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Boston Elder Law Blog

Having a will does not mean family can avoid the probate process

It is a misconception that by having a will, family members will not have to go through the Massachusetts courts in order to receive their inheritances. The will must still go through the probate process before that can happen. That could take up to, or more than, a year to complete. Before you complete your estate plan, it may be a good idea to make sure that your family members understand what to expect after your death.

This is due to the fact that here in Massachusetts, creditors have up to a year to file claims against the estate. Before that time begins to run, however, a probate petition will need to be filed, at which time the executor of the will is appointed. Once that step is complete, the notice to creditors is sent and the clock begins.

Robin Williams' children and widow continue battle his assets

Massachusetts fans of Robin Williams may already know that despite what he believed to be a well-constructed estate plan, his widow and his children are still in court. Last year, court documents were filed regarding how the late actor's assets should be classified and therefore divided. Recently, Williams' widow filed documents indicating that she was not receiving enough money from the trust's Reserve Fund to maintain the home he left her.

She believes that his three surviving children are withholding money from the fund to which she is entitled. She claims that the language for the Reserve Fund says that she is to receive any excess net income each year, but she is not receiving it. Further, the money she is receiving is not enough.

Changes in marital status may require changes in estate planning

Estate planning is about preparing for the future, and the sooner that Massachusetts adults create and execute a plan, the better off they and their families may be. Once the documents are executed, many people put them in a safe place and forget about them. The only problem is that estate planning does not end when the documents are signed since one of the few constants in life is that things are going to change.

When those changes occur, an individual needs to review his or her estate plan to determine whether any adjustments need to be made. For example, a person's marital status has a significant effect on an estate plan. Upon marriage, or remarriage, it may be necessary to make changes to account for the current spouse and any children from a prior relationship.

Many assets do not have to go through the probate process

Many Massachusetts residents want to maximize any inheritance left to their loved ones. One way to do this is to limit the number of assets that must go through the probate process before being distributed to heirs and beneficiaries. It may still be necessary to file a probate petition and the will, but with proper estate planning, it does not have to be a time-consuming and expensive process.

Many accounts can be passed to loved ones through beneficiary designations (retirement accounts and life insurance policies), payable on death accounts (bank accounts), or transfer on death registrations (often used for vehicles and securities such as stocks and bonds). Real estate can be owned jointly, so that upon the death of one party, the decedent's interest in the property passes to the other owner by operation of law. Of course, holding a piece of real estate jointly with someone else gives the other party certain rights to the property.

Where will a single person's assets go after death?

Single people in Boston may not think that they need an estate plan since they are not married and/or do not have children. Nothing could be farther from the truth. Any adult who has assets typically benefits from at least a basic estate plan in order to avoid dying intestate, which means that state law would dictate how the estate would be distributed. Dying without at least a will may make it unnecessarily challenging for the family members left behind.

A will dictates who inherits certain assets, who will become guardian of any children of minor age and who will be appointed as executor of the estate. The executor is the person who handles the administration of a person's estate after death -- paying bills, distributing assets and taking care of any other tasks that require attention. Choosing the person to perform these duties is potentially the most important decision to be made since an individual needs to be sure that the person is trustworthy and is willing to serve in this capacity. Without a will, the court appoints an administrator of the estate, as opposed to appointing an executor, and that person may not be who the decedent would have picked. Depending on a Boston resident's wishes, other estate-planning documents may be needed.

What is the purpose of a special needs trust?

A person can have special needs as the result of a variety of situations. A disability could be genetic, occur at birth or be the result of a catastrophic accident. Regardless of how a Massachusetts resident became disabled, he or she may be entitled to assets through an inheritance, a settlement or some other means. Using a special needs trust to hold those assets can provide unique protections for the disabled person.

Family members' hearts are often in the right place when they leave an inheritance, but it could jeopardize any potential for the receipt of government benefits. The same risk also exists when a settlement or some other asset is received. Putting assets into a special needs trust means that they will not be considered as income when applying for benefits.

Are wills really that important for Massachusetts residents?

Many Massachusetts residents might be questioning whether or not they really need an estate plan. Wills may not seem to be that important since family members still have to file paperwork with the probate court. That may be true, but without wills, the time spent in probate often takes longer, costs more and often results in an individual's assets being distributed contrary to what the decedent would have preferred.

Any adult who owns any property or has children needs a will. This document allows a Massachusetts resident to choose who will receive his or her property after death. Parents are afforded the opportunity to choose who will act as the guardian of their children. Otherwise, family members could spend unnecessary time and money in court determining with whom the children will live. Moreover, it will be the last expression of love from parents to their children.

Wills do not dictate where every asset will end up

Massachusetts residents are urged to review their estate plans periodically to ensure that they continue to meet their goals. However, many people forget to review the beneficiary designations made on retirement accounts and life insurance policies when they are opened. Wills do not dictate where these assets will go upon death.

The beneficiary designation trumps whatever bequest is made in an individual's will. This means that an ex-spouse could receive the benefits from the account even if that was not the intention. Even if the ex-spouse is removed from the account and a new spouse is added, the proceeds may not be used as an individual intended.

Estate planning and long-term care insurance

The average cost of nursing home care across the nation is $80,000. Here in Massachusetts, it the average is $129,000. Therefore, residents may want to consider including long-term care in their estate planning.

As the average age of the country's population increases, so does the number of elderly people requiring nursing home care. At present, the Census Bureau estimates that approximately four percent of the population that is 65 and up reside in the 1.7 million beds available in nursing homes. That percentage skyrockets to 50 percent for people 95 years and older. Each year, the costs associated with that care increase. Medicaid will cover a certain portion of it, but doing some advanced financial planning could be in order.

Using a revocable trust to pass an estate to children

Many Massachusetts residents struggle with how to provide for their children after their deaths. One estate planning tool that many people use is the revocable trust. This versatile document allows parents the freedom to create a trust that works best for them and their children.

Distributions from the trust do not have to be made all at once. Parents can decide to give a specified portion of the trust to each child at a certain age. The trust can also provide a stipend for the person appointed as the children's guardian to help cover the extra expenses incurred when he or she agreed to care for the children.

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