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Boston Elder Law Blog

The benefits of wills, trusts and other estate planning documents

Massachusetts residents frequently hear that they should have an estate plan. However, some may not be aware of why it is important. Wills, trusts and other estate planning documents provide an individual and his or her family with numerous benefits.

Having an estate plan takes the guesswork out of what to do if an individual becomes incapacitated or passes away. Family members can receive clear instructions on how to care for a person should he or she not be able to make crucial healthcare and financial decisions through powers of attorney and advance care directives. Wills and trusts outline how assets are to be distributed upon death.

Failure to update wills could cause problems: Whitney Houston

Many Massachusetts residents have heeded advice to draw up an estate plan. However, once those documents are signed, many people put them aside and do not think about them again. Unfortunately, when wills are not reviewed periodically and updated as needed, problems can occur for those left behind after loved ones pass away.

For instance, Whitney Houston drew up her will nearly 20 years before she died. In that will, she dictated how her daughter, Bobbi Kristina, would inherit her share of the singer's fortune. Beginning at age 21, she would inherit 10 percent, which turns out to be somewhere between $12 million and $20 million.

Do changes need to be made to a revocable trust when relocating?

When moving to a new state, many issues need to be taken into consideration. One of the issues that many people may fail to consider is whether changes need to be made to a revocable trust or other estate planning documents. Every state, including Massachusetts, has its own legal requirements for these documents, which may differ from the state an individual is either coming from or to which he or she is going.

In general, every state will recognize estate planning documents from another state. However, there could be differences that complicate matters for family members when an individual either becomes incapacitated or dies. A periodic review of an estate plan is always recommended, but when relocating to a new state, such a review takes on a new importance.

Are wills enough to provide for Massachusetts pets?

For many Massachusetts residents, their pets are part of the family. Therefore, it only makes sense to provide for them in the event of incapacitation or death, just like any other family member. Many people use their wills to give their pets a new home after their death, but that may not be enough.

First, precious time can be wasted in getting pets to their new homes while a will is in probate. Second, a will only applies after death. If a person becomes incapacitated through illness or accident, the immediate future of an individual's pets is uncertain.

Eric Carr's estate sues KISS as part of its estate administration

Many Massachusetts music fans know that Eric Carr was the second drummer for the iconic band KISS. During his time with the band, he wrote four songs for which he received royalties. When he died in 1991, the estate believed it continued to receive royalties for those songs from all relevant sources. Recently, the estate discovered that was not the case, and as part of an ongoing estate administration, it filed suit against KISS and others.

Reportedly, the estate was under the impression that it was receiving all of the deceased drummer's royalties from one source. Further, one of the songs, "Little Caesar," was originally copyrighted in 1989. Carr was listed as the author of the song at that time. However, when it was re-registered the year after Carr's death, his name was not listed.

Taking it a step beyond wills and trusts

Massachusetts residents have often heard that an estate plan is essential in order to provide for loved ones after death. Many people know that wills and trusts are the most often used documents to pass on assets to heirs and beneficiaries. However, another step could help the executor of the estate and family members after an individual passes away.

Wills and trusts deal with the mechanics of how and to whom assets are to be passed on to the next generation. However, any specifics, including the thought process behind how the estate is structured may not be in those documents. Account numbers, locations of assets and information regarding real property are just some of the things that an executor and family will need to know upon death.

Celebrities prove that wills are good, but trusts may be better

In recent years, many celebrities have passed away in what would be considered by some Massachusetts residents as well before their time. However, before they passed into Hollywood history, there was one last story to tell. Many of these celebrities' estates became public because they relied on wills alone to pass the bulk -- if not all -- of their estates.

James Gandolfini may be the most shocking example of someone with a high net worth leaving heirs to pay millions of dollars in taxes since he only had a will. Of his estimated $70 million estate, the IRS inherited nearly $30 million. Even so, taxes may not have been the focus of his estate plan. Leaving a sizable inheritance to his sister may have cost her significant taxes regardless.

Recent tax changes affect how assets are transferred to heirs

One of the most challenging aspects of estate planning for Massachusetts residents is deciding how best to protect heirs from hefty tax bills associated with an inheritance. Certain assets may be best passed on after death while others may provide the maximum benefit to the heir while the individual making the bequest is still alive. For many people, these decisions may not be difficult since the new federal estate tax exemption was raised to $5.34 million per person for this year.

Further, a married couple may share their exemption through a concept known as portability, for a total exemption of $10.68 million. The amount is expected to continue rising over the next 20 years. Most people will not need to consider federal estate tax issues at this level. Other assets that could appreciate significantly may not be subject to estate tax, but they may be subject to capital gains tax.

Need for Massachusetts long-term health care planning on the rise

A recent study indicates that nearly 70 percent of all Americans age 65 will need some sort of long-term care. The level of care needed depends on many factors, but once that level is determined, finances often dictate from where that care will come. Long-term health care planning can give Massachusetts residents more options when the time arrives.

Taking care of an aging family member used to typically mean a nursing home. Now, options such as in-home care and assisted living are available and growing in popularity. These options allow for a greater amount of independence, which is important to the quality of life a senior has as he or she ages. Home health care offers the greatest amount of independence. Wide varieties of services are available depending on the individual's needs at reasonable prices.

Avoiding conflict in Massachusetts estate administration

Massachusetts executors and trustees have the sometimes unenviable task of ensuring that all of the beneficiaries and heirs are satisfied. This can be a difficult task when emotions are running high. Avoiding conflict in estate administration may not always be easy, but there are ways to diffuse confrontations that could jeopardize the process and, ultimately, the inheritances of the heirs and beneficiaries.

Families are often wonderfully complex. They may rally around one member when he or she is being attacked from the outside, but inside the family circle can be a much different story. Those same personality conflicts can surface when a key family member passes away -- especially when a large inheritance is at stake.

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