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Basic Estate Planning in Massachusetts

last-willProtecting loved ones and establishing wishes prior to death is pretty basic and important part of life.  Sometimes families with children don’t realize how essential it is to select a guardian.  Oftentimes grandparents would like to leave a legacy to their grandchildren or skip a generation.  We all need to think about our essential health care and financial decisions now, before these kinds decisions are made for us.

If you do not have a will, or if your will is invalid, you will die what is called, “intestate.” In cases when a person dies intestate, their probate assets are distributed according to statutory guidelines.  These guidelines are extremely rigid. When a person dies intestate, the process of distributing assets does not take into consideration any of the wishes and desires the person who died (the decedent) or the family.  Furthermore, this process takes a considerable amount of time.

In Massachusetts, there are four basic legal documents needed to protect a basic estate and avoid the hassle, time and expense of probating an estate for those who die intestate.  A basic estate is an estate valued at less than $1 million dollars in total assets.  These four documents are:  a Will, a Durable Power of Attorney, a Health Care Proxy and a Health Care Directive.

  1. The Will

A will is a document that you use to specify your wishes as to how to distribute your assets after you pass away.  Your assets are your personal property and real property, like your home, automobiles, bank accounts, and other personal items.  For a will to be legally valid, it must be signed in front of at least two witnesses and notarized.

The will also designates an executor for your estate.  An executor is the person whom you choose to administer your estate.   An executor should be reliable and trustworthy, because they will have broad powers over all of your assets after you have passed away.

After appointment of the executor, a will lists individual items that will be distributed to certain individuals.  A will can designate anything to be left to anyone, as long as the conditions and items are lawful.

The last section of a basic will usually involves paying of taxes, debts and expenses like funeral expenses and things that must be paid by your estate, which is part of Probate.  Only probated items will be included in your will.  Non-probated items will pass by operation of law.

A non-probate item is anything that passes by operation of law, like a contract or an insurance policy or jointly held property, like property held by tenancy by the entirety or joint tenants.  Many homes and bank accounts are held jointly.  Property and assets held jointly with someone else passes automatically to the other person and doesn’t pass by will and is considered a probate asset.

A few things that may pass by contract are life insurance policies, retirement accounts and most annuities.  The general rule is, property that has a beneficiary designation is something that passes by contract.  Therefore, property with a beneficiary designation is not a probate asset.

Even if your home is owned jointly, and a provision in your will designates something otherwise, the provision in your will, generally, will be ignored in most cases.

  1. Durable Power of Attorney

A will is an instrument that helps people know what to do with your things after you pass away, but a Durable Power of Attorney (DPOA) is a planning tool, or legal instrument, for use during your lifetime to provide for your wishes, if you were to become incapacitated.

A DPOA is a document that gives another person of your designation the right, (or power) to act on your behalf.  Essentially, anything you can do, your attorney-in-fact can do for you.  The Attorney-in-fact is the person who is designated by you, in the DPOA.   A DPOA controls your estate finances.  For example, your attorney-in-fact can act as your representative to withdraw money from your bank account to pay for your hospital bills and pay your mortgage, if you were to become unable to do so, because you became incapacitated.  A DPOA can be temporary or permanent, depending upon your mental and physical state and capacity.

A DPOA is a very important part of successful estate planning, because without someone to act on your financial behalf, you might not have access to resources you need when you need them.  A person who is completely trustworthy should be designated your attorney-in-fact.

  1. Health Care Proxy

A health care proxy (HCP) is similar to a DPOA, except for one thing.  The HCP does not designate someone to make financial decisions on your behalf, if you were to become incapacitated.  Your HCPO designates someone to make medical decisions on your behalf, if you were to become incapacitated.

Choosing a responsible HCP is also very important.  A HCP is someone you can trust to act as you would act, or do as you would do regarding medical decisions.  Oftentimes, family members are not always the best choice.  If a family member is likely to impose their own will, rather than follow your wishes, chose another person as your HCP.

  1. Health Care Directive

A health care directive (HCD) is also known as a living will and is the only document in your basic estate planning package that has no legal power or effect.  A HCD is a document that guides your HCP as to your own wishes and desires for Health Care treatment.  In the HCD, you can choose to list the different types of treatments you want and what treatment you wish to refuse. Since some people would not want to live if their brain was not functioning, for example.  The HCD is the place to tell your HCP your wishes regarding whether or not to resuscitate, in this instance.

Since the HCD isn’t a legally binding document in Massachusetts, your HCP can make decisions that override any provisions in your HCD. However, a HCD is a useful tool that guides doctors and family members during times of medical decision-making.

Advanced Estate Planning

Estates involving over $1 million dollars in assets require something more than basic estate planning.  Massachusetts has an estate tax on estates that exceed $1 million dollars, so tax planning is an important and a valuable tool.  With a proper tax plan, even if your estate exceeds $1 million dollars, estate taxes are often avoided.

Tax planning and advance estate planning typically involves the use of different types of trusts. Tax planning and advance estate planning involves the four documents, used in basic estate planning, plus the use of any additional needed trust instruments.

Estate Planning Costs:

By executing a will and signing a couple other basic documents, you could save your loved ones loads of aggravation and unnecessary expenses.  The value of this is something that can’t be counted in pure dollars and cents.  Nevertheless, the price range for a basic estate plan is wide.  Attorneys will often charge anywhere from $800 to $4,000 for a basic estate plan.

Typically, Attorney Kelly’s fees are very reasonable and will only charge, depending upon your specific situation and other factors like size and complexity of the estate.  Options for pro-bono (free) and reduced fee legal services are also available for those in financial need.

Call the Law Office of Ginger B. Kelly now and schedule your first appointment.  We are a small law office who offers your first confidential consultation is always free.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.wordpress.com, or call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We can not stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2015, 2016 by Ginger B. Kelly, Esq., all rights reserved.

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November 4, 2016 · 11:00 am