Estate Planning Case Study: Maximizing the Marital Exemption and Minimizing Tax Liability for Laura and Stacey
Client BackgroundMeet Laura and Stacey, a devoted couple with unique family dynamics. Laura is the biological parent of their daughter, Stacey, whom Stacey adopted. Their financial situation included a home with $50,000 in equity, a joint checking and savings account with $40,000, and retirement assets totaling $70,000. Additionally, Laura possessed investment accounts with $190,000, while Stacey had life insurance coverage of $1.5 million and the potential for a significant inheritance within 3-5 years.
A critical factor to consider was the clear risk of Massachusetts estate tax liability, given their combined assets and potential inheritance. |
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Estate Planning Solutions
- Comprehensive Estate Planning Package: Recognizing the potential estate tax implications in Massachusetts, Laura and Stacey chose to secure their financial future through a full package of estate planning tools. This package included:
- Wills: Customized wills that outlined their specific wishes for asset distribution upon their passing.
- Health Care Proxies: Appointed proxies to make crucial medical decisions in line with their preferences if they were unable to do so themselves.
- Durable Powers of Attorney: Designated individuals to manage financial matters on their behalf in case of incapacity.
- Reciprocal Trusts: Implementing reciprocal trusts allowed them to maximize the marital exemption to estate tax, strategically minimizing their tax liability.
Conclusion
Laura and Stacey's decision to embark on comprehensive estate planning demonstrated their commitment to securing their financial future and minimizing potential estate tax liability. By choosing to create wills, health care proxies, durable powers of attorney, and reciprocal trusts, they ensured that their wishes would be honored and their tax liability minimized.
The implementation of reciprocal trusts was particularly significant, as it allowed them to take full advantage of the marital exemption to estate tax, a crucial strategy to reduce their tax burden.
This case study highlights the importance of proactive estate planning, especially when potential estate tax liability exists. Laura and Stacey's story serves as a testament to the effectiveness of tailored estate planning solutions in safeguarding financial security and minimizing tax liabilities.
The implementation of reciprocal trusts was particularly significant, as it allowed them to take full advantage of the marital exemption to estate tax, a crucial strategy to reduce their tax burden.
This case study highlights the importance of proactive estate planning, especially when potential estate tax liability exists. Laura and Stacey's story serves as a testament to the effectiveness of tailored estate planning solutions in safeguarding financial security and minimizing tax liabilities.
Meet Our Estate Planning Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna wrote a book on estate planning: The Road to Peace of Mind: What You Need to Know About Estate Planning. Jenna has helped many individuals and families with planning to protect their legacies and loved ones, and planning for the future and succession of their businesses.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and earned her LLM in estate planning from Western New England Scool of Law in 2016. She has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped many clients with planning for their legacies and their future, and navigating the probate process in Massachusetts after the death of a loved one.
How We Can Help
Our expertise lies in crafting tailored estate plans, like Laura and Stacey's, to protect your assets and minimize tax burdens. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
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