by Laura E. Days, Esq.
“In her first effort at being very, very good, she decided to make her will, as Aunt March had done, so that if she did fall ill and die, her possessions might be justly and generously divided. It cost her a pang even to think of giving up the little treasures which in her eyes were are precious as the old lady’s jewels.”
– Amy’s Will – Chapter 19 – Little Women by Louisa May Alcott
If you own something, you have an Estate: your own collection of personal treasures.
A checking account, car, home, retirement account, art collection; life insurance policy, savings account, pet, furniture, jewelry: these items and more form the basis of your Estate. Even if your Estate is modest, you have wishes and values that you want communicated in the event of serious illness or your death. You need a plan.
Contrary to common wisdom, estate plans are not only for wealthy people. An estate plan protects and distributes your property based on your wishes and the needs of your family. Also, it will ease part of the burden for your loved ones during difficult times.
Through the process of estate planning, your attorney assists you in defining your goals and creates the documents needed to ensure that your wishes are carried out, that your property is disposed of as you would like, and that your family is protected.
The basic estate plan includes documents such as a Last Will and Testament, a Health Care Proxy, a Durable Power of Attorney, a Living Will and possibly also a Living Trust. Each document has its own specific purpose in reaching the general goal.
Last Will and Testament
A Will distributes your property to specifically named individuals, trusts, or charities based on your preferences. It allows you to nominate a person whom you trust – an executor or personal representative – to carry out these wishes after your death. This person is legally obligated to act in your interests after your death following the instructions provided in your Will.
Without a Will, the laws of intestacy will govern how your Estate is distributed. A Probate Court judge will appoint someone to make decisions for you, and your wishes may not be carried out as you would have liked, but rather as the law states that they should or as your personal representative guesses.
For example, many people are surprised to learn that if they are married and die without a Will (intestate), their property might not simply go to their spouse. It may be divided between their spouse and their children, even if the children are minors, or between their spouse and their parents or other relatives.
Speaking of children, one of the most important decisions that you make in your Will is to nominate a guardian for your children. If you die without naming a guardian to care for your young ones, the probate judge will make the determination of who should raise your children. While great care is taken to find the best person most likely to act in the best interests of your children, not naming a guardian puts the children at risk of court-battles, family disputes and potentially even foster care. While your nominee may not ultimately assume responsibility of your children, when you name a potential guardian you give the court a clear directive of your wishes. In addition, when determining who you would prefer as a guardian, plan for an alternative guardian if your first choice is unable to serve.
Durable Power of Attorney
A Durable Power of Attorney allows you to nominate a trusted family member or friend to act on your behalf as an attorney-in- fact. This person will be authorized to handle financial and business transactions including paying bills, filing your income tax returns, moving money for you, hiring home health aides or others, or selling real estate if you are incapacitated or otherwise unable to do it yourself.
Health Care Proxy
Much like a Durable Power of Attorney, this document allows you to designate someone you know and trust to act on your behalf with regard to your medical care. In the event that you are either unable to communicate your wishes or do not have the capacity to make medical decisions, your health care agent will do so for you. Your agent’s decisions will have the same authority as yours would.
When making the decision about who should be your health care agent, you should take into account your own religious and moral beliefs, and choose a person most likely to carry out your wishes or, in the absence of stated directions, make decisions for you based on your best interests.
It is extremely important that you not only talk with your agent about your specific wishes, beliefs and philosophies relating to your health care, but that you also find a second person whom you feel could act on your behalf. You may wish to consult with your doctor, religious advisor, and trusted loved ones before you make a decision.
Your agent will work with your health care team, seeking their advice and counsel prior to making any choices that would affect your wellbeing. Only after considering all options regarding diagnosis, prognosis, and treatment of your condition, will your agent either consent to or refuse medical treatment. He or she will have access to your medical records, as you would, in order to make informed decisions.
A Living Will – a witnessed statement of intent, indicating that if you ever become permanently unconscious or have irreversible brain damage with a severely diminished quality of life that you would not want to have tube feeding, hydration, mechanical respiration, antibiotics, or cardiac resuscitation – is an important document for your health care team and agent to have. It acts as a guide for them and as evidence of what your wishes relative to end of life care would be if you were ever in that condition and could not communicate for yourself.
A Living Trust is an excellent tool for managing money, paying bills (including college tuition), and making sure basic needs for the children are met if both parents die before their children are grown up and mature enough to handle their inheritance. You will nominate Trustees to oversee the money, and make distributions to care for your children. The Living Trust is not part of your Last Will, therefore there is no need to file costly and time-consuming annual accountings with the Probate Court, and more money will go to your children. Once your children reach a mature age, they will begin to receive portions of their inheritance outright from the Trust.
Alternatively, a Trust could be used to manage real estate or other assets in case of your own incapacity, and to direct the passing on of assets after your death. This makes a Trust a versatile tool for those who are terminally ill or forsee a time when they might no longer wish to manage their own assets as they age.
No one wants to contemplate his or her own mortality. However, forming and executing a basic estate plan will provide you with a sense of tranquility and satisfaction for having provided your loved ones with clear evidence of your wishes and esteem. Your plan will speak for you and, in a not insignificant way, assist them in dealing with your illness, incapacity, and death.
“I felt I ought to do it, for life is uncertain and I don’t want any ill feeling over my tomb.”
Amy’s Will – Chapter 19 – Little Women by Louisa May Alcott
by Laurie Israel, Esq. and Deborah Danger, Esq.
A big part of my job as an estate planning lawyer is helping people plan for where their money goes after they die. Much of this planning revolves around determining how to minimize estate taxes, and yet get the money to those people who are my clients’ loved ones in the most beneficial way. In this article, we will focus on Federal and Massachusetts law; many other states have estate tax laws similar to those of Massachusetts.
To read the entire article, this is a link to the article on my law website at http://www.ivkdlaw.com/the-firm/our-articles/divorce-and-estate-planning/qtips-made-easy/
You may have drafted your last will and testament, and perhaps other documents such as health care proxies and powers of attorney. You may think you are done with your estate plan. You are not done – you have only done half the work needed.
Clients frequently ask me where to keep their signed Last Will and Testament. The original Last Will is required for probate. If only a copy can be found, the testator is presumed to have revoked the Last Will and Testament. Asking for a copy of the Will to be allowed will pose a problem, unless all of the heirs at law (those who would receive the estate had the decedent died without a will) assent to the copy.
After Leona Helmsley died in 2007, her $12 million trust for her dog, “Trouble”, was big news. The trust was upheld (New York has a pet trust law), although the amount was reduced to $2 million, with the rest going directly to charitable organizations, the contingent beneficiaries of the trust.
Why would a little dog need so much money? Pet trusts can allow for the costs of a caretaker living in the former home of the dog owner. Sometimes the trust might direct that a smaller, less expensive place be purchased to house the pets and the caretakers. These trusts can and do fund care for pets after the death of their owner that is as expensive as 24/7/365 at-home nursing care for an elderly persons.