When you die without a valid will, Massachusetts Intestate Succession Laws determine your heirs. Marital status, children, and living relatives are all important factors. Understanding what the law dictates is essential, as is having an estate plan to select alternative heirs. Below are some of the most common scenarios and resulting heirs.

Single/Unmarried Person

For a single/unmarried person, the first factor is whether there are any living children. If so, children equally inherit everything. Thus, 2 children would each inherit 50% or 4 children would each inherit 25%. If there are no children but one or more parent is living, then they are next in line as heirs. Without living parents, the estate would pass to siblings.

Married Person Without Children

Most people expect that a surviving spouse would inherit everything when the other spouse dies, but this is not necessarily the case. When a married person has no children but does have living parents, both the spouse and parents are heirs. According to MA Intestate Succession Laws, the spouse receives the first $200k of the estate and then 3/4 of remaining assets. The rest is inherited by the parents.

For example, let’s assume an estate is worth $800k. A surviving spouse would receive $200k and $400k (2/3 of $600k). So, the spouse receives $600k total; the remaining $200k goes to the parents. Only if there are no living parents and no direct descendants would a spouse inherit all assets.

Married Person and With Children

When a person is married and has children, the spouse receives the entire inheritance if the children are from the same marriage. If children are from a different marriage, then both the spouse and children receive an inheritance.

Bypassing Massachusetts Intestate Succession Laws

The above examples are actually fairly straight forward. As you can imagine, family relationships can get much more complex. There’s also the possibility of previously unknown heirs making claims against an estate. Ultimately, the only way to bypass Massachusetts intestate succession laws is to create a proper will.

It’s important to note that merely having a will is not enough. There have been cases where a drafted will was not enforceable or was missing key elements that provided opportunities for unintended heirs. With something as important as your estate, be sure to consult with a Massachusetts estate planning attorney. Your attorney will evaluate your goals, explain your options, and prepare any necessary estate planning documents. Contact our team to learn more about creating an estate plan to protect your assets and your intended heirs.

A common misconception is that only the wealthy need an estate plan. Although minimizing taxes for high value estates is one aspect of estate planning, there are many more benefits. Here’s why estate planning is important for everyone, not just the wealthy.

1 – Eliminate Unnecessary Expenses

A lengthy probate process can be expensive. Unless your heirs are attorneys, they will likely need to hire one to assist with filing paperwork and attending court proceedings. Most attorneys will charge hourly for such services. As you can imagine, this can quickly add up and reduce the value of the remaining assets. For heirs that may not have funds to hire an attorney to begin with, it can be an added hardship. Creating an estate plan that avoids probate is one of the main reasons why estate planning is important for everyone.

2 – Provide Immediate Financial Support

Could your dependents survive for months before receiving any financial support? For most people, their dependents rely on their immediate and continual support for everyday needs. A delay of months or even years, while the probate process completes, could be detrimental. An estate plan is the only way to eliminate the delay caused by probate.

3 – Avoid Unintended Heirs

You may assume that your assets will go to your spouse and/or children, but that may not necessarily be the case. Massachusetts follows succession laws which determine heirs based on your marital status, living parents, children from current and/or previous marriages, siblings, etc. Heirs are identified during the probate process, but potential heirs are also given an opportunity to come forward. Regardless of the value of your estate, unintended heirs will dilute that value and leave less for your intended heirs. This is another reason why estate planning is important for everyone.

4 – Control Asset Distribution

If your heirs are not accustomed to having large sums of cash, you may be concerned about how they might manage a lump sum inheritance? Spreading distribution of funds over several years and/or until your heirs reach a certain age can help prolong the benefit of their inheritance. This is particularly important for young adults. You can even condition disbursements on milestones such as completing college.

More on Why Estate Planning Is For Everyone

When you consult with an estate planning attorney, you’ll notice the focus is on your estate planning goals rather than solely on the total value of your estate. Sure, assets are a consideration, but it is one of many factors. Every estate plan is different and is designed to fit the unique circumstances of the individual. The important thing to know is that regardless of whether your estate is worth $100 million or $100,000, you can protect your assets, maximize value, and avoid unwanted outcomes with a well-prepared estate plan. Everyone can benefit from the protections available in estate plans,… which is why estate planning is important for everyone.

Contact our team to schedule a free consultation and to learn more about the benefits of estate planning.

Although every estate plan is technically unique and designed to fit your specific needs, there are some documents that appear in most plans. Below is a quick overview of what those are. Should you include these common estate planning documents in your own estate plan?

Will

A will allows you to list desired beneficiaries for your assets and who should care for your children. Without it, courts will designate heirs based on intestate succession laws and guardians based on information available to them. Although it sounds like a straight forward document, an improperly created will is much like having no will at all. The best way to ensure your wishes are honored and disputes among family members is to have a will formally prepared by a Massachusetts estate planning attorney.

Healthcare Proxy

A healthcare proxy allows someone you trust to make medical decisions on your behalf when you are unable to do so yourself due to incapacitation or disability. By making it clear who has this power, it can avoid disputes among family members and delays in medical care. The person you select need not be a relative, but it should be someone familiar with your preferences regarding life saving measures.

Power of Attorney

Financials are another important consideration. If you are incapacitated or disabled, who will manage your financial affairs? This may include paying your mortgage, rent, utilities and other bills. By assigning power of attorney ahead of time, the person of your choosing can instantly step in when needed. Again, be sure to select someone that you thoroughly trust. Additionally, it may be best to select someone who is not also your healthcare proxy.

Trusts

Another of the most common estate planning documents are trusts. There are many types of trusts, each with different goals and benefits. Many people use trusts to avoid a lengthy and expensive court probate process. Trusts can also enable more detailed instructions on how your assets should be managed and disbursed. Selecting the right type(s) of trusts is key to achieving your intended outcomes.

What Common Estate Planning Documents Do You Need?

So, which of these common estate planning documents will you need? It truly depends on your personal requirements and goals. The plan for a single person will vary from that of a married couple with children, a divorced person, or someone with children from previous marriages.

Additionally, special circumstances such as providing for long-term care of a disabled dependent, minimizing estate taxes, gifting strategies, and anonymity must be taken into consideration. Every estate plan is unique to the individual and must be reviewed and changed as one’s life circumstances change. If you’re interested in creating an estate plan, contact our team to schedule a free consultation.

An estate plan is something that most people procrastinate on or don’t think they need. In reality, everyone needs and should have one. It’s the best way to protect your assets and your family. Here are 5 reasons to create an estate plan.

1 – Bypass Probate

When someone passes away, their estate must go through a court process called probate. The court reviews the will (if one exists), designates heirs, grants power to a personal representative (executor), allows debt collectors to file claims, etc. This process can take anywhere from a few months to several years. During that time, your assets are essentially on hold. Certain estate planning instruments, such as trusts, can bypass the probate process and allow beneficiaries to receive assets sooner. Thus, it’s one of the most important reasons to create an estate plan.

2 – Retain Privacy

Since probate takes place in the courts, the details of your estate (including assets, debts, and beneficiaries) become part of public record. By having an estate plan designed to avoid probate, you and your family can retain privacy. Beyond the obvious desire to protect your information, this is also important for safety reasons. Keeping details on who gets what from your estate reduces the chances that your heirs will be targeted by those who wish to take advantage of their inheritance.

3 – Select Beneficiaries & Avoid Unwanted Heirs

Another of the most important reasons to create an estate plan is to select beneficiaries. Otherwise, again, the courts will decide. In Massachusetts, there’s something called Intestate Succession. Determination of legal heirs is based on whether you are married, have children (from the current or previous marriage), and/or have living parents. In many cases, Intestate Succession rules may result in unwanted heirs. It’s always better to specifically designate your heirs. An estate plan will help you do that.

4 – Control Distribution of Assets

Lump sum inheritances can be risky, especially for beneficiaries who are still young adults. In fact, even older adults are likely to make poor financial decisions with an inheritance. Lottery winnings are the perfect example of what can happen. Many lottery winners end up in bankruptcy a short time after. One way to ensure this scenario doesn’t occur with your beneficiaries is to create a trust with instructions to distribute funds over a period of time until they reach a certain age, at which point they receive the remaining inheritance outright.

5 – Save Money

Last, but certainly not least, an estate plan will save you money. Yes, there is a fee to create the estate plan and to keep it updated as changes occur in your life. However, this is significantly less than what it will cost your heirs to hire an attorney to manage the probate process if you don’t have a proper estate plan in place. Additionally, a proper estate plan can also maximize the value of your estate by minimizing taxes. Ultimately, these efforts will preserve your assets and provide more financial benefit to your beneficiaries.

More Reasons to Create an Estate Plan

These are just 5 of the many reasons to create an estate plan. If you own a business, have a blended family, or have other unique circumstances in your life, those are equally important reasons to have a plan in place. Despite common belief, estate planning is not just for the rich. No matter what your income bracket, if you have children or other family members that rely on your support, an estate plan is essential to their future and well-being. You/they can’t afford not to have a plan!

Contact our team to schedule a free estate planning consultation. There’s no obligation. We’ll review your personal circumstances and make recommendations on how to best protect your assets for the benefit of your heirs. By understanding your options and the benefits an estate plan offers, you can make an informed decision on how to best proceed.

A will allows you to designate heirs to your estate in the event of your untimely death. Without a will, it can be a bit more complicated and may not be in line with your personal wishes. Below is an overview of what happens when you have no will in Massachusetts.

Heirs to Your Estate | What Happens When You Have No Will

Massachusetts state law determines who are legal heirs to your estate when you have no will. Several factors come into play such as whether you are married, have children, and/or if your parents are still living. Here are a few common scenarios:

• Married with No Children – If your parents are still living, they are equal heirs with your spouse. Only in the case where you have no living parents would your spouse be the sole heir.
• Married with Children –  Your spouse will be the sole heir to your estate.
• Married with Children from Previous Marriage – Your spouse and your children from the previous marriage will be equal heirs.
• Married with Children from Current and Previous Marriage – Your spouse and children with that spouse are equal heirs. Your children from previous relationships do not have any rights to your estate in this case.

Beneficiary Rights & Percentages

In the state of Massachusetts, the percentage of rights to an estate depend on how people are related. Those equally related receive equal benefits. For example, if you have 4 children, each receives a 25% share of your estate. If some of your children are deceased, then their rights would pass down to your grandchildren. However, all grandchildren beneficiaries must receive equal percentages as well, compared to one another.

For example, if you have 4 children: Sam, Bill, Jen, and Steve, all should receive a 25% share. Let’s say Bill and Jen are deceased. Bill had 1 child and Jen had 2. Bill and Jen’s combined 50% share will be equally split among the 3 grandchildren. Bill’s child does not receive Bill’s full 25% share since all grandchildren are equally related and must therefore receive an equal share.

Why Wills Are Important in Massachusetts

If the above scenarios do not comply with what your personal wishes would be, then it is critical that you prepare a will. Within your will, you may designate specific heirs and percentages. Heirs do not have to be related to you and do not need to have equal rights to other heirs. It is completely within your power to use whatever reason or logic that you wish for designating your beneficiaries.

A durable power of attorney is a legal document assigning an individual (referred to as the agent) to act on your behalf when you are unable to do so. It is usually created as part of an estate plan, but it can also be applied to everyday matters. This blog covers details on durable power of attorney in Burlington MA.

Durable Power of Attorney Scope

A durable power of attorney may be all inclusive or specific. You may grant the agent complete legal rights to make any decision that you can legally complete yourself. The other alternative is to limit the agent to particular items such as health care decisions, financial tasks, business operations, etc. An attorney can write the durable power of attorney to include your specific preferences. The roles outlined can get activated immediately or only if you become incapacitated.

Agent Selection

Defining an agent is of critical importance. The agent will complete your responsibilities when you are not capable of doing so and will not be able to supervise their actions. Be sure to select someone who is not only able to take on the role but also understands your preferences and is trustworthy. Many individuals refer to a member of the family or close friend.

Getting Started with a Durable Power of Attorney

It is important to prepare a durable power of attorney when you are legally competent. When an illness or tragic event takes place that affects your judgement, it then may not be possible to create one. As a result, your family may be left powerless. This Details On Durable Power Of Attorney In Burlington MA article is provided for reference only. There are other documents that can be created as part of an overall estate plan. Please speak with an experienced attorney for guidance on your particular situation.

There are various types of trusts that can be used for estate planning. ABC Trusts are one available for the benefit of surviving spouses and accounts for differences in all tax exemptions. Below is an overview of Burlington MA ABC trusts to better explain this option.

Advantages of ABC Trusts

ABC Trusts are a form of irrevocable trusts. They are helpful in states where the estate tax exemption allowed is less than the federal one and the estate value exceeds both exemption levels. It permits an estate to take full advantage of federal exemptions while deferring a specific amount of state taxes until after the surviving spouse dies.

Examples of How They Work

ABC trusts separate assets into 3 trusts. The B trust holds the exact amount exempted by the state. The remainder of assets up to the federal exemption level are entered into the C trust. Anything above the federal level go into an A trust. For example, assume that you have an estate with 7 million dollars and live in a state with an tax exemption of 1 million dollars (compared to the federal 5 million exemption). The following may take place:

• B Trust of 1 Million
• C Trust of 4 Million
• A Trust of 2 Million

The B and C trusts benefit from the federal tax exemption. The B trust is exempt from state taxes. The C trust postpones state taxes until the surviving spouse passes away. The A trust does not benefit from any exemptions.

Help With ABC Trusts for Burlington MA

This overview of Burlington MA ABC trusts includes only a basic explanation. There are other considerations when it comes to planning an estate. For expert advice, it is important to speak with a local Burlington MA estate planning attorney. Your attorney can review your personal situation, explain all of the options, analyze tax implications, and create a plan that best fits your needs. Feel free to contact Peter DaMore at Law Offices of Peter T. DaMore Jr. by calling 781-229-7900 for information.

A living will is a legal document specifying your wishes relating to life support. It informs your family members and doctors of your decisions in the event that you not able to communicate. It is usually created in an estate plan but may also function separately. This blog includes an overview of living wills in Massachusetts.

What Living Wills Include

Living wills allow you to indicate what types of treatments you wish to have or want not to have when your condition is dire,… such as requiring life support or experiencing a terminal illness. Some requirements for living wills may differ by state, so it is important to use a local attorney. Your attorney can also provide you with additional options.

When Living Wills Take Effect

Living wills become effective only when you are incapacitated AND your condition is dire. Normally, a doctor must verify that you are in such a state. It does not apply to other less serious medical conditions such as heart attacks. For scenarios where the prognosis is not severe but you are unable to express your wishes, you may have a health care proxy that designated another party to make decisions for you. These are two independent forms and are effective under separate situations. Together, they make up an advance health care directive.

Livings Wills for Massachusetts

Living wills ensure that your wishes are observed. Situations may result from predetermined illnesses or an entirely unpredictable circumstance. It can alleviate the burden on family members or prevent them from disputing over what to do. It is best to decide when you are in the right state of mind. This was an overview of living wills in Massachusetts and is published for general reference only. Please consult with an attorney for additional information and advice.

Irrevocable trusts cannot be revised after they are established. Revocable trusts also become irrevocable after the trustmaker dies. Irrevocable trusts may be comprised of multiple agreements each with a different goal. The following are details on the types and goals of irrevocable trusts including reducing estate taxes, protecting assets, and charitable donations.

Types And Goals Of Irrevocable Trusts

Reducing Estate Taxes

An irrevocable life insurance trust is one way of transferring property from an estate in order to reduce estate taxes. The person who owns the assets and sets up the trust basically transfers their belongings into the trust (to the trustees and beneficiaries) and therefore no longer possesses the assets personally. Those belongings therefore cannot be taxed as part of the estate when that trustmaker passes away.

There are other trusts that can accomplish this same benefit. AB trusts can used to benefit a surviving spouse for a certain exempted amount plus deferment of estate taxes for amounts exceeding the limit. ABC trusts are helpful in states with estate taxes and are helpful when the state tax exemption amount is lower than the federal one.

Protecting Assets

Most irrevocable trusts can protect family assets. Since property is transferred into the trust and are no longer personal assets, they are hidden from creditors and others who may file personal claims against the trustmaker. Family members can be made the beneficiary of the trust and would still receive the benefit from those assets. This may be an important feature for certain people based on their profession and potential liabilities.

Charitable Donations

A few types of irrevocable trusts are specifically created for charitable donations. Examples of this are charitable remainder trusts and charitable lead trusts. Trustmakers can transfer assets into a charitable trust while living and obtain a charitable income tax deduction for the tax year. If the transfer takes place after death, then the estate will obtain the tax deduction.

More Information On Irrevocable Trusts

If you are comparing revocable and irrevocable trusts, it is important to understand their differences and benefits as it applies to your personal situation. The above types and goals of irrevocable trusts is merely intended as a basic overview. Contact Peter DaMore at Law Offices of Peter T. DaMore Jr. for further information about trusts and other pieces of your estate plan.

Revocable living trusts allow for changes at any time. A trust amendment can be created to edit certain provisions or beneficiaries. It is also possible to void or modify the entire contents of the trust through an amendment and reinstatement. The following is advantages and disadvantages of Massachusetts revocable living trusts.

Revocable Living Trusts

The downside of revocable living trusts are that assets in the trust are treated as personal assets. It therefore offers no special protection from creditors if you are sued. Upon death, all assets are subject to any state and federal estate taxes. Depending on your finances, these two items can result in significant risk or loss.

Reasons to Use Revocable Living Trusts

There are a few reasons why you would select revocable living trusts despite the disadvantages noted above. Below are the key reasons that many select this type of trust.

Planning for Disability

Revocable living trusts are often used to plan for future disability. Assets in a revocable trust can be managed by a trustee rather than by a court-assigned guardian in the event of mental disability. This can be an important factor when there is a family history of mental illness.

Avoiding Probate

The type of trust will determine whether the courts get involved. With revocable living trusts, assets are given directly to beneficiaries without going through a court proceeding. This shortens the transfer process and time frame.

Privacy Considerations

Because transfers take place outside of court, the trust agreement does not get filed into public record. Detailed information on your assets may therefore be kept private. The identity and assets transferred to specific beneficiaries is also not disclosed. This maintains the privacy of everyone involved.

More Advantages And Disadvantages Of Massachusetts Revocable Living Trusts

The advantages and disadvantages of Massachusetts revocable living trusts provided above was shared by Peter DaMore at Law Offices of Peter T. DaMore Jr.. For additional information on revocable living trusts and other elements of your estate plan, contact Peter at 781-229-7900 or via email at pdamore@ptdlaw.com. We can explain the benefits of revocable living trusts and irrevocable trusts and help you select the option that best accommodates your situation.