Massachusetts Estate Planning & Asset Protection Blog

Massachusetts Elder Law Lawyer | Considering Retirement or Retired?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Jan 30, 2013

Now Is the Time to Review Your Investments

In conducting research for our upcoming book, the Senior & Boomer’s Guide to Health Care Reform & Avoiding Nursing Home Poverty we learned that many people who are still working are giving retirement a second thought.

This is because they have to make big decisions about things such as Social Security and taxes - in advance. The world as we knew it has been turned upside-down in recent years, and this decision will affect the rest of your life.  Many are not sure they are ready - emotionally and financially - to retire.

If you're considering making the break, ask yourself these questions:


Because of the loss of our financial security-blankets in recent years, people are working longer. If you enjoy your job, maybe you should keep working.

Working will allow you more time to build up your savings for the day when you really do want to play golf instead of office politics, and more time to pay down your mortgage. Keep in mind, once you retire, it can be difficult to un-retire.


If you think it was hard staying on a budget during your working life, you ain't seen nuthin' yet! In fact, it often gets more expensive to live after you retire. You've got less coming in. But you'll probably be spending money on things you never had the time to spend it on before.

You'll probably be traveling more. Seeing more movies or ballgames. Playing more golf. Going out with friends more. And perhaps buying more "toys."

The Web can be a resource.  Retirement and financial planning websites like can help you figure out expenses that may end with retirement, and those that may begin.

Some experts encourage a trial run, by living on a projected "retirement budget" while you're still working. It's not a totally accurate method. But it might give you time to develop coping strategies.


There's a natural instinct to sign up when you turn 62. But "full-retirement age" isn't until 66...and, if you start early, your benefits will be reduced. So, if you've got a bit of a nest egg, consider waiting a while. And if you can wait until 70, your benefits will be even higher.

For those eligible at age 66, waiting just one year will result in monthly benefits equaling 108% of the previous amount. And waiting until 70 would generate 132% of the regular monthly benefit!  In fact, you can nearly double the amount you'll get at 62 if you can wait until 70.


Most of us speak with our accountant just once a year - at tax time. But don't consider retirement without discussing your finances with your accountant or asking us about how we can help you with retirement and tax planning.

Consider a financial planner, too. A big chunk of your IRA is going to Uncle Sam when you withdraw it.  Together, we can help you develop a strategy for your taxable and tax-sheltered accounts. And we can help you decide whether to convert to a Roth IRA, where withdrawals are tax-free, but conversions are not.


Many people especially those considering retirement or in retirement should review their portfolio with an eye towards age and risk tolerance, making sure they are in line with one and other.  Many people are sick of banks not only dropping their CD rates but their money market rates as well.  Many professionals are concerned that interest rates may be at a turning point and with the debt ceiling conversation being revisited, now may be a good time to review your investment options.  If you would like some information on safe investing for seniors, please let us know.

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 education and counseling 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 to learn more about what you can do to enhance the security of your family and legacy.

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Tags: Retirement, Estate Planning, Baby Boomers, Elder Law, Attorney, roth conversions, 401(k), income, senior, retirement plans

Who Will Make Your Financial Decisions If You No Longer Can?

Posted by Dennis Sullivan & Associates on Mon, May 02, 2011

One of the most important, and often overlooked, aspects of estate planning is preparing for the possibility of your own incapacity – whether through illness or accident, and whether temporary or permanent. In the event that you are unable to make financial decisions – such as filing your taxes, selling property, or making investment decisions – have you given someone the legal authority to act on your behalf?

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You may have heard of a Durable Power of Attorney (DPOA), which is a legal document giving another person (the attorney-in-fact) the legal right to do certain things (powers) for another. A DPOA may be very broad, or very limited and specific. For example, you could designate someone to act on your behalf to make investment decisions and work with your IRAs, including taking distributions from them, converting them, and creating new IRAs from your current accounts. Forbes recently suggested the following hypothetical example:

A terminally-ill father has decided that his gift to his children upon his passing will be the total of his IRA, converted to Roth and with the taxes paid from his other sources, so that the Roth account will be available tax-free to the children.  The remaining balance of those other sources (a taxable investment account) is to be distributed to his alma mater per his will.  He has discussed this with his children and his attorney, however, prior to enacting this maneuver he slips into a coma, which lasts until his passing. Now his children will still have the benefit of the IRA, but they will be paying tax on each distribution from the account during their lifetime(s). And since his will stipulates that the taxable investment account’s balance is to be distributed to his alma mater, those funds are not available to pay the tax on the IRA distributions. This isn’t what the father had hoped would occur at all.

A properly drafted DPOA could have averted the problem by designating someone to act on the father’s behalf to complete the procedure. Note that Powers of Attorney terminate upon the death of the maker and may terminate when the maker (principal) becomes incapacitated. When the intent is to designate a back-up decision-maker in the vent of incapacity, then a Durable Power of Attorney should be used.

You can learn more about Powers of Attorney by attending one of our free Estate Planning & Asset Protection Workshops; you might also want to download our Unique 19-Point Trust, Estate & Asset Protection Legal Guide.

Tags: Estate Planning, durable power of attorney, power of attorney, roth conversions, IRA

Roth IRA Conversions as a Planning Tool

Posted by Dennis Sullivan & Associates on Wed, Apr 13, 2011

Roth IRAs have gained popularity over the past few years, and for good. However, one thing most media commentators fail to address is that sometimes the people who could benefit most from a Roth conversion are the ones for whom such a conversion could carry the highest tax liability. Peter McDougall takes stock of the issue in a recent Wall Street Journal posting, and offers the potentially powerful cocnept of a one-two punch with defined benefit plans and Roth conversions that can help take the sting out of such conversions.

If you are wealthy and planning your estate, a traditional IRA can become cumbersome because of the required minimum distributions (RMDs). RMDs are taxable income, and thereby become a tax liability, and they deplete the assets you may prefer to pass on to your family. A Roth IRA has the advantage of allowing you to escape RMDs by paying the tax upfront. But, if you’re wealthy enough to be saving your IRA for your family then you are also likely to be in a higher tax bracket and in the line for e a hefty tax hit if you don’t play your cards right. The one-two-punch wisdom comes into play if you also have a defined benefit plan to which you make regular contributions. Those contributions are also tax deductible and can be used to offset the tax-cost of the Roth conversion.

Indeed, there are a number of tricks in the article’s specific anecdote, but the essential wisdom lies in the one-two punch of recognizing a means of finding enough tax deductions to off-set the tax-hit of the Roth conversion.

You can read more about Roth Conversions in our past blogs.  Learn more about tax planning with retirement accounts on our website. To learn more about protecting your home, family and life savings, attend a free workshop on Trust, Estate & Asset Preservation.

Tags: 2011, roth conversions, roth conversions, Roth IRA, Tax on IRAs, Tax Savings

Top Three Retirement Plans for Small Business

Posted by Dennis Sullivan & Associates on Wed, Apr 06, 2011

There are many different retirement plan options for small businesses (25 or fewer employees).  Before you decide which one would be best for your business, consider the following questions:

1. Can I afford a match for my employees?

2. Do I want to allow employees to contribute to the plan?

3. If so, will some want to save more than $11,500 a year?

4. Do I need flexibility to access the funds prior to retirement for emergencies?

5. How important are managing future taxes (a Roth option) versus my tax needs today?

Your answers to these questions will help you choose between the top three options: the 401(k), the SEP IRA, and the SIMPLE IRA.

The 401(k), which is probably the most well known, is also the most versatile because you can choose to match employee contributions or not and provide a vesting schedule. It’s also versatile for employees in that you can enable penalty-free access to the funds (by way of loans) and offer “catch-up” contribution opportunities to employees over age 50.  You could also elect for Roth 401(k)s that switch taxation to contribution rather than distribution, if you or your employees fear higher taxes in the future.

The SEP IRA, or “Simplified Employee Pensions” is the modern equivalent of a pension. It means that only the employer contributes to the fund, and must do so for all employees, rather than the employee contributing and the employer matching or not. The penalties are generally smaller, and it’s fairly easy to start, but this is because it is fairly stripped down in comparison to the 401(k) as there is no Roth, no catch-up contributing, no profit-sharing, and no loan option.

The SIMPLE IRA or the Savings Incentive Match PLan for Employees, offers the third option and is somewhat of a combination of the previous two. It is affordable, like the SEP IRA, but it operates by employer matching of employee contributions and offers catch-up options. Nonetheless, it is not quite as expansive as the 401(k), offering fewer options and having smaller contributions allowances. These of course, are just outlines.  Learn more by having your questions answered in person by attending one of our free Trust, Estate and Asset Protection Workshops.

Tags: Retirement, roth conversions, roth conversions, 401(k), Roth IRA, IRA, retirement plans

Roth Conversion?

Posted by Dennis Sullivan & Associates on Wed, Mar 23, 2011

If you made a Roth IRA conversion last year (when all the media were encouraging you to do so), you may be sorry now that it's tax time.  The good thing is that it’s not too late to undo your conversion decision. You can still “re-characterize” the conversion and put the money back in your traditional IRA, as if nothing had ever happened.

But why re-characterize?  Suppose you converted $100,000 to a Roth IRA in 2010, and you are ready to pay the tax on your 2010 return (you elected out of the spread to 2011 and 2012). Except that now, your investment in the Roth IRA has dropped in value to only $50,000 – and you still owe tax on the conversion of $100,000! Now that is just totally wrong! Re-characterization offers a do-over of the conversion itself, and yes, erases it as far as the IRS is concerned. Re-characterization will move the funds back into the original traditional IRA, and the IRS only sees it as the movement of the original amount minus losses, rather than as a separate interaction.

If you suffered a net loss on those assets, re-characterization will not reverse your losses, but you can out from under the heavy tax liability. There are some tricks to re-characterization not covered here so consult the IRA Owner's Manual and also to learn more about how to protect and take control of your assets and life savings call (800) 964 – 4295 for a free workshop or visit our 

Tags: roth conversions, roth conversions, Roth IRA, IRS, IRA

Estate Planning and the Roth IRA

Posted by Dennis Sullivan & Associates on Mon, Feb 14, 2011

Roth IRAs have become the darling of the financial media recently. Of course much of the chatter has been about using a Roth as part of your retirement planning strategy, and the superb conditions for Roth conversions. But what about the Roth IRA and your estate planning, what happens if you leave your Roth IRA to your estate? Marketplace Money guru for American Public Media, Chris Farrell, recently fielded the question.

“When it comes to estate planning, the Roth ranks among the best of the retirement savings plans,” says Farrell. Why? Unlike a traditional IRA, a Roth does not have “required minimum distributions” that force you to take money out during your lifetime. This means the money can remain in the account longer, and compound longer.

Because you can leave your money in the account without taking distributions, your Roth can be a powerful estate planning tool. Here are some of the major points to keep in mind:

  1. The Roth has to have existed for at least five years before earnings can be withdrawn tax-free.
  2. When you die, your Roth is considered part of your estate. If your spouse is the beneficiary, then the account is simply treated as belonging to him or her.
  3. If your children are the beneficiaries, they will have to make some choices. They can elect to receive the entire sum by the end of the fifth year following your death – or they can receive distributions over their life expectancy (allowing the money to compound longer).

As you can see, there are some powerful estate planning strategies available, and some of your long-term goals could be met utilizing a Roth IRA. Attend a free seminar if you’d like to discuss how a Roth IRA could be used to help meet your estate planning goals.

Tags: Estate Planning, roth conversions, Roth IRA, IRA, Metro West Estate Plan

The 7 Biggest Concerns For Your Retirement & Estate Planning (part 1 of 3)

Posted by Dennis Sullivan & Associates on Wed, May 26, 2010

With the stock and bond markets in another rollercoaster and tax rates on the upswing, many people are concerned about their retirement planning.  Whether it is a Roth conversion or how to complete a beneficiary designation, we hear many questions from our clients wondering what they should do—and what they shouldn’t!

MA Estate and Retirement Planning

Here are 7 of the some of the biggest issues you should be thinking about with your IRA’s, 401k’s and other retirement plans:

1.    Does a Roth conversion make sense?  

You probably know that 2010 is a special year for people considering converting a traditional IRA to a Roth. In this year there are no MAGI income limitations on how much you can convert. In addition, you have the opportunity to spread out the income tax you pay on your Roth conversion into 2011 and 2012, mitigating the tax bite. That means that if a Roth conversion is going to make sense for your family, now is your time.

But does it make sense? Well, that all depends. When you convert from a traditional IRA to a Roth you are essentially pre-paying the income tax that you would otherwise have paid over a period of years as you took required minimum distributions after age 70 and ½. By paying the tax now you guarantee that any distributions you (or your beneficiaries) take later will be income tax-free.

Is it worth it? It might be, depending on how long you have for the money to grow tax free, what your tax bracket is now and what your tax bracket might be in the future (consider that today’s income tax rates are at historic lows). It also depends on whether you have the cash on hand to pay the tax or if you are planning to use money taken from the IRA to pay it. If you are under 59 ½, money taken from the IRA to pay the tax will be subject to an early withdrawal penalty.

Because there are so many factors involved, a Roth conversion is something you should consider carefully. However, it is most likely to make sense for retirees under one set of circumstances—you don’t think you’ll ever need the money at all and you want to keep it growing tax free as a family legacy!

If between pensions, social security and other investments, some or all of your IRA is money you may never use, you might be targeting it as an inheritance for children and/or grandchildren. But if you live a long time required minimum distributions will mean that you have to take that money out (and pay taxes on it!) whether you need it or not. A Roth conversion will allow you to keep the money growing tax free throughout your lifetime, leaving significant growth for your heirs.

2.    Do you have the right beneficiaries?  

Many people we speak to haven’t looked at the beneficiaries of their IRAs since they first opened the account. They may have changed banks or brokerage houses, had new children or grandchildren, or even lost a spouse, all without ever thinking about what those beneficiary designations will say.

This can be a real problem! If your IRA doesn’t name a beneficiary at all, or names a beneficiary who has since passed away, it will go through probate and deal with all the costs and time delays of the court system AND an income tax payable almost immediately.

If your IRA names the wrong beneficiaries—say an ex-spouse—the consequences might be even more undesirable. Instead of an inheritance, you may have left your family a nightmarish lawsuit!

3.    Is your beneficiary’s inheritance safe?

Like most families we help, you may have taken steps to make sure your IRA reaches your children and grandchildren intact, but if they have problems of their own—divorces, lawsuits, family issues or other creditors—they may never get to enjoy that IRA. 

You may be aware that an IRA you set up for your own retirement has special protection if you are sued or become bankrupt, but an inherited IRA has no protection at all and if left to your child or grandchild outright, the entire amount of the inherited IRA will be vulnerable to all claims of creditors, lawsuits and ex-spouses.

The solution? You can establish an asset protection trust to protect your family legacy and your children.  Request a report by contacting us through our website or by calling our offices at (781) 237-2815.

Parts 2 & 3 are coming soon...To learn more about how the Estate Planning and Asset Protection Law Center can help you protect your retirement accounts for your spouse and future generations, sign up to attend a free Trust, Estate and Asset Protection workshop by calling (800) 964-4295 (24 hours) or registering on our website. 

Tags: Estate Planning, massachusetts estate planning strategies, roth conversions, Tax on IRAs, retirement plans

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

Will Your Estate Plan Protect You, your Spouse and your Family?

Posted by Lucy Budman on Thu, Jan 21, 2010

It’s a New Year and, like most, you’ve probably made a list of resolutions…is protecting your family, your life savings and legacy on that list?  If you do not have an estate and asset protection plan, then 2010 is the time to create one!Many erroneously believe that estate planning is only relevant to help avoid estate and inheritance taxes. However, here are just a few of the numerous benefits for estate planning:

1.        Peace of mind knowing that your spouse and your family are taken care of in the event of serious health issues or your death. 

2.        Safeguard your assets and life savings, and have the assurance your beneficiaries will receive their inheritance.

3.        Provide for your family with a most heartfelt and invaluable gift, designed to save time, money, taxes and avoid complications.



Perhaps you already have an estate plan.  If so, double-check to see when it was created.  Have any of the following situations occurred since?


  •  Marriage, divorce, or death of a child (or the former spouse of a child)
  •  Birth of a child or a grandchild
  •  Divorce
  • Change in family circumstances
  • Retirement or change in job that causes a change in employment benefits
  • Acquisition of new insurance. Did you realize your insurance may be subject to a 50% plus tax
  • Receipt or expected receipt of an inheritance
  • Creditor issues that may impact planning
  • Concerns of rising Nursing Home costs


It is a common misconception that estate planning is a one-time event…this is simply not true!  A yearly review of your plan is strongly recommended to ensure it continues to protect your family, your spouse, your home, your life savings and your legacy. With the changes in the law, it is especially important to review or create a plan now.  Are Your Assets Protected?  Today people are living longer.  What if you need to go to a nursing home? Costs in Massachusetts are one of the highest in the nation, averaging $10,000-$12,000/mth or $144,000/year. Avoid a complete “spendown” and preserve your legacy!  The best protection is to plan well in advance; however, even if you or a loved one is entering a nursing home, it’s not too late for us to help you.New This Year, Roth IRA Conversions:  Income limitations for Roth IRA conversions are temporarily repealed for 2010. You have the chance to spread out income taxes from the conversion over 2011 and 2012 tax years. We provide our clients with a comprehensive analysis of their situation and help them decide if a conversion makes sense. Roth Conversions are a powerful tool for a person in the right financial and tax situation. 

For more information on avoiding a 70% tax on IRA’s and how a Roth may help, along with how to eliminate the top seven mistakes we see in retirement, estate and asset protection planning, register for a free educational workshop by calling 800-964-4295, 24 hours a day.

To learn more about our process and how we can help you and your family, call 800-964-4295 to register for a free educational workshop. Also visit for additional information.

Tags: Nursing Home Costs, Estate Planning, estate tax, trusts, roth conversions

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