|
It is never too early, or too late, to make your wishes known about what should happen to your property if you should pass away. In Massachusetts, anyone who is least 18 years of age and of sound mind can make a valid Will. Your Will must be in writing and signed by you before two witnesses. There are many choices that need to be made, and there are consequences, good and bad, resulting from the various choices you make. A Will is an extremely important document and should not to be taken lightly.
Because of this, your first step should be to seek the counsel of a competent, highly experienced, estate planning attorney such as the Law Offices of Keith McManus. We can guide you through the legal process of making your Will, and/or setting up a Trust. We can help you to avoid common mistakes and pitfalls that can produce unexpected results, unnecessary taxes and expenses.
Death is a subject that many people feel uncomfortable talking or even thinking about. Because of this, they often put off preparing for what they would like to have happen to their belongings after their demise. With the uncertainties of life, preparing a Will or Trust is something best done sooner, rather than later. Procrastination can be a big mistake. Should you pass away unexpectedly without a Will or Trust, it can cause serious legal headaches, be financially harmful and emotionally painful for your loved ones left behind.
Your Will gives your loved ones and the courts your own instructions as to how your estate and property should be distributed. In Massachusetts, if you should pass away without a will you are considered to be "intestate".
If you should die intestate, you have lost control over the property that you leave behind. You have no say as to how the estate is to be divided, or who is to receive it. Without a Will or Trust, all of the property and assets owned by you at the time of your passing will be distributed under a Massachusetts law called the “Intestacy Statute”.
If you have no Will or Trust, and your estate is determined to be worth more than one million dollars, your estate may have to pay to the Commonwealth of Massachusetts substantial estate taxes. This will be very costly for whom the state determines should be your beneficiaries. Further, if your estate is worth over two million dollars, there will be federal estate taxes that will need to be paid in addition to the state estate taxes.
You may be surprised to discover that taxable estates with a gross value over $1 million are rather common in Massachusetts. Over a lifetime, you can acquire considerable wealth, even more than you may realize. The value of your home alone can be valued at hundreds of thousands of dollars. When you add up your other assets such as life insurance policies, jewelry, money market accounts, stocks, bonds, savings accounts, checking accounts, and other valuable personal property it is easy to see how your estate value can add up.
Now that we have established the importance of having a Last Will and Testament, the next step is to determine who will take possession of your property and when they shall receive it. For instance, you can direct that your property be held in trust until the person you wish to receive it reaches a specified age. You can even give the property from your estate to an organization or your favorite charity.
You will need to choose an executor to administer your estate, to determine who will raise your minor children and who any other parties should be such as trustees or custodians. This is your chance to take control. Remember, If you do not have a Will, the state Intestacy Statute applies, and the state determines who will receive your property. In your Will, you can extend the powers of your executor, such as giving them the power to sell real estate without a license from the court, etc. You can also instruct the executor to serve without sureties on his or her bond.
Massachusetts law does not allow for joint Wills. If you are married, you and your spouse must each have separate Wills even if you own all of your property jointly. When the first spouse passes away, all joint property will transfer to the surviving spouse. Therefore, the survivor who becomes the sole owner of the property also needs a Will. Since there is no way of knowing which spouse will die first, both spouses need Wills. Property may be found that you own right now or in the future without you even knowing that you own it and is not owned jointly with your spouse.
Once you have made your Will, your lawyer should keep your original Will. Copies should be made and are best kept in a safe deposit box. You should also give a copy of your Will to the executor that you named. If you should change your Will later on, be sure to have the executor return their copy to you. Only the original Will should be signed, never the copies.
There can be more than one executed copy of the durable power of attorney or health care proxy. The attorney should hold the original, and copies kept in your safe deposit box. Your primary physician should also be given a copy of the health care proxy and be made part of your medical records.
Once that you have made your Will, don't simply store it away and forget about it. You need to review it at least once every four or five years. You want to make sure your Will is still relevant and accomplishes your goals. More frequent reviews are needed if you have gotten married, divorced, separated or remarried since marriage revokes a Will and divorce revokes any provisions concerning the spouse.
Other reasons requiring an early review of your Will include if a child or grandchild has been born; or you have moved to a new home or if there have been a change in the tax laws or your assets have changed in value; or if your relationships with beneficiaries have changed; or any of your beneficiary's needs have changed.
You can change your Will or replace it with a new Will or you can revoke your Will at any time assuming you are still of sound mind and are competent. To be considered competent, you must be able to comprehend the consequences of your act, know the size and extent of your estate and know who your beneficiaries are. Signing a codicil, or an amendment to a Will, before two witnesses and a notary public, can change a Will. Tearing it up, or canceling it can revoke a Will or you can sign a new Will.
Your executor needs to be chosen carefully. It can be your spouse, a friend, a neighbor, or a relative. Your choice may be made in order to save on administrative costs or to honor the individual. But, as tax compliance and postmortem elections have become more and more complicated, the responsibility of being the executor may impose a real burden on the individual and not achieve your original goal.
Your executor should be someone who you can trust, be highly competent, have a good knowledge of the state and federal tax laws, have sound financial judgment and good business sense. A good choice may be your bank's trust department or your attorney. You can also name a family member as co executor with a professional. By doing this, the personal interest is combined with professional expertise and management.
A Trust is when assets are placed in trust to be held and managed for your benefit, or for the benefit of your heirs by a person called a trustee. The purposes of a trust can include to manage your assets in order to produce income for a beneficiary, conserve assets or provide for growth of these assets; to reduce estate taxes; to control use or disposition of assets long after you are deceased; to provide for a spouse and offspring; to provide for your children during their minority or if disabled; and to protect beneficiaries other than yourself from creditors. A living trust is just a type of trust, created while you are living. It can be funded while you are living or after your death. If it is funded before you die, the assets in the trust do not pass through probate and to that extent will avoid the probate process. You can be a beneficiary of this type of trust.
It is not recommended that you include funeral instructions or anatomical gift instructions in your Will. This is because it may not be read until sometime after your death or even after your funeral. It is best for you leave a letter with your funeral instructions with your family, funeral home, or place of worship. If you wish to make anatomical gifts, forms can be filled out and be kept on your person in the event of your sudden or unexpected death.
A power of attorney is a instrument through which you may designate someone to act as your agent or attorney in fact to perform certain acts in your behalf. If it is a "durable power of attorney," it means that the power of attorney remains in effect even if you were to become incompetent. It can avoid the appointment of a guardian or conservator for the management of assets.
When property is owned jointly, the signatures of both parties are generally required. Such is the case during the transfer of real estate. A durable power of attorney signed by your spouse would allow you to sign for your spouse even if the spouse were incapacitated. Also, it would allow you to be the payee of certain of your spouse's benefits such as Social Security payments, and it would also allow you to sign income tax returns on your spouse's behalf.
Another important document you should have is a health care proxy. This document allows you to appoint someone to act as your health care agent to make critical health care decisions for you should you be unable to make or communicate such decisions for yourself. The health care agent can make life or death decisions regarding resuscitation or the use of, or terminating of the use of life support systems. You and your spouse do not need to be elderly or infirm to need a durable power of attorney and a healthcare proxy. Accidents and life altering events can happen to anyone at any time or any age and these documents need to be an important part of your estate plan.
Probate is the legal process of proving the validity of a Will. If there is no will, the probate court will determine who your next of kin are under state law, and who should be the beneficiaries of your estate. In Massachusetts, the probate process is not excessively expensive, but it will take at least one year from the date of your death so that any creditors have time to file claims.
There are ways to avoid Probate completely. You can have your assets placed in a form that will automatically pass title to your intended beneficiaries after your death by operation of law, such as joint ownership of assets, or assets where a beneficiary can be named, such as life insurance, IRAs, and pension plans. Your assets transferred to living trusts prior to death are not subject to probate, but are controlled by the trust agreement instead.
This is why a Will and particularly a trust are especially important when minor children and any former spouses are involved. Your former spouse could be appointed as the guardian of your minor children. If you have no Will, your kids will inherit your estate when you die. But, if your children are under the age of 18, your former spouse - as their guardian - will have control of your money.
But when you have a Will, you can create a Testamentary Trust to hold your estate for your children until they reach their majority or some later age that you designate so that your ex-spouse never touches the money you wish for your children to inherit. This can be accomplished with a living trust as well.
Likewise, you can provide for a second spouse while still protecting assets for your children. This can be accomplished through a testamentary or a living trust. You can determine how much or how little is to be set aside for your spouse for their lifetime subject to their statutory rights to take a certain share of your estate. Because your assets are in trust, your spouse can benefit from them but not control them. You control the final disposition of your assets, not your spouse. Your trust can provide that when your spouse dies, the balance will pass to your children or issue or it could be held in further trust for them.
If you prefer, your children or issue can be beneficiaries of the trust even while your spouse is still living. However, if tax planning is a concern, there are certain restrictions that must be taken into account. |
