Massachusetts Estate Planning & Asset Protection Blog

Unequal Inheritance, A Problem with Communication

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Aug 22, 2014

The Problems with Unequal Inheritance | Massachusetts Estate Planning Attorney

Inheritance, family, unequal 

Just Because It Makes Sense to You…

Sometimes clients want to leave more to one of their children than another. Their reasons may vary, ranging from their child’s current financial wellbeing, to any special needs they may have or even which of their kids is their favorite. What does not seem to change though is their concern that this may cause discord in their family once they find out.

It can be an uncomfortable subject to talk about with your family and you can never be certain how people will react, but the alternative of finding out only after their loved one has already passed, can be far more devastating. The reasons you use to make the decision of who-gets-what may be perfectly clear to you, but your children may not know what you based your decision on and they will never get a chance to ask you about it. The emotional fallout from this can rip once close-knit families apart.

 

Money Does Not Equal Love

This is because of the often mistaken tendency to equate love and money. If you leave more money to one of your children their siblings may think that you loved them more. After all, if you had some sort of logical reasoning behind the decision, why wouldn’t you have simply told them? You may have had very good reasons for why you did not talk to your children about this before but the lack of communication can have devastating effects on your family once you are gone.

 

Explanations Make Everything Easier

For example, you leave three quarters of your estate to your youngest child but only one quarter to your oldest, but you still make them the executor of your will. The older child will have a hard time not feeling resentment towards their sibling and their new responsibilities without any explanation from you. Simply explaining your reasons can go a long way towards preventing a bitter legal fight once you are gone. We recommend sitting down with all parties and explaining your reasoning to them in person. However, we know that not all families are comfortable talking about money, in those cases we recommend leaving a detailed letter explaining your reasons why you divided your estate the way you did.

Expanding on the earlier example, you may have decided to name your oldest child as executor simply because you know it will be more convenient for them to meet with your estate planner since your younger child has moved several hours away for work. Just telling your child this will lighten the burden on them. Likewise, you may have left more of your estate to your youngest because they need the boost starting their own business or because you know their financial situation isn’t as strong and they may need some help. A simple explanation can prevent a lot of needless stress from ever arising in your family.  

 

 

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 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: will, family, executor, Massachusetts, Wills, senior, Inheritance, children, unequal

Can Your Will Protect You When You Don't Die?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Aug 07, 2014

 

What Happens When You Don’t Die?

medicare, medicaid, wills, spouse

 

Is your “I love you” will capable of protecting you or your spouse from long-term care costs?

You know the kinds of wills we’re talking about: The husband leaves everything to the wife, the wife leaves everything to the husband and after they both die, everything goes to the kids. This works well in situations where the spouses are healthy one day and are deceased the next. 

However, as most of us know, life usually doesn’t work that way very often. Research indicates that nearly 70% of individuals over 65 will require some kind of long-term care in their lifetimes.

Thus, many spouses worry that if they predecease an ill spouse who is currently in a nursing home or will require long-term care at some point in the near future, there will be insufficient funds available to provide for their institutionalized spouses’ needs. This is an especially relevant concern for expenses that are not covered under Medicaid such as: care managers, private nurses, single rooms, as well as certain therapies and drugs.

Another concern is that the availability of funds from “I love you” wills and trusts will disqualify the surviving ill spouse from eligibility for Medicare benefits. As you know from prior articles, Medicare (MassHealth in Massachusetts) is the only long-term-care governmental program in the United States and does not cover long-term custodial care.

To solve this problem many of our clients rely on a “testamentary trust”. This is a trust built into the will of each spouse. For many estate planners, this is counterintuitive because much of the estate planning occurs within the context of a revocable living trust. In order to preserve access to Medicaid eligibility without requiring that the surviving spouse spend down the assets and lose the chance to maintain a “rainy day fund”, creating a testamentary trust in the will of the pre-deceasing spouse is essential.

What this means is that around age 55, you have to completely revise your wills and trusts to accommodate a different paradigm of thought. The thinking process is no longer “What happens when I die?” Now the question becomes “What happens if I don’t die and live a long time with expensive long-term care?”

The new paradigm requires a new estate plan. If you consider yourself middle-class (meaning that your net worth will be significantly impacted by the cost of long-term care for you and/or your spouse) and are over age 55, we suggest that you revise and update your estate plan to reflect your current and future needs as soon as possible.

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 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: will, living will, Estate Planning, Estate Planning, Alzheimer's Disease, Elder Law, asset protection, long term care, Medicaid, in-home care, Health Care, estate reduction, estate, elder care journey, hospice, Alzheimers Disease, medicaid qualification, Wills, assets, Medicaid penalties, alzheimer's activities, in home, incapacity, Elder Law, Attorney, myths, Alzheimer's, alzheimers, financial, Attorney, income, Alzheimer's, federal, health, surviving spouse, in-home care, long term care insurance

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

Avoiding Massachusetts Estate Taxes, NOT Just for the Rich

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Aug 19, 2011

When you pass away, who do you want as the primary beneficary of your estate, your loved ones or the government?

Estate Tax Facts

Many people, as you may guess, do not want their life savings and legacy to be swallowed by estate taxes.  What most people are not aware of however, is the fact that if they passed away today their heirs would be forced to pay state and federal estate taxes, even if the deceased is far from what most would consider "wealthy".  They also do not realize that an experienced estate planning attorney can help them AVOID taxes ENTIRELY.  

Massacusetts Estate Tax

Massachusetts taxes every dollar in an estate above the $2 million threshold, recently increased from $1 million.  What Estate Tax this means is in an estate worth $2.5 million dollars, $500,000 will be subject to a Massachusetts estate tax.  Many are concerned with budget cuts and sweeping reform that state legislators will consider dropping the tax exempt amount, thus subjecting more estate to a tax.  within the last 10 years, the federal estate tax exemption, which now stands at $5 million, has been as low as $675,000.  

If your current estate exceeds the state and federal tax exempt amount, without proper planning you can expect to lose 50 cents of every dollar to the government. 

You may be reading this, thinking that your estate is not in jeopardy of being destroyed by taxes because you are well under the exemption amount.  You may think your estate is well under, but there are several catagories of non-obvious wealth you need to include in your estate valuation.  The most common of these are life insurance death benefits and retirement accounts such as 401(k)'s and IRA's.

An Example on the Impact of Estate Taxes

Person A is married, has 2 college age children and belives his estate to be worth $700,000.  Person A failed to take into consideration his IRAs and life insurance policies.  Believing their net worth to be well below the $2 million Person A and his wife executed simple wills with no consideration paid to tax planning. 

Tragedy stirkes and Person A dies.  After his death his wife collects a $2 million life insurance benefit and his $500,000 IRA.  In another tragic turn, Person A's wife dies shortly after him.  Their estate, which they believed to be under the Massachusetts exempt amount, is now worth $3.2 million, leaving $1.2 million subject to estate tax, even if the state and federal thresholds are not lowered.

Avoid Massachusetts Estate Tax

Luckily, many people like Person A and his family can completely avoid paying any estate taxes.  To take steps to protect your life savings from the reach of state and federal estate taxes, register online to attend a free educational workshop hosted by Dennis B. Sullivan, Esq, CPA, LLM or by calling 800-964-4295 (24 hours a day).  You can also check out Free Elder Law Guides developed by the team of professional at Dennis Sullivan & Associates.  By planning now you can save you and your family the stress of having to worry about the future. 

Tags: will, Estate Planning, trusts, Estate Planning, Massacusetts Estate Tax, Baby Boomers, Tax Savings, estate reduction, legacy, elder care, budget cuts, tax deductions, tax liability, estate, estate tax, tax exemption, tax reform, taxes, Debt Ceiling, 2011, Massachusetts estate tax

Special Legal Documents for The Alzheimer's Patient

Posted by Dennis Sullivan & Associates on Tue, Jul 19, 2011

Planning ahead is important for everyone to ensure our wishes are met in the event of death or incapacity.  For families coping with Alzheimer's disease and other kinds of dementia planning is even more important because of the uncertainty of your loved one's capacity prognosis.

Power of Attorney.  A general, durable power of attorney is a legal document which lists the person or persons authorized to make decisions on behalf of another when that other person has reduced mental capacity.  The extent of the power given to the authorized person/s is up to the individual on whose behalf the document is being created.  An appropriately designed and executed power of attorney provides great peace of mind to the individual in question as well as to his/her family.  With this tool in place, there will always be someone to pay bills, withdraw funds, process any income, etc. on your loved one's behalf, according to their plan.

In some cases, people choose to establish separate powers of attorney - one for finance and another for health care. The two or more people would have authority to make decisions in different areas, financial and health care.

The person/s with the power of attorney for health care, for example, would make choices regarding treatment changes, continuation of life support, etc. The person with this power of attorney also has access to the medical records of the person with Alzheimer's. The person with power of attorney for finances usually has access to the person's bank accounts and ensures that his/her bills, including medical bills are paid.

In situations where the power of attorney is not provided ahead of time, the person who will have power of attorney must go to court to establish guardianship, which can be a lengthy and costly process for the family.

Who Decides Whether You're "Competent"?

There are various competency tests like the Hopkins Competency Assessment Test.  However, in many cases, this decision is made within families, when a loved one agrees or asserts that their ability to think clearly and make good decisions is impaired.  This revisits the need to begin to talk about this kind of planning early in the Alzheimer's diagnosis.  Once dementia-like symptoms become more severe, it becomes more difficult to broach topics like competency with your loved one.

What is an Advanced Directive?

An advanced directive, or living will, states your health care/disability instructions. Advanced directives can provide the following information:

  • The individual's wishes regarding life support and other life-lengthening measures;
  • The role of the power of attorney for health care;
  • The individual's wishes regarding his or her death.

Wills/Trusts

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

Both a will and a living trust can 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, 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.  To learn firsthand about these documents and other issues surrounding an Alzheimer's diagnosis call our office at 781-237-2815 or register online to attend one of our Trust, Estate and Asset Protection workshops.  For more information about dealing with all the various intricacies of Alzheimer's, please also visit us online to read the valuable information in our Alzheimer's Resources Kit.

Tags: will, living will, health care proxy, trusts, Alzheimer's Disease, durable power of attorney

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

Don't Leave Your Legacy To Chance

Posted by Dennis Sullivan & Associates on Wed, May 18, 2011

If you are a Baby Boomer who has worked hard, accumulated significant assets, support charitable causes, and plan to continue working through “retirement,” you are not alone! And you won’t be particularly surprised by the findings of a recently released survey by US Trust: Insights on Wealth and Worth. The survey was conducted earlier this year, with 457 high net worth and ultra high net worth individuals, with $3 million or more in investable assets. The survey found a distinct generational mindset among the wealthy – many of whom are Baby Boomers, self-made, first generation wealthy who achieved financial success on their own.

You are probably familiar with some of these insights found by the survey:

  • Nearly half of these wealthy individuals plan to continue working into “retirement,” many starting a second career or new business.
  • Many also want to be able to travel – possibly “going mobile” with their business, perhaps even into retirement?
  • Many wealthy Americans want to give back to their communities and support charitable causes, and they may need professional legal advice to fulfill those ideals.
  • Few have the type of comprehensive estate planning in place that matches the complexity of their estate, their finances and their estate planning goals.

That last insight, about few people having the type of comprehensive estate planning they really need, may come as a surprise. I see this in my practice every day. Just because you have a simple will in place or believe the federal estate tax will not affect you, does not mean you have adequately met your estate planning needs. Some common “gaps” that turned up in the US Trust survey include:

  • No living will or health care directive
  • No durable financial power of attorney
  • No revocable living trust
  • Inadequate planning for life insurance
  • No charitable planning, despite charitable intent
  • No written plan for the distribution of personal property
  • No business succession plan.

If you saw yourself in the first paragraphs of this post, you likely saw yourself again in the last few. If you don’t take action, then you are leaving your legacy to chance.  

To learn more about protecting your legacy, attend a free, educational Trust, Estate & Asset Protection Workshop. Register online or call 800-964-4295.

Tags: will, power of attorney, living will, Estate Planning, trusts, Retirement, Baby Boomers, Business Succession Planning, Charitable Giving, durable power of attorney, legacy

How To Make Sure Your Final Wishes Are Carried Out

Posted by Dennis Sullivan & Associates on Fri, Mar 11, 2011

Retaining control and dignity as the end of life approaches is an often overlooked aspect of comprehensive estate planning. Regardless the size or value of your “estate,” proper planning should address these difficult issues.

US News & World Report ran an article last week, How to Ensure Your Last Wishes Are Carried Out. As they outline, there are two primary ways to ensure your final wishes are followed: one is through legal documents, and the second is by communicating your wishes to those who may be involved in carrying them out should you become incapacitated.

As regards legal documents, you’ll need a power of attorney for healthcare, also known as a healthcare proxy. Your health care power of attorney allows you designate the person you want to be your health care decision-maker in the event you cannot make decisions for yourself.

You also may want to consider a Living Will. A Living Will is the document that helps guide the health care decisions made on your behalf. This is the document that allows you to spell out what types of medical care you would, or would not, want to receive in various situations.

The most important piece of advice? Make these decisions now, while you are able. Record them in valid legal documents, and communicate your wishes to those who may be carrying them out.

You can read more about Powers of Attorney and Health Care Documents (or Advance Directives) in the Estate Planning Strategies page on our website.

  For more information on crafting a legal plan to maintain control over your assets and life decisions, attend a free Estate Planning and Asset Protection Workshop.

Tags: massachusetts estate planning strategies, will, living will, health care proxy, Estate Planning, trusts, Estate Planning, Elder Law, Metro West Estate Plan

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

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 LegalZoom.com 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 http://www.estateplanandassetprotection.com/free-resources-19-point-trust-estate-asset-protection-legal-guide/ 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 http://www.estateplanandassetprotection.com 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: massachusetts estate planning strategies, will, trusts, estate tax savings, Estate Planning, Mistakes

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