are distributed is particularly apt. ) The idea came up after donors who were planning to benefit the Humane Society through their estate plans inquired about the possibility of a program that would help find a new home for their pets. In addition to dogs and cats, the program covers “pocket pets,” such as bunnies, gerbils, and mice), says David Loewe, the CEO.

Several months ago, Teri Persen, 72, enrolled Button–her 12-year-old Coton de Tulear. Persen, who lives alone and whose family lives out of the area, says she didn’t want to burden her friends. “I see too many people stuck with animals – not knowing what to do, feeling guilty if they tried to find another home or turned it into a shelter,” she says. “I didn’t want to put anyone in that position.”

So far more than 20 other people have signed up for the Seattle program, and paid the $1,000 enrollment fee, though none have met their demise. But the program is an extension of a service the Humane Society already provides, finding homes for strays and abandoned pets. Depending on their medical condition and potential behavior issues, animals may either go directly from the shelter into a new home, or first pass through foster care for 30-60 days with an experienced animal lover who is especially sensitive to their needs, Loewe says.

In choosing a facility, here are issues to consider:

What’s the rep? Visit the facility, just as you would if you were putting a relative in a nursing home. Ask the local humane society about the organization’s reputation.Check for complaints on the Internet and through the local Better Business Bureau.

What will it cost? Some programs require you to create a mini endowment, either during your life or through your estate plan. Programs that are set up to take animals from around the country tend to charge more.

What are the screening criteria? Your pet may have a special place in your heart, but if he is a furniture scratcher, or sometimes has an accident in the house, that could work against him in finding a new home.

Is it a fit for your pet? When you pass away, you’ve turned over responsibility for your pet. You want to make sure that the organization’s mission fits with what your animal needs.

What’s the track record? Your goal here is to find out what percentage of animals are placed into a new home and what happens to those that aren’t. (Chances are they will be euthanized.) Loewe recommends you ask not only, “What is your save rate?”(the number of animals that go from intake to adoption) but also “What is your save rate philosophy?” The answers will give you some idea of why an animal might not be adoptable at that shelter — for example, because of a medical or behavioral issue.

One final piece of advice: In addition to expressing your wishes in estate planning documents, communicate them to friends, family and financial advisors. Otherwise, by the time they locate the relevant documents, it may already be too late to save Fluffy or Rover.

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions

We developed our Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide so you can learn where problems may exist in your planning as well as opportunities for improvement and how to implement a plan to protect your spouse, home, family, and life savings. 

Click Here to Download our Trust, Estate, & Asset Protection  Legal Guide

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

 

Tags: will, Estate Planning, probate, asset protection, estate, Massachusetts, Attorney, trust, pet, pets, guardian

Massachusetts Estate Planning Attorney | 10 Detrimental Estate Planning Myths

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Oct 10, 2012

There are a variety of misconceptions associated with estate planning, which unfortunately often lead to detrimental mistakes. Please take the time to read “10 Common Estate Planning Myths That Can Be Detrimental to Your Family”, in which Erik Carter of Forbes.com discusses estate planning myths that often keep people from initiating an estate plan that could protect their home, spouse, life savings and legacy.

10 Common Estate Planning Myths That Can Be Detrimental to Your Family

estate plan, estate planning, Massachusetts

1) Estate planning is just for the wealthy. This myth comes from the focus of so many attorneys and financial advisers on the estate tax, which may not be an issue this year until your estate surpasses $5,120,000, an amount that most of us would characterize as pretty well-off, if not downright rich. This focus makes sense for estate planning professionals since they make so much more money dealing with that issue, but estate planning is about so much more than that. It’s also about making sure that your finances are taken care of if you’re incapacitated, that decisions about your health care are carried out the way you’d like even if you’re not able to make them, and that your children and other heirs are taken care of when that time eventually comes. That’s why estate planning isn’t just for the Donald Trumps of the world. Estate planning is for anyone who may become seriously ill or pass away. In other words, it’s for everyone.

2) I’m too young for estate planning. We never know when we might need estate planning and by then, it will be too late. For example, history is replete with the stories of celebrities who unfortunately died before creating a will, many of them at a relatively young age.

3) If I pass away without a will, the state will get my assets. If the last two myths can lead so many to inaction, it always amazes me that this myth hasn’t led to a boom in the will-making business. If you pass away without a will, each state will apply its “laws of intestacy” to determine who will get what. You can check out a site called mystatewill.com to see what that outcome may look like. If you don’t like it, get a will drafted. If you’re fine with it and have minor children, get a will anyway. That’s because the will also allows you to determine who would be the guardian of your children if that need should arise, which is probably not a decision you want a court to make.

4) If I have a will, I don’t have to worry about probate. This may be wishful thinking as probate can be a long and expensive process in which one or more courts decide who will inherit your assets. While a will provides the court with guidance on your wishes, it doesn’t actually avoid the process altogether. Since a will is public information, it can be easily contested in court, adding more time and cost. In addition, if you have real estate in more than one state, each property may have to go through probate in its respective state.

5) I need a lawyer to draft these documents. If your family and financial situation is relatively simple, you can draft many of these documents yourself at no or low cost. For health care decisions, you can get a health care directive from your hospital or download a state-specific form from the National Hospice and Palliative Care Organization here at no cost. Another resource for health care decisions is the Five Wishes, which is a popular, low-cost living will form made available from the non-profit Aging with Dignity organization. You can draft other legal documents like a power of attorney and a simple will for free at sites like DoYourOwnWill.com or for a relatively low cost at sites like LegalZoom and Nolo. Your employer may also offer these documents at no or low cost as an employee benefit.

6) I don’t need a lawyer at all. While these documents may cover most common situations, there may be a complicating issue warranting legal advice that you’re not even aware of. That’s why it’s still a good idea to at least run these documents by a qualified estate planning attorney, which may cost you less than having the attorney draft them all from scratch. You can search for an attorney by asking for referrals from family, friends, and other professionals, by using the lawyer referral service of your local bar association, or by searching the membership of organizations like the American Academy of Estate Planning Attorneys and the National Network of Estate Planning Attorneys.  Finally, don’t forget to ask your employer about any discounted legal services they may offer.

7) To avoid probate, you have to draft a trust. One area that you’re most likely to need an attorney is drafting a trust. Avoiding probate is one of the most common reasons people do this, but there may be cheaper and easier methods that may be sufficient for your needs. First, jointly owned property (like what you own with your spouse) generally passes to the other owner(s) without going through probate (unless it’s a “tenancy in common”). Second, life insurance, annuities, and anything in a retirement plan like a 401(k) and IRA avoids probate as long as there is at least one living beneficiary listed. Some states also allow you to avoid probate by adding beneficiaries to bank accounts with a “payable on death” registration and to brokerage accounts, real estate, and even vehicles with “transfer on death” registrations. You can see what’s available in your state here. Finally, each state has methods to speed up or even skip probate for “small estates,” which in some states can be quite large.

8) Trusts avoid estate tax.  Most trusts do not help you avoid estate taxes in and of themselves. However, if you’re worried about having a taxable estate, be sure to seek qualified legal advice (your nephew who just graduated from law school with a focus on criminal law doesn’t count) since certain trusts can be used as part of a strategy to reduce and even eliminate estate tax liability.

9) I don’t have enough money to worry about the estate tax. This may be true today, but if nothing changes, estates over $1 million are scheduled to be subject to a 55% estate tax starting next year. When you add in the value of your home, life insurance proceeds, and your retirement accounts, that $1 million may start looking a little too close for comfort.

10) I’ll have to pay a gift tax if I give someone over $13k per year. Anything (except for money paid directly to a medical or educational institution, charity, or to a 529 plan) over $13k that you give someone (other than your spouse) in a single year simply reduces your lifetime gift and estate tax exclusion amount (currently the $5,120,000 that’s falling to $1 million next year). Only after you use up the entire exclusion amount do you actually have to start paying anything. In other words, you’d have to give away quite a bit. That being said, you would still have to file a gift tax return and then keep track of how much you’ve reduced your lifetime exclusion amount by, so try to stay within the $13k annual exclusion amount just to avoid that hassle.

As you can see, there are lots of misconceptions out there about estate planning and understandably so as it can be complex, constantly changing, and removed from our everyday lives. Knowing the truth about these myths can help you avoid numerous mistakes."

At the Estate Planning & Asset Protection Law Center, we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We developed our Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide, so you can learn where problems may exist in your planning as well as opportunities for improvement and how to implement a plan to protect your spouse, home, family, and life savings. 

Click Here to Download our Trust, Estate, & Asset Protection  Legal Guide

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Tags: Estate Planning, probate, trusts, gift tax, estate tax, Massachusetts, lawyer, myths

Massachusetts Estate Planning Attorney | The Revocable Living Trust

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Sep 14, 2012

The Revocable Living Trust... how can it help you protect your assets?

At the Estate Planning and Asset Protection Law Center, we receive lots of questions about Revocable Living Trusts. Most people have heard about them, but very few actually understand what they are.revocable living trust, revocable trust, wills

A Revocable Living Trust is a legal document that includes instructions regarding what should be done with your assets when you die. Now, you may be thinking – isn’t that what a Will does? Yes, that’s exactly what a Will does; however, the key difference between a Will and a Trust is that a Trust prevents the assets in the Trust from being probated (tied up in the court system) at your death – a Will does not.

Revocable Living Trusts are not the only way to avoid probate. Jointly titling your assets or designating beneficiary designations are two other commonly-used methods of avoiding probate. While joint ownership and/or beneficiary designations may be appropriate in certain cases, there are other situations where having your assets in a Trust is the best course of action.

Trusts are not nearly as complicated as many people believe them to be. The first step is to meet with an attorney who is experienced in drafting Revocable Living Trusts and who can explain the process to you. You will become the Grantor of the Trust – meaning the Trust belongs to you and only you can make changes to your Trust. You will also need someone as Trustee to manage the assets in your Trust. You can be your own Trustee or designate someone else (a family member, friend, or corporate trustee like a bank) to serve as Trustee. Finally, you will designate beneficiaries—people or organizations who will receive your assets when you die.

This is where a Trust is extremely useful. For example, you may have three adult children and you may want all of your assets to pass in equal shares to the three kids upon your death, and should one of your children die before you do, you want his share to go to his kids. This can easily be accomplished with a Trust but would not be possible by naming the three kids as joint owners on your assets nor would it be possible by naming the three kids as beneficiaries.

This is just one example of the potential benefit of using a Revocable Living Trust to avoid probate. Revocable Living Trusts are also helpful should your desired method of distribution be more complicated. For instance, you may want a portion of your assets to go to your grandchildren, but perhaps they are all teenagers right now. You could set up your Trust such that your grandchildren won’t receive their share of the assets until they each reach the age of 25. On the other hand,  you may have an adult daughter with a developmental disability who won’t be able to manage her share of the assets upon your death. In that case, you may choose to have her share of the assets continue to be help by the Trust after your death so the Trustee can mange her share for her.

Situations like the two just mentioned can only be handled through a Revocable Living Trust –they cannot be accomplished through joint tenancy or beneficiary designations.

One last point –a Trust by itself is worthless unless the Trust has been funded. Once the Trust document is drawn up according to your wishes and has been signed, you must transfer your assets into the Trust. This means you will need to re-title your assets, such as real estate, stocks and CD’s in the name of your Trust.

Though having a Revocable Living Trust in place can help you simplify the administration of your financial affairs after your death and ensure your wishes are carried out, there are a lot of issues to consider when deciding if a Trust is right for you.

Research shows that 86% of trusts don’t work.  That’s why we developed our Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide, so you can learn where problems may exist in your planning as well as opportunities for improvement and how to implement a plan to protect your spouse, home, family, and life savings.

 

Click Here to Download our Trust, Estate, & Asset Protection  Legal Guide

 

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Tags: Estate Planning, probate, Elder Law, asset protection, Beneficiary, Massachusetts, revocable living trust, Wills

Review Your Estate Plans Regularly | Massachusetts Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Mon, Aug 13, 2012

There are many reasons why it is crucial to have your estate plan reviewed. A proper estate plan must be modified to account for legal and tax changes, as well as life changes.

"While certain basic principles have held true over the years, new strategies are constantly developed and legislative changes alter the law and how it is applied. Proper estate planning is rarely a one-time event. Besides accounting for legal changes, the plan must be modified to account for life changes — birth, death, divorce, finances and health" -- Bonnie Kraham, Elder Law Attorney

 

estateplan family

"There is a tendency to view elder law estate planning as a static process resulting in a permanent portfolio. Both are misconceptions.

While certain basic principles have held true over the years, new strategies are constantly developed and legislative changes alter the law and how it is applied. Proper estate planning is rarely a one-time event. Besides accounting for legal changes, the plan must be modified to account for life changes — birth, death, divorce, finances and health.

Also, when a plan is created poorly the first time, often by those without direct experience in this area of the law, it is often necessary for those more experienced in elder law estate planning to fix the "broken" plan.

One of the more common errors we see is a purported MAPT, a Medicaid asset protection trust, that does not comply with Medicaid law. Sometimes, such a trust states that the grantors (Mom and/or Dad) are also the trustees, which is not allowed. Other times, the trust gives the grantors access to principal in trust assets. This also is not allowed.

The common fix for a defective MAPT is creating a new one that follows the law: The grantors may not be trustees, and the grantors have a right to income only from trust assets. They have no right to principal. The downside of starting over is that the five-year "look-back" period must lapse before the assets in the trust are protected. However, the current situation must be assessed to determine if the new MAPT makes sense.

Even the best of plans may be obsolete by the time they are needed, sometimes many years later. At a minimum, an estate plan should be reviewed every three years to see if any life or law changes affect it.

Over time, clients may want to change their backup trustees or plan of asset distribution. They may wish to add inheritance trusts to keep assets in the family. They might wish to change from a revocable trust to the MAPT because they were unable or unwilling to obtain adequate long-term care insurance. Assets for married couples may have grown to more than $1 million and the couple may need estate tax protection.

A systematic updating approach allows the client to have a plan better suited to their current needs. Periodic review reduces the chance of broken elder law estate plans.

If you're competent, you can always update your plan by either amending a trust or signing a new will, power of attorney or health care proxy.

If you are not competent but have an elder law power of attorney with broad gifting powers, your agent under the power of attorney may create, amend or revoke a trust, and make other changes in your best interest, including protecting assets from nursing home costs. The goal is to avoid the last resort, which is a court proceeding to fix a broken plan, or worse, having a plan whose purpose is defeated."

Article Reference:
"Protecting Your Future: Revise Estate Plans Regularly to Meet Needs" by Bonnie Kraham
Link: http://www.recordonline.com

 

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

Research shows that 86% of trusts don’t work.  That’s why we developed our Unique Self-Guided 19-Point Trust, Estate, & Asset Protection Legal Guide, so you can learn where problems may exist in your planning as well as opportunities for improvement and how to implement a plan to protect your spouse, home, family, and life savings. 

 

Click Here to Download our Trust, Estate, & Asset Protection  Legal Guide

 

 We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com.

 

 

Tags: power of attorney, health care proxy, HIPAA, Estate Planning, probate, Protective Trusts, Nursing Home Costs, Elder Law, Medicaid, Nursing Homes, durable power of attorney, Beneficiary, elder care, seniors, estate, estate tax

Discuss These Estate Plan Topics With Your Children

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Jun 07, 2012

LINK: http://www.yoursmartmoneymoves.com/2012/05/31/what-four-estate-planning-things-parents-should-tell-their-children/

From Your Smart Money Moves (May 31, 2012) “What Four Estate Planning Things Parents Should Tell Their Children”

1. Who is the executor of the estate?  If you have a will set up, it’s important to tell which child or children are the executors of your estate.  Inevitably, they should know where is your will is stored.  It is in a safe deposit box?  It is somewhere at the house?  Or, what’s the name of the attorney that has the will on file?  As the executors of the estate, they’re the ones that are going to be responsible for the orderly administration of all of your assets.  So it’s important to at least let them know that they are the executors. Sometimes, kids don’t want this responsibility. This doesn’t mean you need to talk about how much money you have, but you should be able to let them know that they will be the ones that will be helping to administer the estate down the road.

Estate Planning, Family, Loved One, Asset Protection, Long-Term Care2. What’s the game plan for long term care?  This is one that parents will avoid all day long due to the challenging nature of the question.  Many parents that hit the age of 60, 65, or 70, may or may not have nursing home insurance.  If they don’t have long term care insurance, one of the questions they should be discussing with you is who might be available to help in the future.  Sometimes, the kids want to pay for long term care insurance if in fact the parents cannot afford it themselves.  You may think it’s your middle daughter or you may think it’s going to be your youngest son that will take care of you.  The kids may have thoughts themselves about who’s going to do what or worse yet they may have not talked at all.  So it’s important to have some discussion that if something happens your children have some idea of how the chain of command and responsibilities will roll down at that time.  I had an uncle of mine that unfortunately went into a nursing home and wiped out their entire financial situation.  This is a quality discussion to have as a family.

3. Advanced Medical Directive / Living Will?  You should talk to your kids about whether you have a living will or an advanced medical directive as part of your overall estate planning.  Letting your children know these types of things and if you are an organ donor can at least prepare your children for your wishes somewhere down the road.  You may be uncertain about your wishes if you had some tragic situation that actually put you on some sort of thing that’s keeping your life going.  And if you’ve already pre-made decisions about what’s going to happen, that would be an important thing to share with them.

4. Where Is Everything Located?  I’ve yet to see someone pass away without the family having to deal with some level of mystery on where documents, collectibles, or bank accounts are located.  With today’s technology, getting your finances organized in an electronic account aggregation type software or at least collecting all of your documents in one place with instructions on where everything is located will be important for your children.   Often, families can have a major struggle over personal possessions especially if one member of the family has more knowledge than another including brothers and sisters as well as children.  The goal of doing this isn’t to share your financial picture, but merely give your family a go to person or a location so things can be sorted out easily in the event of a premature death.

As a parent you don’t have to discuss money, your net worth, or what’s happening with your overall budget.  Many parents don’t want to be a burden on their children or they don’t want their children counting on a future inheritance.   Make sure to discuss with your kids these important points so at least they can take the opportunity to discuss and plan their own lives to best support you and your overall estate plan.

For more information on estate planning, asset protection, and elder law we invite you to attend one of our free Trust, Estate, and Asset Protection Workshops.  Register online at www.MASeniorWorkshop.com or by calling (800) 964-4295 (24/7).  At the Estate Planning & Asset Protection Law Center we help families protect what matters most: their spouse, home, and life savings, from the rising cost of medical and nursing home care.  Did you know that resaerch shows that 86% of estate plans DO NOT WORK.  Research conducted by a colleague with more than 30,000 clients demonstrated the need to review plans.  To help people evaluate the areas in which an existing plan meets a family’s goals and objectives and where significant problems may exist we have developed the 19-Point Trust, Estate & Asset Protection Guide

 

Tags: power of attorney, Estate Planning, probate, Estate Planning, asset protection, long term care, gifts, gift tax, family, Beneficiary, Estate Planning Tip, elder care, estate, executor, disinherit, estate tax, estate tax savings

Do You Know The Difference Between A Will and A Trust?

Posted by Dennis Sullivan & Associates on Thu, Jun 09, 2011

Most people are unclear as to the exact difference between these two legal documents and when you need one rather than the other.

A trust is a legal document frequently used in estate planning to distribute property or provide for a loved one after they have passed away. The trust will delineate how, what, and when a gift or property is to be distributed to a beneficiary.  Because a trust is a legal entity, it is subject to the rules outlined by your state to ensure that the trust is set up correctly, managed by a reliable individual, and properly funded.

A will is also a legal document that lists your wishes relative to  the distribution of your property and the care of any minor children after your death.  

Both a will and a living trust can be used to transfer assets, but each has unique uses. For example, a living trust can hold assets for your benefit while you are alive, as in the event you lose mental capacity.  A will only goes into effect after death, while a revocable living trust goes into effect as soon as it is signed. 

A will only governs the disposition of property owned in the deceased's sole name (including as a tenant in common), while a revocable living trust only handles the distribution of property that has been transferred into it. 

A will does nothing to plan for mental disability, while a disability plan can be written right into a revocable living trust. Property passing under the terms of a will goes through probate, while property passing under the terms of a revocable living trust avoids probate.

If you are concerned about people knowing your net worth or your beneficiaries, you might decide to transfer your assets through a trust, which, unlike a will, is not a public document. If a person wanted to leave assets to a domestic partner, for example, might use a revocable trust, because it is harder for family members to challenge a trust than a will.

A living trust is also useful if you own real estate in a state that is not your primary residence. Real estate is governed by the probate rules of the state in which it is situated. Unless the property is in a living trust, a Massachusetts resident, for example, who owns a home in Florida would need to probate the property separately there.

For more information about estate planning and the different documents at your disposal, watch our Estate & Retirement Planning videos or register online to attend one of our Trust, Estate and Asset Protection workshops.

Tags: will, Estate Planning, probate, trusts, asset protection

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