Estate Planning Frequently Asked Questions
Not Sure Where to Start With Your Estate Plan? |
Answers to some frequently asked questions about wills, trusts, provisions for children, asset protection and other estate planning topics.
|
|
What Happens if I Die Without a Will or an Estate Plan?
If you do not make an estate plan, and if you die without a will, the laws of the Commonwealth of Massachusetts will create an estate plan for you, which 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, even if they re-marry and even 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. Our estate planning lawyers generally recommend using a combination of wills and trusts in your estate planning to accomplish your goals. Learn more here about how Massachusetts law will distribute your assets of you do not have 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 real estate (or tangible personal property) in another state or country there may be an additional estate tax due there. The federal taxes currently do 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. Most people are closer to this number than they think. Our estate planning lawyers can help you structure your estate to minimize or avoid this tax.
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. 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. With a good estate plan, and a trust for your children in place, the guardian should not experience financial strain in raising your children.
Can I Choose Who Gets 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). 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.
How Do I Protect My Assets from the Costs of Long Term Care or a Nursing Home?
With some limited 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, and it is always possible the laws could be changed to make that a longer period of time. 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. Our estate planning lawyers can help you figure out the right balance between protecting assets and maintaining your own financial security in the meantime.
How Do I Plan for My Own Disability?
Some of the most important estate planning documents protect your interests while you are still alive. You can prepare a health care proxy to designate the person authorized to make medical decisions for you if you are incapacitated, and a durable power of attorney to designate the person authorized to take care of your legal and financial affairs 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 special needs trust for your child, both to ensure that he or she has financial support, but also to preserve eligibility 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, the birth of a child, divorce or remarriage, death of a spouse, receipt of a substantial inheritance). Each of these things may change what you need to do with your estate planning, and the relevant laws do change from time to time.
|
|
