Estate Planning Frequently Asked Questions

Estate Planning FAQs
There are many things that can feel overwhelming about getting started on an estate plan. One of these is not knowing even what questions to ask. Below are some frequently asked questions and answers about wills and trusts, provisions for children, asset protection and other legal issues and estate planning topics. You can also check out some estate planning resources here.

What Happens if I Die Without a Will or Estate Plan?

If you do not make an estate plan, and if you die without a will, state law will create an estate plan for you. This may not be what you want or your family needs. For example, if you are married, your spouse will get 100% of your assets and you will have to trust that they will take care of your children. This could become complicated if they re-marry or if you have children from another relationship or marriage. 

You will also not have the opportunity to protect assets from taxes, or to ensure that some assets pass outside of the court process known as probate. Learn more here about how Massachusetts law will distribute your assets of you do not have a will. 

How do I Know What Estate Planning Documents I Really Need?

The essential estate planning documents you need will depend on your life situation.  If you are young, single and have no children, you probably don't need an elaborate plan.  Your basic needs at this point are probably a simple will, a health care proxy and a durable power of attorney.  As you accumulate assets and responsibilities, you may want to consider adding trusts to your plan.  And as you age further, you may need to consider planning for long term care and minimizing or avoiding estate taxes.  You can read more about the essential estate planning documents at each major stage of life.  There may also be other special circumstances that require different planning tools.

What is a Personal Representative?

A personal representative is the individual you choose to make sure your will is carried out. This person used to be called an executor or executrix for a female. Massachusetts has recently adopted the gender neutral term personal representative, or PR.

What is Probate, How Much Does it Cost and How Can I Avoid It?

The court that oversees the distribution of your estate is the Probate Court in Massachusetts, and the process is called probating your estate. Certain assets will pass automatically whether you have a will or not:
  • Life insurance proceeds
  • Jointly owned real estate
  • Jointly held bank accounts.
Everything else will go through the probate process unless you have already placed the assets into trust.

It is estimated that the cost of probate could eat up 3-6% of the value of your assets. You can avoid or minimize this through the use of trusts.

Can I Write My Own Will?

In some states, a will written entirely by hand and signed by you might be recognized as valid (often known as a holographic will). This is not the case in Massachusetts, and all wills must meet the execution (signing) and witness requirements of state law. If you make a will that is not properly signed and executed, the will won't be recognized and the courts will treat your estate as if you had died without a will. 

How Will My Estate Be Taxed?

Your estate may be subject to the federal estate tax and the Massachusetts estate tax.  In addition, if you own property in another state or country there may be an additional estate tax there. The federal estate tax currently does not apply unless you have $11.2 million or more in your estate, but Massachusetts applies a tax if you have $1 million. It is important to know that everything counts toward this number, even if it doesn't pass through the probate process, such as life insurance proceeds, retirement accounts, and real estate you own jointly with a spouse. 

Who Will Raise My Children?

If you die leaving minor children, the other parent ordinarily will raise and support them. If the other parent is not living, or if something happens to both of you at the same time, your children will need a guardian. 

If you have a will, you can appoint a guardian, and an alternate guardian in case your first choice is unavailable. Usually the guardian is a family member, but in your will this choice is up to you. If you do not have a will, the court will appoint a guardian, which will prolong the process for your family and can cause family disputes.

Additionally, if you do not have the proper documents in place, the person appointed as guardian will have to take the extra step of obtaining a conservatorship or creating some other vehicle to hold any assets your children inherit, because minor children cannot directly hold assets under the law. With a good estate plan, and a trust for your children in place, the guardian should be able to use trust assets and not experience financial strain in raising your children.

Can I Choose Who Gets My Assets Without a Will?

Proceeds from life insurance policies and retirement benefits will be distributed to whatever individuals you have designated as beneficiaries. You can change your beneficiaries usually at any time, without the assistance of a lawyer.  It is important that you review and update these designations from time to time, whether or not you update your will.

In addition, property held in certain joint tenancies with a right of survivorship (e.g. joint bank or brokerage accounts with a right of survivorship, or real estate you own jointly with your spouse) will pass automatically. Remember, however, these assets still count in determining whether you will owe estate tax.

Finally, if you put assets into a revocable living trust, those assets will pass according to the trust and not through probate or a will.

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How Do I Protect Assets from the Costs of Long Term Care?

With some exceptions, you will be required to "spend down" your assets before receiving any government assistance with nursing home costs. This can be financially devastating, and eat away entire legacies that people have spent their lifetimes building.

There are steps you can take to preserve assets, but you have to do it long before you or your spouse needs nursing home care. Currently, Medicaid will consider anything transferred within the prior five years to be assets still available to you. You also need to know that in order to shelter assets, they need to be in an irrevocable trust, meaning you can't change your mind and take the assets back. 

This means is that long term care planning is not for everyone, or for all stages of life, because you will be putting assets out of your own reach.  Our estate planning attorneys can help you figure out the right balance between protecting assets and maintaining your own financial security.

How Do I Plan for My Own Disability?

Some of the most important estate planning documents protect your interests while you are still alive. Two in particular ensure that you have someone to make medical and financial decisions on your behalf.

You can prepare a health care proxy to designate the person authorized to make medical decisions on your behalf if you are incapacitated. You can also include in this document guidance for decisions about life sustaining treatment.

You can create a durable power of attorney to designate the person authorized to make financial decisions if you are incapacitated. 

How Do I Plan for a Child With Special Needs?

There are many unique challenges to parenting a child with special needs, and estate planning is no exception. You can work with your estate planning lawyer to create a combination of wills and trusts, including a special needs trust for your child to ensure that he or she has financial support but also remains eligible for important government benefits.

How Often Should I Review My Estate Plan?

As a general rule, we suggest that you review your estate plan every five years, or any time there has been a substantial change in your family or financial situation. For example, you should seek legal advice about your estate plan in the event of major life changes such as the birth of a child, divorce or remarriage, death of a spouse, or receipt of a substantial inheritance. Also, even after a trust is created, you may need to make decisions about adding assets to the trust from time to time.

You should also consider revisiting your estate plan if you are experiencing early cognitive decline, or receive a diagnosis of dementia or Alzheimers.  You may retain the legal mental capacity to make final decisions about your plan for longer than you might think.

You can read more about the essential estate planning documents most commonly needed at each major stage of life, as well as certain special circumstances that should cause you to revisit your estate plan.

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