When a Massachusetts resident dies, the estate will be distributed in accordance with his or her estate plan. Knowing a person's wishes makes estate administration easier, but without some basic basic awareness of an estate plan, things can become unnecessarily complicated. Important, but often neglected, parts of estate planning include making a list of all assets, accounts and debts. Moreover, it's vital to keep the information up to date.
When gathering information on assets for an estate plan, some Massachusetts residents may forget about their online accounts. These digital assets also need to be included in the estate planning process. It is not always easy for heirs to locate assets in cyberspace -- especially if they do not know what to look for.
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.
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.
One main goal of the estate planning process is to avoid probate. However, for an unmarried individual or someone wanting to leave an asset to a non-spouse, avoiding the Massachusetts probate process could end up being more costly. The tax advantages that a surviving spouse receives upon the death of a spouse do not exist for any other beneficiary.
Listen to people in Massachusetts talk about estate planning long enough, and the topic of trusts will come up. However, people do not generally go into detail as to just what a revocable or irrevocable trust comprises. There are numerous types of trusts, but most fit into these two main categories.
Massachusetts residents may have heard of an ongoing probate dispute pending in a neighboring state. When an elderly woman died in Dec. 2012, it was discovered that she had left a substantial amount of her assets to a police officer she had developed a relationship with after he answered a call about an intruder at her home. Now, objections have been filed in the woman's probate regarding the $1.8 million in assets it is estimated were left to him. The officer has been accused of unduly influencing the elderly woman, causing her to leave him the assets, but those accusations were determined to be unfounded in one investigation.
It isn't only rich people that can benefit from using trusts. As an estate planning tool, they can be useful to anyone in Massachusetts with assets such as real estate, life insurance policies, retirement accounts and any other assets that will eventually passed on to heirs. A living revocable trust can be drafted and executed to keep those assets out of probate, reduce tax liability and otherwise protect the assets.
After a death in the family, the surviving members typically have much to deal with. If the deceased took the proper steps to establishing a will before their demise, it may be easier for the estate to handle the concerns left behind after a death. Typically, one of the most common issues dealt with is the division of certain property. However, before assets are divided, it is important to ensure that any remaining debts have been taken care of.
Estate planning is designed not only to protect a person's heirs and beneficiaries from having to pay estate tax, but also to keep assets out of probate. However, there are times when trying to avoid the probate process could end up doing more harm than good. This is especially true since the process is largely uneventful for most Massachusetts families.