A basic estate plan should include a last will & testament, a health care proxy, and a durable general power of attorney. Trust planning should be considered for minor or dependent children, providing for a surviving spouse or a person with disabilities, and for estate tax planning. There is no “one size fits all” trust, so it’s necessary to discuss your goals and finances with an estate planning attorney who can guide you in the right direction and create a trust or multiple trusts that serve your needs.
A last will and testament allows you to control how your personal assets are allocated upon your death. In the absence of a will, the MA statute of intestacy will apply, and your assets will go to their heirs designated by the statute.Wills should be written by a knowledgeable and experienced attorney to ensure that they are executed properly. Contact the Law Office of Chantal Hayes Rice, Esq. to get started.
These are legal agreements between you and a trustee where you provide specific instructions regarding the management of the trust assets during your lifetime and the disposition of the trust assets after you die. You may opt to transfer assets into the trust during your lifetime to avoid probate and make for an easier transition of your assets to the beneficiaries. There are pros and cons to transferring assets into a living trust that should be discussed with an estate planning attorney who will provide specific advice based on your situation. Factors such as age, health, asset value and special needs will have an impact on the suitability of a living trust.
For clients with minor or dependent children who are not able to appropriately manage their finances, a children’s trust should be considered as part of the overall estate plan. In a children’s trust, the Trustee will have discretion to make distributions of trust income or principal for a beneficiary’s health, welfare, education or support based on the needs of the beneficiary. Once the beneficiary reaches a certain age or other triggering event (i.e. graduate from college) he or she will receive the remaining trust property outright. A children’s trust can also be used for grandchildren or other relatives.
In MA, a decedent will be required to file an estate tax return if his or her total assets as of the date of death exceed $1 Million. A decedent’s taxable estate includes the value of any and all assets including the value of a primary residence, second home, retirement account balances, pension, annuities, powers of appointment and the full death benefit of a life insurance policy. If you own your home, have life insurance and investment/retirement accounts, your estate is likely to be subject to the MA Estate Tax. Where a married couple has significant assets that exceed the Massachusetts and/or Federal estate tax exemptions, a credit shelter or bypass trust can be used to take advantage of the unlimited marital deduction and reduce or eliminate the estate tax for beneficiaries. It is important to have a discussion of estate tax as part of your estate planning consultation.
If you seek to provide a disabled person with an inheritance or other large amount of funds, you must seek legal advice before doing so otherwise the disabled person may lose their state or federal benefits. A supplemental needs trust (a/k/a “special needs trust”) can be established for the benefit of the disabled person to pay for certain expenses that public assistance does not provide such as vacations, extraordinary medical treatments, surgery & therapy, special equipment, education, electronic equipment and computers, internet & cable, special transport vehicles and burial expenses.
A health care proxy is a document in which you name a trusted person to act as your agent to make health-care decisions if and when a doctor declares that you are not competent to make your own health care decisions. You can sign a basic form that is available through your doctor’s office which gives total and absolute authority to your agent or you can have the document prepared by an attorney who will draft the document to reflect your specific wishes and the medical treatments and options that you want your health care agent to make for you.
A living will is a legal document in which you clarify your personal wishes about end-of-life medical treatment, including resuscitation, intubation, hydration, feeding tubes and other life sustaining measures. The attorney will give you a variety of options for you to consider when making your decision. If you currently have a terminal illness you should speak to your doctor about executing a Medical Order for Life-Sustaining Treatment (MOLST) Form. A MOLST form is a set of specific medical orders for patients with advanced illness that is signed by the patient and doctor.
A durable general power of attorney is a document in which you give your agent power to make decisions over your finances. Your agent can sell your home, make changes or withdrawals from your retirement account or engage in nearly any financial transaction on your behalf. It is of utmost importance that you give this power to a person who is competent and trustworthy. Your estate planning attorney can help you choose the right person or persons for your situation and customize the document to fit your needs and wishes.
In cases where a person did not execute a power of attorney or a health care proxy and has become unable to make his or her financial or health care needs, a petition for guardianship and/or conservatorship will need to be filed in the probate court to have the court appoint a suitable person to make decisions for the incapacitated person. In this situation, the incapacitated person’s health care and finances are managed by either a family member approved by the court or a court-appointed person in cases where there is no suitable family member to serve.