April 22, 2018

Estate & Probate Blog

Back to School: Essential Estate Planning for College-Age Students

For many, starting college often marks the entry into young adult hood. For many students, this will be the first time that they are living away from home.   For those young adults who are over the age of eighteen, this is also the perfect time to execute advance directives and a financial power of attorney to ensure that their affairs may be taken care of in the event of disability, illness or accident. Here are three documents to put on your “back to school” list:

Health Care Proxy: A health care proxy grants an agent to make healthcare or medical decisions for you when you are no longer able to make them yourself. A health care proxy is often referred to as a “springing” document because it takes effect only after your doctor declares you incapable of making health care decisions. Until such time, you make your own healthcare decisions. Without a health care proxy there is no certainty that another individual, such as a parent, will have the legal authority to make decisions for you if you are unable to do so and may even be limited in the kind of information they may receive from medical professionals. [Read more…]

Lifestyles of the Rich and Famous?

By Attorney Jennifer Taddeo

Recently, actor Philip Seymour Hoffman died of an apparent drug overdose. While his life may not have been like yours or mine, there are some lessons to be learned from his estate planning – sadly, the lessons are “don’ts” rather than “dos.”

First, the fact that we as members of the public know anything about his estate planning means that simple steps were not taken to remove his estate from the probate court system, which would have afforded his longtime companion and their children a measure of privacy. Simply by creating and appropriately funding the right type of trust, this could have been avoided.

His will, being some 10 years old, may cause some confusion as it refers only to the oldest of his three children. State law addresses that by splitting any bequest to a child among that child and all of the afterborn children, but Hoffman may have wanted to leave the same amount to each of his children had he consulted with an experienced estate planning advisor. [Read more…]

Parameters of “Health Care Decisions” Under the Health Care Proxy Statute

The Massachusetts Supreme Judicial Court recently decided two cases which touched upon an issue that many medical facilities and health care providers encounter on a regular basis.  Specifically, the SJC addressed the issue of what constitutes a health care decision that can be made on a patient’s behalf by a party acting under a health care proxy.

In the Johnson v. Kindred Healthcare and Licata v. GGNSC Malden Dexter LLC cases, the Supreme Judicial Court decided whether a health care agent’s actions could bind a patient to an arbitration agreement with a medical facility.  In both cases, the health care agent signed an arbitration agreement on behalf of an elderly relative.  The SJC held that signing an arbitration agreement was not a “health care decision” as the term is defined in the Health Care Proxy Statute.  Notably, the SJC explained that health care decisions are limited to those decisions that “directly involve the provision of responsible medical services, procedures, or treatment of the principal’s physical or mental condition.”

[Read more…]

It Depends Upon What the Meaning of “Permanent” Is

By Attorney Jennifer Taddeo

Throughout this year, many estate planning meetings have been kicked off by clients telling me that since Congress permanently set the federal estate tax exemption at $5 million, indexed for inflation ($5.25 million in 2013), there was no need to talk about estate taxes.

I always point out, first, that the Massachusetts estate tax exemption remains at $1 million with no anticipated change. Then I explain that, while I don’t expect it to change, “permanent” in this case does not mean that it can’t change. What Congress did in early 2013 was to remove any expiration date from the estate tax laws. For the first time in over 10 years, we had no concerns about “sunsetting” provisions or countdowns. However, Congress has the power to change the laws that it makes.

Earlier this month, President Obama presented his 2014 budget . In this budget, there is a proposal that, beginning in 2018, the federal estate tax exemption drop to $3.5 million, only $1 million of which could be used during lifetime, and neither figure would be indexed to inflation. Further, the proposal calls for an increase in the estate tax rates, with the top rate rising from 40% to 45%. A number of estate tax planning and minimization tools are targeted in the proposal as well.

A proposal is a long way from a law, however, the existence of a proposal to change a law passed only 4 months ago is a reminder that estate planning must be revisited regularly to insure that your plan remains appropriate based upon changing laws and changing circumstances.

Congress Rings in 2013 With Gift and Estate Tax Changes

By Attorney Jennifer Taddeo

After sessions lasting late into the night on New Year’s Eve and New Year’s Day, Congress has passed a tax bill that, among other things, resolves the past few years of uncertainty for gift and estate tax planning. Just before the ball dropped on 2012, we had a $5.12 million federal gift and estate tax exemption and a tax rate of 35% on each dollar over the exemption. Until this agreement is signed into law, which President Obama is expected to do in the coming days, we actually have a $1 million federal gift and estate tax exemption and a tax rate of 55% on each dollar over the exemption.

The bill being signed into law is retroactive to January 1st and keeps the federal gift and estate tax exemption amount at $5.12million, while bringing the tax rate for every dollar above that to 40%. The exemption amount is tied to inflation and will increase automatically in future years. Unlike the last few changes to the gift and estate tax laws, this change is permanent – meaning there is no scheduled end to this exemption amount or this tax rate. However, Congress could revisit this issue at any time and make changes. [Read more…]

What Does the Fiscal Cliff Mean for Estate Taxes?

Many tax laws passed in 2001 as part of the Economic Growth and Tax Relief Reconciliation Act (“EGTRRA”) will expire on December 31, 2012. Under this current law, each individual has a federal estate tax exemption of $5.12 million, and the federal estate tax rate is 35%. This means that spouses could give away a total of $10.24 million whether during their lifetimes or upon the death of either spouse with no gift or estate taxes incurred, and each dollar after that would be taxed at 35%.

If Congress takes no action on this matter before January 1st, then the laws we wake up to on New Year’s Day will be quite different – the federal estate exemption will fall to $1 million, and the federal estate tax rate will increase to 55%. This means that spouses with a combined estate of $3 million would pay no federal estate tax if they both died on December 31st, but $550,000 if they both died on January 1st with a properly structured estate plan.

As a result, many of our clients with family assets exceeding $2 million or individual assets exceeding $1 million are considering making gifts prior to the end of the calendar year. It is very important that these gifts are structured correctly and that the gift is completed prior to January 1st. It is also important to remember that the taxable estate includes assets such as life insurance proceeds, retirement assets and equity in real estate, not just cash and investment accounts. Please contact us immediately if you are interested in making a transfer.

Trusts and property transactions for minors and incapacitated adults

By Attorney John Dugan

Until recently, a family member or friend had to be appointed conservator to protect or manage property for a minor child or mentally incapacitated adult. This required expensive and time-consuming court filings, appointment of a guardian ad litem, annual accounts, filings, audits and court expenses, and public disclosure of values and finances.

Courts can now approve protective arrangements or single transactions for property of a minor child or incapacitated adult without a conservatorship. The new law can be found at Mass. General Laws, Chapter 190B, Section 5-408.

This law can be very helpful where:

  • a minor or incapacitated adult recovers funds for a claim or lawsuit
  • a minor or incapacitated adult inherits money or real estate
  • real is to be bought, sold or mortgaged for a minor or incapacitated adult
  • Money belonging to a minor or incapacitated person is to be put into a trust

Some people have powers of attorney that designated a trusted agent to manage money and property if the principal becomes senile or mentally incapacitated. However, situations often occur where the power of attorney does not allow the agent to create a new trust, or take out a reverse mortgage, or buy or sell real estate. The new law can expand the power of attorney, or give a family member or friend authority to conduct business for a minor or incapacitated adult without a conservatorship. [Read more…]

Actual Results Expected as Massachusetts Embraces Virtual Representation

Massachusetts recently adopted the Uniform Probate Code (M.G.L. ch. 190B) and the Uniform Trust Code (M.G.L. ch. 203E).  These codes are intended to modernize the state’s Probate and Trust laws, and make the administration of trusts and estates less costly and more efficient.

One important feature is that both codes embrace the concept of “virtual representation.”  Historically, Massachusetts courts have appointed an attorney, called a guardian ad litem, to represent minors, mentally incapacitated adults and unborn heirs with respect to their rights in trusts and estates. Virtual representation provides that if a minor, mentally incapacitated adult or unborn heir has an interest that is substantially the same as the interest of a competent adult, the competent adult can represent and speak for those persons. For example, a parent could represent his or her children’s interests. The children, incapacitated adults or unborn heirs will be bound by the decisions made by their representative. If the court determines in any case that there is a conflict of interest or that their interests are not substantially the same, the court can still appoint a guardian ad litem to represent and protect those interests.

Virtual representation should reduce the court’s use of guardians ad litem in many cases where such representation is appropriate, and reduce the cost and time of processing the trust or estate through the court system.

Will Contest or “In Terrorem” Clauses

Estate and trust disputes may take months or years to resolve, with litigation costs consuming a huge part of the estate. This frustrates the whole purpose of your estate plan, and diminishes the benefits that will pass to the persons you care about.

Massachusetts law allows you to put language in your will so that anyone contesting the will or any of its provisions will forfeit all rights and benefits under the will.

Heirs who are specifically excluded from any benefit under a will may decide there is nothing to lose by filing a challenge to the will in court. However, if those same heirs are designated to receive a specific benefit under the will, they must consider whether filing a claim is worth the risk of losing the benefit.

There is no way to guarantee that a will or trust will avoid all possible challenges or disputes, but a well-drafted In Terrorem clause can make potential challengers think twice before filing a claim and improve the likelihood that the will can be filed and processed as you plan. [Read more…]

The Ed/Med Gift Tax Exclusion and Infertility Treatments

The following blog post by Attorney Jennifer D. Taddeo was originally published by Fertility Within Reach

For many families struggling with infertility, the financial assistance of their families can be a lifeline in the efforts to build their family.  A parent, grandparent or any other person may wish to assist with these expenses, but may be concerned about the gift or estate tax consequences of such assistance.  Within certain guidelines, payment of the expenses can have no gift or estate tax consequences.

Under Section 2503(e) of the Internal Revenue Code, people may pay for certain educational and medical expenses of others without incurring any gift tax or using any of the $13,000 annual exclusion.  This exception to the gift tax is frequently referred to as the “ed/med” exclusion.  Parents who are concerned about estate and gift taxation may use this exclusion to transfer value to their children above and beyond their annual exclusion gifts so long as certain rules are followed.

[Read more…]

Something New to “Like” About Organ Donation

As discussed previously on this blog, it is important that, in addition to registering your organ donation wishes with the Massachusetts Donor Registry and Donate Life New England, you discuss your organ donation wishes with your family and friends so that your wishes are carried out. Well, for those of you on social media, doing so just got a little easier. Check out these articles about Facebook’s new organ donation project from Forbes.com and Slate.com and NPR.org.

As of May 1st, Facebook is allowing its members to share their organ donor status and share their reasons for becoming an organ donor. Additionally, if you are in the United States or the United Kingdom, once you tell Facebook that you are an organ donor, you are directed to online registries to formalize your status. Of course, you should continue through and complete the donation. However, simply stating that you wish to be an organ donor on your Facebook timeline sends a powerful message to the family members who will have to give final approval for the donations.

If you do wish to have your organs donated, take the time today to register with the donor registries, consider sharing your organ donor status on Facebook and, of course, engage your loved ones in a discussion about your wishes.

Making Surrogate Health Care Decisions

Every health care decision requires an understanding of the patient’s condition, and the benefits and burdens of the proposed treatment. Most people have strong feelings and beliefs about when and to what extent they would accept invasive or aggressive treatment. The decision is more difficult for patients who cannot understand or communicate their wishes, due to physical or mental incapacity. Still, the decision must be made.

If there is no one who can legally speak for the patient, the law requires that a guardian be appointed by the court. The court will authorize the guardian to make treatment decisions, sometimes adding instructions or limitations as to how the guardian may act. Guardianship can be a time-consuming and expensive procedure, but the court will expedite the process if there is a medical emergency.

A simple alternative to guardianship is a health care proxy. The person creating the proxy (“Principal”) appoints another person (“Agent”) to make medical and health-care decisions, if the Principal becomes unable to do so. The Principal can also designate an alternate Agent, in case the primary Agent is not available.  [Read more…]

Medicaid/MassHealth Update: Your Spouse Can Now Keep More

Applicants for Medicaid, as administered by MassHealth here in Massachusetts, can only qualify for the program when they have sufficiently “spent down” their assets.  Many people are familiar with the rule that the applicant may have only $2,000 worth of countable assets at the time of the applicant, and that the spouse of the applicant may keep a larger amount of countable assets.  Last year, this amount, known as the community spouse resource allowance (“CSRA”) was $109,560.  As of January 1,2012, the CSRA has increased to $113,640.

There have also been increases in other allowances, such as the minimum and maximum monthly maintenance needs allowance and the community spouse monthly housing allowance.   For questions about Medicaid/MassHealth eligibility, or any other estate planning or elder law questions, contact one of the Massachusetts estate planning or elder law attorneys at the Franklin, Massachusetts law firm of Doherty, Ciechanowski, Dugan & Cannon, P.C.

Give It Your All

By Attorney Jennifer Taddeo

In my experiences working with clients to create and implement their estate plans, we often spend time discussing issues that can not be addressed in their basic legal estate planning documents – their will, trust, health care proxy, durable power of attorney or declaration of homestead.  While I can not offer legal solutions to these concerns, I always seek to provide practical guidance.

One question that many people ask is how to communicate their wishes about organ donation – and how to make sure those wishes are honored.  As previously discussed on this blog, I encourage all clients to discuss their health care wishes with their families .   This is a perfect time to also discuss your beliefs about organ donation.  Would you want to be an organ donor?  Are there organs you would not want donated?  Your family should be able to answer these questions and understand your reasoning, so that, during a crisis, they could confidently make the decisions to put your wishes into action. [Read more…]

Have the document, then have the conversation.

We have all read the articles – sad stories about families torn apart because loved ones disagree about what medical steps to take – or not take – at the end of life. In some cases, the ill person had no legal documents about his or her care. In others, documents exist, but family members disagree about what the person wanted. That is why I offer everyone the same advice: have the document, and then have the conversation.

Working with an attorney to prepare and execute a health care proxy means that there will be clear legal direction as to who is empowered to make medical decisions when you can not make them for yourself. Here in Massachusetts, you can only name one person to serve at a time, but you can provide a list of people so that there is always someone to step in. [Read more…]

Statute of limitations for claims against a decedent’s estate

Creditors have one year after death to collect on debts owed by the decedent. For example, if the decedent owed $10,000.00 on a credit card, the card-holder must file a claim within a year of death, or the debt will become uncollectable.

A creditor can file a request for relief from the one-year statute of limitations directly to the Massachusetts Supreme Judicial Court. If the Court decides that the claim has merit and that the creditor was not negligent in failing to file on time, it may allow the creditor to file a late claim.

This one-year statute does not apply to debts incurred after the person died, such as funeral services, post-death house repairs, or an obligation that was not due and payable until after the person died. [Read more…]

In the State we trust?

Many families ask me why they even need an estate plan.  Won’t their spouse simply receive all of their assets and be able to make all decisions?   What these families do not realize is that every person has an estate plan – but if they have not created one of their own, they have the one created for them by the Commonwealth of Massachusetts.  Our great state has some strengths and some weaknesses, but I’m pretty sure I do not want it creating an estate plan for my family!

As the law currently stands, without a will, a surviving spouse does not automatically receive all assets when their spouse dies.  In fact, they may end up owning assets jointly with their children or, if there are not any children, with their in-laws.   No estate planning documents also mean a lack of direction about fiduciaries – who should be in control of the estate, the children, health care decisions, etc.  It also means that assets passed along are available to the creditors of the people who receive the assets, and may be subject to the oversight of the Probate Courts for years to come. [Read more…]

What is a conservator?

A conservator is appointed by the court to manage a protected person’s property. A protected person is someone who is clinically diagnosed to be unable to manage property, and whose property may be wasted unless a conservator is appointed.

The Massachusetts Probate and Family Court has jurisdiction over conservatorship proceedings, under Part 4 of Mass. General Laws, Chapter 190B, the Massachusetts Uniform Probate Code.

A petition for conservatorship must be filed with a medical certificate, signed by a qualified medical expert, indicating that the individual’s capacity is so impaired that a conservator is needed to avoid waste, dissipation or financial exploitation.

[Read more…]

Who has the right to plan my funeral?

August 1, 2011 | by Attorney Jennifer Taddeo:

The goal of estate planning, for most people, is to arrange their affairs in a way that will benefit their families, and allow their family to flourish after their death.  Most of us are not contemplating our loved ones fighting over where and how our body is laid to rest.  Sadly, this does happen, and can continue for years after a death, as illustrated by a recent piece on National Public Radio and, as many of us remember, the very public family disagreements following Red Sox legend Ted Williams’ passing.

In Massachusetts, a person’s “next of kin” has the right to dispose of his or her remains.  This means that a spouse – even an estranged spouse – will have this control.  If there is no surviving spouse, adult children, collectively, will have this right.  The control then moves to parents, siblings, and continues on, perhaps to distant relatives if there are no close surviving relatives.

[Read more…]

If a deceased person resided in one state but owned property in another state, which laws determine who will inherit the property?

If the person had a valid will, the will determines how the person’s property will pass. Each state has its own requirements for execution of a will, but all states accept a will that complies with the laws of the state where the person resided when the will was signed.

If a person dies intestate (without a valid will), the laws of the state of residence determine who will inherit personal property. “Personal property” is all property that is not real estate (cash, bank accounts, stocks, bonds, furniture, cars, collections, jewelry, etc.). This rule applies to all personal property located in any state. For example, if a Mass. resident had bank accounts in Florida, the funds in the Florida accounts will pass according to Mass. law.

[Read more…]

3 Critical Documents Every College Freshman needs

September 15, 2010 | by Attorney Jennifer Taddeo:

College freshman everywhere are settling into their residence halls and high school seniors are eagerly anticipating being next. Moving on to college is an important milestone for young adults, but it is important not to lose sight of other turning points along the way as parents and students prepare for college. An important checkpoint is the student’s 18th birthday – the point in time when the law sees the student as a full adult, whether or not the student is still living at home or even still in high school.

[Read more…]

Attorneys in Franklin Massachusetts and Medfield MA lawyers

The Massachusetts attorneys of Doherty, Ciechanowski, Dugan & Cannon provide legal services to Massachusetts businesses, families, and individuals in the practice areas of business law, criminal defense, divorce and family law, employment law, estate planning, personal injury, real estate, and litigation matters.

Our attorneys represent clients throughout Massachusetts and in every county of Massachusetts including Norfolk County, Suffolk County, Worcester County, Bristol County, Middlesex County, Plymouth County, Hamden County, Essex County and Barnstable County. Our attorneys represent clients in Massachusetts’ largest communities including the cities of Boston, Worcester, Springfield, Lowell, Cambridge, Brockton, New Bedford, Fall River, Lynn, and Quincy.

Our law offices are located in Franklin and Medfield and serve the Greater Boston MetroWest region and the neighboring towns of Bellingham, Milford, Upton, Hopedale, Holliston, Medway, Millis, Medfield, Norwood, Walpole, Sharon, Foxborough, Wrentham, Easton, Mansfield, North Attleboro, Norton, Plainville, Raynham, Taunton, Attleboro, Seekonk, Rehoboth, Uxbridge, Whitinsville, and Worcester.