Estate Planning Bits

Estate Planning is a process

Many clients do their planning at year end, which is not necessarily the best timing. Planning should carry through the entire year. Now that tax day has passed, it’s as good a time as any to review and update your estate plan. Like your annual physical, it is wise to also have a legal checkup. The following are a few areas that should be considered, although they may not all be appropriate for everybody:

Update Your Estate Plan

Are your Health Care Proxy, Power of Attorney and Will up to date? Are the individuals named within the documents still appropriate to serve as well as receive your assets? Are they healthy? Are their marriages also healthy? If not, perhaps your documents need to be reviewed to provide for preservation of assets for the beneficiaries so they don’t become their liabilities.

Plan For Retirement

Is it time for you to consider when you should collect Social Security? Have economic changes made it necessary for you to work longer but possibly still take Social Security benefits sooner? Is your health insurance in order, or do you need to purchase some other plan, such as a Medigap policy, to ensure you have the coverage you need until you’re able to obtain Medicare benefits? Naturally, if you are in your 20s through 40s, these issues seem way too remote to consider, but other issues should be considered such as saving for retirement and to attending to a child’s education expenses. In fact, if you are relatively young, perhaps you are worried about paying off your own college expenses.

Consider Long-Term Care Insurance

Most seniors are concerned about having their assets spent on long-term care expenses in the event they need institutionalized care or require 24/7 home care. A long-term care policy can help if you’re qualified to obtain the coverage and can afford it. If you can’t afford it, an elder law attorney can present alternatives, like using a reverse mortgage or having children share the cost, etc. It is an option that should not be overlooked, but it must be reviewed to determine whether it is an option for the client or not.

As with all life plans, just because documents are signed, does not mean the plan is good forever. It should be reviewed and revised as laws, finances, and family dynamics change.

by: Hyman G. Darling, Esq.

Alternatives to estate planning Trusts

When a person passes away, assets in their name alone will pass through probate. Even if the person has a Will, the Will must be probated in order to provide orderly distribution of the assets as intended. However, some people go to great pains to avoid probate.

One option is to establish a living Trust. Any assets in the Trust at the time of death are not probated, and thus also avoid the court proceeding that allows for the estate to be settled without probate publicity and expense, while also normally providing for a more expeditious settlement. However, this does require establishing a separate document that must be signed, and assets must be transferred to the Trust prior to incapacity or death. Otherwise, the assets may have to pass through probate upon death in order to then flow into the Trust through the Will.

An alternative would be to make the asset joint, which provides for survivorship. If either of the joint owners dies, then his or her share passes to the other joint tenant. However, in the event that one person becomes involved in a divorce, gets sued, has credit problems, etc., then that share of the assets may be countable and accessible by that person’s creditor. This is far from the intended result, but it will be the situation if the person does not remove their name from the account prior to the problem occurring.  Also, in the event that the person who established the joint account dies, then the entire account is owned by the surviving joint owner, which may not be the intended result.

Another alternative would be to add a beneficiary to certain assets. Certainly, life insurance policies, IRAs, 401(k) Plans, and other similar retirement assets may list a beneficiary. Upon the death of the owner, the assets pass outright to the beneficiary without the need for probate, and most entities will also allow for multiple beneficiaries, as well as contingent beneficiaries. These forms should be updated from time to time to be sure that the proper names and allocations are listed, as family issues and relationships change.

It is also an option to name a beneficiary on stock accounts and bank accounts. The stock accounts can be worded transfer on death or TOD, while the bank accounts may be worded as payable on death or POD. Upon the death of the owner, the beneficiary merely needs to verify the death of the owner with a certified death certificate, and the funds will be transferred directly to their name. This also occurs without the need for probate and provides the owner with the security of knowing that the assets will not be available to the beneficiary until death. There are pros and cons of each of the above techniques, and it is important to be sure that the correct decision is made for each particular asset.

By: Hyman G. Darling, Esq.

James Brown – The saga continues - estate planning for blended families

The legal battle over James Brown’s estate continues, despite an apparent break-through agreement between the respective parties. Specifically, the settlement provides that one-half of Brown’s assets would go to his charitable trust to educate his grandchildren and needy students in and Georgia and South Carolina.

The remainder would be split between Brown’s surviving spouse and some of Brown’s adult children. However, this is in contrast to the dispositive provisions provided in Brown’s Will and Trust.

Louis Levenson, an attorney for some of Brown’s adult children said that “…[r]ather than take the delay, rather than pay the cost and rather than risk an all-or-nothing outcome, the parties who were most interested…elected the wiser course, which was a settlement.” A significant portion of Brown’s estate has been lost due to this lawsuit. Nevertheless, the Judge said approval of a settlement will have to wait because of tax risks.

James Brown situation is one of a blended family. In the Brown case, Tomi Rae Hynie, the woman who says that she is Brown’s final spouse and the mother of his young son, claimed that the Will and Trust were not valid.

Blended families now outnumber traditional nuclear families. And, the number is likely to grow, based upon current divorce statistics and trends. Estate planning for blended families is complicated and potentially caustic. The circumstances surrounding the merging of two families, typically divorce or the death of a spouse, often produce emotional and psychological consequences that can have considerable and unpredictable effects. Even when blended family members seem to get along, estate planning can be complex. The potential for suspicion and acrimony among blended families can be so great that some people simply choose to avoid addressing the issue of inheritance altogether or to not update their estate planning documents until it is too late.

Regardless of whether children are reared in a traditional nuclear family or in a blended family, great care should be give to protect any inheritance, both for them and from them. As per the case of James Brown, an inheritance can quickly diminish through will contests due to lack of proper planning.

By: Todd C. Ratner, Esq.

Change your estate plan – the right way and the wrong way

It often happens that someone dies and a family member bring me their loved one’s will to probate in probate court. In reviewing the Will, we will often find that there are hand-written notes in the margins, “scratch outs,” and other attempted hand-written changes, sometimes with initials and dates, and other times none. 

In most states, those attempted changes to the original signed Will are not effective. In some situations, the probate court may also request or require that one of the witnesses to the Will, or the preparer, or original witnesses to the Will appear in court to testify as to whether these changes were made at the time the Will was signed or subsequent to the Will being executed. 

It’s not uncommon for people to believe that because they made hand-written notes on their Will or wrote an addendum, that will effectively change their Will. They do this to save time, or to prevent spending extra money on fees for professional services to revise what was previously a valid drafted will.

I have even received letters from clients who decide to make a change, but they never got around to getting into the office to formalize those changes. They think that this will suffice in case there is an accident, and they think that these letters of instructions will help. Although it is helpful to have something in writing that expresses a client’s desires, the Will itself may not be legally altered by these signed letters. 

These errors in judgment on the part of a client may cause the intended changes to be ineffective and also cost the estate a significant amount of money if and when the Will is probated and a contest to the Will is defended by the estate. Those changes, which are likely relatively minor, are not expensive, and in some cases, a simple codicil, (document that changes the Will,) may be all that is necessary, as opposed to re-drafting the entire Will. 

When a change in circumstances, assets structure, or a family situation occurs, it is best to contact your attorney so that your Will may be made promptly and correctly changed. At the same time, it may be advisable to review the individuals named within your Will as guardians, executors and trustees, as well as other documents, such as your Health Proxy and Power of Attorney, to ensure that the proper named are still appropriate to serve in their respective capacities.

There may also be changes in the total assets you own, which may require that a trust to be created. Or, if assets have significantly diminished, then it is possible that the need for a trust has diminished and reciprocal Wills may suffice.



By: Hyman G. Darling, Esq.

Demystifying terms used by estate planning attorneys

Agent: The person given legal authority to make financial decisions for a person through a durable power of attorney document or the legal authority to make health and medical decisions for a person through a health care proxy document.

Artificial Life Support: Medical equipment and other technology used to prolong the life of a person who is seriously ill by sustaining essential body functions, like breathing.

Assets: Personal possessions of value, including cash, bank accounts, real estate, vehicles and investments.

Beneficiaries: The people named in the will to receive the estate of the person upon his or her death.

Conservator: The person appointed by the courts to make financial decisions on behalf of a person.

Custody: Legal responsibility of a person.

DNR:  Stands for “Do not resuscitate” and refers to a person’s instructions that, if his or her heart or breathing stops, the doctor should not try to restart it.

Durable: When a power of attorney document is durable, it is valid even after the person with dementia can no longer make his or her own decisions.

Execute: To legally sign or “carry out” a legal document.

Executor: The person named in a will to manage the estate of the person upon his or her death.

Grantor: The person for whom a living trust is created.

Guardian: The person appointed by the courts to make health care decisions on behalf of a person (sometimes also includes financial decisions.)

Health care agent: The person given legal authority to make health care decisions for a person through a health care proxy document.

Legal capacity: The level of judgment and decision-making ability needed to sign official documents.

Probate:   The process used by the court to distribute the property of a person who has died.

Trustee: The individual or bank chosen to manage the property (assets) in the trust document of a person.



by: Todd C. Ratner, Esc.

The dangers of estate planning software programs

The recent sophistication of software has contributed to an increase in homegrown estate planning. These mass-marketers of legal services misinform people into thinking that they are saving money and that they are receiving sound legal advice. This is simply not true.

Most people need the perspective that an impartial, experienced estate planning attorney provides. You are playing with fire if you engage the services of these companies for the following reasons:

1. These programs largely disregard specific laws that can dramatically affect your estate;
2. Your unique issues and circumstances can only be flushed out and addressed through consultation with an attorney; and
3. You are not securing the experience and knowledge of an attorney trained to handle the specific circumstances of your estate.

Probate law is strict and unforgiving. Good estate planning attorneys work diligently to keep abreast of changes in the law through memberships in such organizations as the National Academy of Elder Law Attorneys, Inc., the Estate Planning Council of Hampden County, and through extensive, continuous reading and legal research. Creating your own legal documents provides a false sense of security, and the inaccuracies are usually only discovered when it is too late to do anything about them.

These companies hope that you will never read their ‘disclaimer’ or ‘terms of use disclosure.’ One such disclaimer provides that they are not providing any legal advice, that their documents may not work in your situation, that their documents may not be valid in your state, and that you agree to hold them harmless for any consequences resulting from your choice to use their services rather than seeking the advice of an attorney.

In conclusion, the subjects that matter the most to you; your health, your family, and your finances warrant the attention of an experienced, trained professional who will put their bar license and malpractice insurance on the line to provide you with the advise, counsel, opinions, and recommendations that are essential to drafting a proper estate plan.

People generally create estate plans for the peace of mind that they provide. The question is whether or not a software program and/or an unlicensed, uninsured and largely unregulated document preparer can provide you with the peace of mind that your estate plan was done appropriately and addresses your specific needs.

By: Todd C. Ratner, Esquire

Ethical wills – bequeath your values along with your valuables

To my daughter, I leave my love of laughter,
To my son, I leave my passion for knowledge . . .

You may have already drafted a Last Will and created an estate plan that transfers your worldly possessions. Your estate plan should not end there. What steps have you taken to ensure that you also pass on your values, ideas and beliefs? What wisdom and life lessons do you want to share with those you care about? Do you want to be remembered for your values rather than for the possessions you have left behind? If so, you may want to consider drafting an ethical will. As the name suggests, ethical wills are the spiritual counterparts to “traditional” Wills that distribute wealth. Ethical wills pass on intangible assets such as blessings, life lessons, dreams and hopes as opposed to tangible possessions. While ethical wills are not binding legal documents, they can be an invaluable gift to friends, family members and loved ones.

Preparing to draft an ethical will often involves serious consideration of your values and morals, important lessons learned, hopes and dreams for the future, advice to loved ones, invaluable memories and important events in your life. You may also contemplate themes, such as regrets and forgiveness, personal love, mentors and teachers, cultural beliefs, ancestry or how you would like to be remembered by others.

Although writing an ethical will is a serious endeavor, it does not need to be a complicated process. Unlike “traditional” Wills that are bound by statutory constraints, there is no set form or procedure for creating an ethical will. An ethical will can be a letter to loved ones or to grandchildren not yet born. An ethical will may also be a set of instructions regarding the family business or a detailed account of a life journey. An ethical will may choose to develop and impart a family mission statement or provide blessings for future generations. Additionally, an ethical will does not need to be limited to writing. It may incorporate multimedia messages, such as photos, drawings, music or videos. Your personal preferences are the only constraints.

Bequeath more than your valuables. Create an ethical will and bequeath your values too.

By: Gina M. Barry, Esquire

How to handle affairs upon the death of a loved one

When a person close to you dies, there are several issues that need to be attended to. Sometimes there might not be any tax or probate requirements, but nevertheless, it is important to review the situation to ensure that all matters are being handled properly. The following is a relatively short checklist that is not inclusive of all matters to take care of, but certainly, should be on the top of your list:

• Obtain a certified copy of the death certificate and request an extra one. Although these documents are not difficult to obtain from town hall or the city clerk’s office, it is easier to get an extra one now that may be used in the future, which will save time.
• Check benefits with Social Security. If a person who dies has a spouse, minor children, or was already receiving benefits or possibly had filed for benefits but not yet received them, it is important to notify Social Security to determine what the new benefit will be for the spouse or children or possibly a disabled child.
• Life insurance must be claimed, which in most cases is not income taxable to the recipient. Be sure to check with the decedent’s employer to determine whether there may have been any term life insurance death benefit. All prior employers should also be contacted even if there is no obvious benefit, to verify that a death benefit is not missed.
• Review the income tax return of the decedent to determine where all assets listed on the return may have been owned, such as income, gains or potential losses. Be sure to check 1099’s for other income which may not be listed specifically on a tax return such as dividends from reinvestment shares, life insurance dividends and municipal bonds.
• Take charge of the Real Estate to secure it and be sure that no one has access to the property. Inventory the contents of this property and if necessary, change the locks and alarm code of the residence.
• Take charge of the vehicle and determine whether it is insured for others to drive if other family members continue to use it. If not, inform the drivers of the situation, secure the car and possibly take away all keys.
• Verify ownership of bank accounts, stock, bonds, etc. If they are held jointly, determine if that is for convenience of if they are to be held truly for joint ownership and that the surviving joint owner or beneficiary of the account is entitled to retain ownership of the asset.
• Determine if any assets are in the decedent’s name alone which require a probate proceeding. This may also include a cause of action against a company or individual for causing the death or potentially to pursue a continuing action that may have been filed by the decedent prior to his/her death. If the will needs to be probated, be sure to obtain good legal advice as well as tax advice when proceeding.
• When distributing any tangible property to any individuals or charities, be sure to obtain a receipt in case there is any opportunity to obtain a charitable deduction. Possibly, the person receiving the property or their family may not be aware of the terms of the distribution, and in the absence of a memorandum signed by the decedent, some family members may be in disharmony about the ultimate distribution.

Before proceeding hastily, always obtain good advice to determine whether or not the estate must be probated, whether a tax return must be filed for the decedent’s final year of receiving income and whether an estate tax return needs to be completed and filed. Without obtaining advice, a person serving in the capacity of the named executor and person in possession may find himself answering to other beneficiaries in a court later if the settlement was not attended to properly.

By: Hyman G. Darling, Esq.

Why women need an estate plan

Women experience unique economic realities. They tend to live longer and move in and out of the workforce due to career interruptions for child birth and elder parent care. This means that women often qualify for much lower pension benefits and receive lower Social Security benefits due to their years employed and salaries attained, which cannot be increased by the husband’s pension or social security if he experiences an untimely death.

Fewer years in the workforce, fewer years with a single employer, and lower pay are all factors that may contribute to a lower average pension for females, and Social Security benefits are calculated based on a person’s highest 35 years of earnings. If a benefit recipient does not have 35 years in the workforce, the Social Security Administration will add zero-earnings years to his or her record to equal 35 years.

Moreover, women often have diminished retirement savings due to the health care costs for the spouse who dies first, (usually the male.) Women most often become the caretaker for their husbands, which reaps immeasurable financial benefits by delaying the significant expense of nursing home care. But, who is there when the widowed wife needs assistance, as the average nursing home cost in Massachusetts is approximately $7,500.00?

Women must work with their husbands to implement a plan to ensure that the total health care and estate planning needs of their family is addressed. They should be guarded against the incapacity and the death of their spouse.

There are certain documents that are regarded as necessities for life in today’s active, uncertain society to protect loved ones:

• Durable Power of Attorney: This document that establishes who will attend to your financial decisions in the unfortunately event of your incapacity.
• Health Care Proxy: This document that ensures that medical decisions are carried out in accordance with your intentions in the event that you become mentally or physically disabled to the extent that you cannot make informed decisions on your own behalf.
• Will: This document provides for an orderly distribution of your assets.

However, the above documents are just the tip of the estate planning spectrum. It is also important that to consider Medicare and Medicaid (MassHealth in Massachusetts) planning, interplay between long-term care and financial planning, use of long-term care insurance and housing options and alternatives to nursing homes, to name a few.

By: Todd C. Ratner, Esquire

Sharing critical estate planning and financial information with your children, and how to do this if you want to keep the details private

A few years ago I presented an Estate Planning Program to employees of the Wall Street Journal. Most of these people were rapidly approaching retirement, and by now, they probably are retired.

They were all very interested in planning for their future, but there was one special attendee who was a writer for the Journal. A couple weeks after the presentation, I read his article in the Wall Street Journal about the importance of planning to save taxes, avoid probate, protect assets for long-term care situations, and generally to do estate planning for the right reason, that is to ensure that funds and assets will pass to the appropriate parties at the appropriate times. The article went on to explain the need for all of the important documents, planning and obtaining good counsel for the plan. However, toward the end of the article, the author talked about the importance of discussing the plan with his parents, but since he could not discuss this issue with them personally, he merely stated that he hoped they were reading the article.

My recommendation to many of my clients is to not discuss all of the details of their plan with their children, but to make sure that the kids have a complete and accurate picture of their assets all in one place. This includes copies of bank statements, financial records, life insurance policies, tax returns, etc.

Many people don’t want to make this information available to their children now, but they should at least tell their kids where their important papers are and who is in charge, such as their financial advisor, insurance agent, lawyer, accountant, banker, trust officer, etc. If they don’t do this, their kids will spend a significant portion of their time when their parents either become incapacitated or die, searching for all of the information. Your children will also need access passwords to get information that may be stored on your computer.

In your case, you may have an open family relationship and be willing to discuss planning issues with your children. This includes not only end of life decisions such as life support, organ donation and funeral arrangements, but also discussion about who may be in charge of making financial, medical, and other decisions in the event of your incapacity or death. Although this may lead to the opening of Pandora’s Box and causing family disharmony when children who think they should be in charge find out that they are not, at least all parties within the family will be educated about what you want and what plan has been prepared.

If you are not interested in sharing all of this private information, you may provide a list of items and where the documents are kept, where safe deposit boxes are and located, where the keys are maintained, where passports, veteran’s administration documentation, medical insurance cards, and other important information is maintained. At least then, if there is an emergency, someone will have access to this information, whether it be your child, a trusted advisor, your lawyer or another family member.

Frequently, after a plan is completed in our office, the parents wish a full disclosure to be made (possibly not about all assets,) but about the plan itself, and they want to share the plan with their children. We may consider having an open family discussion with some children being present in the office and some available by conference call or video conferencing in order to allow the entire family to be informed as to the client’s intentions. This serves the purpose of educating all parties so that they will know the intent, goals and objectives of their parents, while at the same time “clearing the air” of any misinformation that may have been implied or presented to any party in the past. If a child asks a question that a parent is not willing to answer, the issue is delicately averted if that is my client’s desired result.

By: Hyman G. Darling, Esq.