Estate Planning Frequently Asked Questions

What is Probate?

Probate is the court process that looks after people who cannot make their own personal, health care and financial decisions. These people fall into three general categories: Minor Children (under age 18 in most states); Incapacitated Adults; and People who have died without legal arrangements to avoid probate. Probate proceedings may be expensive and time-consuming. Additionally, the court proceeding and associated documents are all a matter of public record. Many people choose to avoid probate by using a Trust bases estate plan in order to save money, spare their heirs a legal hassle, or keep their personal affairs private.

What is Joint Tenancy With Rights of Survivorship?
(in Massachusetts “Tenancy by the Entirety” when between spouses)

This is the most common form of asset ownership between spouses. Joint tenancy (or TBE) has the advantage of avoiding probate at the death of the first owner. However, joint ownership between non-married people may result in unintended consequences: the surviving owner is entitled to the entire asset, regardless of what other estate planning documents may direct. Additionally, having jointly owned assets with a non-spouse, a child for example, may subject that asset to loss through the debts, bankruptcies, divorces and/or lawsuits of any additional joint owner. For married couples, joint ownership, in lieu of estate planning may result in unnecessary estate taxes on the estate of the married couple.

What is a Will?

The document a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate. Wills have no legal authority until the willmaker dies and the original will is delivered to the Probate Court. Still, everyone with minor children needs a will. It is the only way to appoint the new “parent” of an orphaned child. Special testamentary trust provisions in a will can provide for the management and distribution of assets for your heirs. Additionally, assets can be arranged and coordinated with provisions of the testamentary trusts to avoid death taxes.

What is a Health Care Proxy?

A Health Care Proxy is a legal document in which you appoint a person to speak for you and carry out your wishes if you are unable to speak for yourself.

What does Intestacy mean?

If you die without even a Will (intestate), the legislature of your state has already determined who will inherit your assets and when they will inherit them. You may not agree with their plan, but roughly 70 percent of Americans currently use it.

What are Beneficiary Designations?

You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits and retirement accounts.

What is Durable Powers of Attorney and when do I need one?

These allow you to appoint someone you know and trust to make your personal financial decisions when you cannot. If you are incapacitated without these legal documents, then you and your family will be involved in a probate proceeding known as a guardianship and conservatorship. This is the court proceeding where a judge determines who should make these decisions for you under the ongoing supervision of the court.

What is a Revocable Living Trust?

This is an agreement with three parties: the Trustmakers, the Trust Managers, and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further “back-up” managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trustmaker’s death. With proper planning, a couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.

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