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Salem Massachusetts Estate Planning Law Blog

Challenges for those who administer a loved one's estate

In Massachusetts, as elsewhere, it can be difficult to administer the estate of a deceased loved one. While there are professional executors out there who may be of benefit, especially when dealing with unreasonable heirs, one may nonetheless wish to handle the process alone. In this case, there are challenges to be aware of, some of which are given below.

The tasks of an executor require that one be adept at project management. There will be short deadlines to meet. The estate may be probated, but if the loved one was "financially comfortable" and married, it is likely that the couple placed their most valuable assets into a revocable trust.

Who is the right person to be your health care proxy?

If you have accepted the challenge to create a comprehensive plan for your estate, you have quickly realized that the process can be quite complex. It often involves some deep soul searching to find the answers to complicated questions regarding the end of your life.

One question you may be considering is, "Whom should I choose to be my health care proxy?" Since the person in this role has many delicate decisions to make on your behalf, you do not want to make this choice hastily or before examining every logical possibility.

What to know about funding a trust

In many cases, a Massachusetts resident who has a trust won't necessarily need a will. This is because the trust has many of the same testamentary capabilities as a will. However, the estate owner should remember that a trust needs to be properly funded before they pass on. Otherwise, a bank account, home or other asset must go through the probate process. During the probate process, a judge determines who an item should go to.

If a person lacks a valid will, there is a chance that state law will dictate who receives property held in their estate. Individuals can create what is known as a pour-over will. The will states that any assets that are left in an estate at the time of a person's death should be placed into a trust. It's worth noting that a pour-over will is the same as any other will, which means that it may need to go through probate.

How to start the estate planning process

Estate planning may be an uncomfortable task to undertake. However, all Massachusetts residents will die at some point. Therefore, it is important to take time to determine how assets will be distributed after this happens. It can also be a good idea to think about what a person would want if he or she became mentally or physically incapacitated. An estate plan can be structured so that another person can make decisions for an incapacitated individual.

Proper planning may also make it possible to minimize the tax burden that surviving family members will need to endure. It can also help to protect assets from creditors who may make claims on money or property that was meant for a spouse or child. These and other questions may be easier to answer when a person is organized. Ideally, an individual will take time to gather financial records and other important documents.

Protecting heirs from themselves with spendthrift trusts

Some trust beneficiaries in Massachusetts are capable of responsibly handling trust assets. However, others are a bit more reckless with their spending. For times when a trust creator (grantor) wants to protect intended heirs from themselves, one option is what's termed a spendthrift trust.

A spendthrift trust is an estate planning tool that's overseen by a trustee. This can be a specific individual or a corporate trustee. The trustee's role is to control disbursements from the assets in a trust. An asset management business can also serve as a registered investment advisor to invest money that's in the trust. The beneficiary would not be able to access any of the trust's money until it's time for them to receive distributions. The trustee would also have the discretion to determine which payments are necessary based on the terms of the trust agreement.

Chronic illness and estate planning

Chronic illness affects more than 130 million Americans. However, many families in Massachusetts dealing with conditions like multiple sclerosis, Alzheimer's or Parkinson's don't reflect this reality in their estate plans. As a person ages, their chances of being impacted by chronic illness rises quickly, but people of all ages should account for present and possible conditions in an estate plan. This means including provisions for a variety of issues related to health and aging.

A very important document for families dealing with a chronic illness is a HIPAA release. The person named in this release will be able to access protected health information that would normally be sealed. This allows family members or other trusted parties to make crucial health care-related decisions for someone suffering from cognitive impairments. This release needs to be in writing, and the person giving away their protections to another party needs to show that they are doing so voluntarily.

Have you funded your assets to your revocable trust?

If you are one of the few adults in Massachusetts who have visited a legal professional to start the process of making an estate plan, you deserve a hearty congratulations. Not only are you protecting your wishes for your assets and belongings, but you are also saving your loved ones the confusion and frustration of dealing with an unprepared estate.

As part of a complete estate plan, you likely drafted a will, designated a power of attorney and created a revocable living trust to hold your assets, minimize probate and protect your estate's privacy. However, once you create the trust, your work does not end. If you fail to fund your assets to the trust, your document will be worthless to your heirs.

About transfer on death accounts

Massachusetts residents can include transfer on death accounts in their estate plans to help their beneficiaries avoid having to go to court to resolve issues with the estate. These types of accounts can be used to move assets without having them included in a will, which can be helpful for people without a will or trust.

A transfer on death account is used to automatically transfer the assets it contains to the designated beneficiaries upon the death of the holder. Depending on the laws of the state, it can be various types of bank accounts, deeds or investment accounts. For individuals who own just a portion of a transfer on death assets, only the shares they own will be transferred.

Why individuals should consider a trust

Individuals in Massachusetts and throughout the country typically use a will to transfer their assets upon their deaths. However, it may be a good idea to use a trust to do so instead. A trust is managed by a person or entity that has a fiduciary responsibility to the beneficiaries of that document. This means that the trustee has to take actions that meet a beneficiary's interest and cannot engage in self-dealing.

Trustees must provide information about the trust and how it is being administered to a beneficiary upon request. There are many reasons why an individual could want to make a trust beyond the fact that it would be managed by a trusted person or entity. In addition, it could be used to protect assets from creditors, manage a business or keep the details of an estate private. When a person transfers assets through a will, it generally must go through a public probate process.

Estate planning for digital assets

When people living in Massachusetts begin to plan their estates, they are often concerned with personal property, real estate, savings accounts and investment funds. One group of assets that is frequently overlooked is digital assets, including email and social media accounts, online shopping profiles and digital content such as music.

Because digital assets have only been a matter of significant concern for a few decades, many people have not considered the ramifications of dying and leaving behind unattended accounts and digital products such as music, books and movies. In addition, the legal status of digital assets and intellectual property has been in flux for a significant period of time. This can lead to confusion regarding ownership and how digital content can be used by others.

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