What is joint ownership?

Joint ownership, sometimes referred to as joint tenancy, is another method used to avoid probate and can be done by titling accounts as held in “joint owners with rights of survivorship.” You can title almost any type of investment or bank account account or asset as “joint owners” to make sure the surviving joint owner immediately succeeds to the ownership of the account on the death of the first owner. However, there may be assets or situations that require a different approach, as discussed below.

What are qualified accounts and what does this mean for my estate planning?

Qualified accounts are retirement-type investment accounts that receive preferential income tax treatment. Income taxes on qualified accounts are generally tax deferred, which results in taxes that are not paid until funds are withdrawn from the account (however, Roth accounts are an exception because Roth withdrawals are generally not taxed upon distribution).

When considering how to handle the different types of qualified accounts from an estate planning perspective, you have to consider both the tax consequences and the hassle-factor associated with the account.

Do I really need life insurance?

While this question is better answered by your financial advisor - the short answer is generally yes, if you have others who are financially dependent upon you. In other words, if you died and your spouse and/or kids were relying on your income to stay afloat, then you would need life insurance to cover the shortfall until they can reach financial independence. That is why many people get life insurance policies with a death benefit to replace years of income (and maybe pay off all existing debts plus estimated college/education costs). Once again, this is a question best answered by your financial advisor, but that is the common practice (especially among my younger clients). Of course, if you already have millions in the bank, don’t need the liquidity, and/or have no one financially dependent upon you, then that answer will change.

What is probate?

Probate is the legal process that occurs after an individual passes away. Probate consists of: proving in court that the deceased individual’s Will is valid, identifying and inventorying property, having the property appraised, paying any debts and taxes, and distributing the remaining property as the Will directs.

How to select a guardian…

Naming a guardian is the toughest estate planning decision a young family will need to make. If you fail to indicate who you would like to serve as the guardian in your Will, then the court will make the decision for you. That is why every family with young children needs to have a Will regardless of their financial situation. Otherwise, you risk the wrong person becoming the guardian of your minor children. It is important to note that the court will still be involved to make sure the best interest of the child is being served in any case, but the court will look to your Will first in order to make such a decision.

How should your Trust distributions be structured for beneficiaries?

When setting up a trust, you may be concerned about how to structure trust distributions for your beneficiaries after you (the grantors) are no longer living. In other words, what is the appropriate age to distribute trust assets to a particular beneficiary? Should the distributions be split up so they don’t get everything at once? If they do split up distributions, what ages should such distributions take place and in what percentages? What if a beneficiary needs the money earlier than anticipated?

What is a trustee?

A trustee is a person or entity (such as a bank) that is put in charge of certain responsibilities such as: securing the assets of the trust, engaging with a financial advisor or investment firm (or making investment decisions themselves depending on the complexity of the trust assets and the trustee’s personal experience), hiring an attorney to navigate trust compliance, hiring an accountant to prepare state and federal income tax returns for the trust, make distributions from the trust for the payments of bills and expenses, and make a final division of trust and distributions to children once they reach a given age (as instructed in the trust document).

What happens if you don’t create a Will?

Major headaches are inevitable when a person dies without a Will (also known as dying “intestate”). The major issue being that, without a Will, your final wishes are not voiced for the fiduciaries and/or beneficiaries. This lack of instruction then leads to confusion and disagreements among family members and threatens future disharmony. Normally, with a properly drafted Will, there would be a named person to serve as a Personal Representative of your estate, but without a Will, the court will need to rely on statutory law through a formal petition process. This petitioning process then opens the door to an unintended person becoming the Personal Representative of your estate and thereby creating the potential for further chaos. The court will do its best to get the estate settled as fairly as possible, but the timing of when and how things get done can be largely at the discretion of the Personal Representative. The result being that the estate administration could extend years before being completely resolved while racking up legal fees and administrative expenses along the way.

What is the difference between a Will and a Trust?

A will is a written legal document intended to be submitted to the probate court upon your death with instructions on how you want your estate (probated assets and outstanding obligations) administered. A trust is a legal arrangement (generally private whereas a Will becomes public record) with three sometimes overlapping parties (see below) that all play distinct roles. Trusts are created by the “trustor” or “grantor” and instruct the trustee on how to administer assets. Unlike a living trust, which is created during a person’s life, a testamentary trust is established via the Will (in other words, the testamentary trust is created via public court process after a person dies and therefore is not preferred since a living trust can accomplish the same goal without the hassle and expense associated with a testamentary trust).

You’ve probably heard horror stories of disgruntled heirs contesting a parent’s Will to try and get their “fair share” of an inheritance. While uncommon, it is particularly concerning when dealing with favoritism, children who have substance abuse or gambling issues, blended families, or illegitimate children. Fortunately, under Massachusetts law there are a few steps you can take to deter unwanted litigation – one of which is called the no contest clause (sometimes referred to as an “in terrorem” clause).

Completing your estate plan is a great accomplishment, but the fun’s not over yet – now you have to decide where to keep the papers for the rest of your life. Generally, you have three options for safekeeping your estate planning documents: Lawyer’s Office Traditionally, lawyers would keep and store their clients documents since they

Independent Trustees are persons and/or entities that are responsible for administering your trust, but are not named as beneficiaries. While some trusts require independent trustees, others use independent trustees to primarily avoid a conflict of interest that may otherwise exist if the Trustee were to also be a beneficiary of the trust.

1. Failing to name contingent beneficiaries Life’s uncertain. We’d like to believe everything will go as planned, but it’s possible that your primary beneficiaries may predecease you. If that happens, you should always have alternate or back-up beneficiaries in place. Also, it’s best to make a habit of reviewing the beneficiaries on your

If the thought of leaving your estate to your spouse makes you nervous then you’ve probably wondered: can you disinherit your spouse? The answer is generally, no – at least not entirely. Under Massachusetts law your spouse is entitled to inherit a portion of your estate (also known as the spousal elective share).

A trust can be established either during a person’s life (a “Living Trust”) or at his or her death by being included in a person’s Will (a “Testamentary Trust”). Both types of trusts have the benefit of allowing the creator of the Trust (sometimes called the donor, grantor, or settlor) to put in place a

A trust can be a useful tool for various scenarios, but is not always necessary and is often oversold to increase attorney’s fees. So the question is: do you actually need a trust? Here are the three most common scenarios where a trust may make sense for you: To Avoid Probate on Out-of-State Property.

Death and money are likely among the top two things you don’t want to talk about around the dinner table. Yet you probably know very well that an estate planning conversation is something you should discuss with your family sooner rather than later. Otherwise, your survivors may misinterpret or fail to follow your intentions, which

Probate is the legal process that occurs after your death in order to settle your estate. The process can vary depending on your situation. For example, in Massachusetts there are four types of probate: (1) Voluntary Administration, (2) Informal Proceedings, (3) Formal Proceedings, and (4) Supervised Administration. While the exact steps vary depending on

Thanks to the new tax bill, very few will be susceptible to the Federal Estate Tax as the Federal exemption amount now sits at $11.2 million (effectively $22.4 million for married couples). Unfortunately, for those of you domiciled in Massachusetts, there’s another tax you have to worry about – the state’s Estate Tax