Estate Planning

From a Simple Will and Health Care Proxy to Preserving Wealth, Establishing Trusts, and Gift Giving

The firm offers an expansive variety of estate planning services, including the drafting of wills, living trusts, irrevocable insurance trusts, durable powers of attorney, health care proxy, and many other related documents. The firm also offers advice on planned gift giving, including charitable giving, and prepares the appropriate documentation, including charitable remainder trusts and charitable foundations.

Each estate plan which is prepared is designed specifically for each client with a number of factors in mind, including the client’s general wishes regarding the disposition of assets, the potential estate tax ramifications, and the desire to minimize administrative costs.

Your Unique Estate Plan

In general, Estate Planning involves summarizing how you want to distribute your assets upon your death. If you fail to make appropriate decisions now, your estate may pass in unintended, and perhaps, undesirable ways.

Estate Planning also entails preserving your wealth. If your estate is large enough to be subject to the Federal estate tax (and/or any state estate tax), your estate plan must provide the means to minimize the taxes your family will pay and, at the same time, maximize what passes to your family.

Creating a Will

Your will is the basic starting point of your estate plan. The will governs the ultimate distribution of assets which you own in your own name at death. However, your will should only be part of your estate plan. To be truly effective, your estate plan must be more comprehensive than a simple will. The disposition of your estate will also be affected by the ownership of your assets, e.g., jointly held assets pass directly by right of survivorship and not necessarily under the terms of your will. Additionally, other assets will pass according to the beneficiary designation, e.g., life insurance, Individual Retirement Accounts, pension plans, etc. Addressing the proper ownership of your assets as well as the beneficiaries of your assets is a critical component of any proper estate plan.

Establishing a Trust

Trusts are also an important part of any estate plan. For larger estates that may be subject to estate taxation, trusts can be an effective tool in reducing taxes. Trusts can also be very effective in providing for the disposition of your assets, often avoiding the need for any type of probate administration upon your death. Avoiding probate can save your family significant administrative expenses and expedite the distribution of your estate.

Charitable Giving

Your estate plan may also take into consideration charitable giving. This may take the form of outright gifts upon death and/or some form of trust that can provide income to you for lifetime with your favorite charity receiving the principal at your death.

Durable Power of Attorney and Health Care Proxy

As part of any estate plan, there are other documents that should be included, such as a durable power of attorney and health care proxy.

A “durable” power of attorney is one that would “endure” through any legal disability. Such a power is valuable to have if a person becomes disabled. The power holder (the “attorney-in-fact”) would be able to take care of those matters that need attention which the client is unable to handle due to their legal disability, such as dementia.  One common use is to do last minute planning that will save taxes upon an impending death, e.g., making gifts to reduce one’s taxable estate. It avoids the need to burden a dying patient with legal details. It enables one’s family to arrange matters rather than seeing money wasted because it is impractical (and seemingly uncaring) to bother the ill party with financial matters.

In Massachusetts (and most states) a person can have a health care proxy (similar to a living will).  Such an instrument enables a person to express their intentions about medical care in the event of incapacity. The health care proxy also allows the client to pick a person (and an alternate) as the client’s agent for making medical decisions for when the client cannot act for themself.

Estate Planning Updates

Estate planning may also involve updating estate documents which have been previously executed.  There is no set period of time that would automatically trigger a review, but it is generally advisable to review an estate plan every few years to make sure that it is up to date. Some of the events that indicate that your estate plan may need to be updated include the following:

  • A substantial change in your wealth, such as an inheritance, or a significant appreciation in certain assets included in your estate.
  • Changes in your family–births, deaths, adoptions, marriages, and divorces.
  •  Anticipated changes to the needs of your beneficiaries due to illness, changes in wealth, creditor problems, educational needs, or disability.
  •  A sizeable increase in the value of your retirement benefits.
  • The purchase or sale of a business. (Either event should be reviewed well before the actual transaction to consider all the possibilities.)
  • The purchase of real estate in another state, e.g., a vacation home.
  • The purchase of life insurance. (This should also be reviewed before the actual purchase of any insurance as there are techniques available to provide life insurance benefits without having the insurance included in one’s taxable estate.
  • The possible inclusion of charitable beneficiaries as part of your estate plan. This may include outright bequests to charity upon death, the creation of charitable private foundations, a  charitable remainder trust, etc.
  • Possible changes to your named fiduciaries, e.g., personal representatives (formerly known as executors), trustees, attorneys-in-fact, etc.
  • hanges in the federal and/or state laws.

Schedule a review of your estate plan

Changes can sometimes have a dramatic impact on your estate plan. While most well drafted estate plans should adjust automatically for many possible changes, it is still advisable to review your estate plan periodically. Often times, minor changes can be easily made by a short codicil to your will or amendment to your trust.

Barbara S. Accetta can help you evaluate all your estate planning needs, including the issues only briefly touched upon here, as well as many other issues which may affect you. Each estate is unique and Barbara strives to personalize each client’s estate plan to both minimize taxes and follow the client’s wishes regarding the disposition of his or her estate. Call the office and Barbara can work with you on your estate plan.