How to Ensure That Your Estate Plan Reflects Your Life as You Get Older

Most individuals in their 50s have at least broached the subject of estate planning by consulting with a lawyer or taking a look at any wills that they’ve created years before. With many individuals today living well into their 70s and 80s, it is important as well to keep your estate planning documents up to date as you move through the aging process.

You may have different concerns at different stages in your life. For example, while in your fifties you may be caring for your own children while also helping with aging parents. This is a great opportunity to update your own estate plans and check on whether your parent’s plans are accurate, too. In your 60s you may want to update your plans to reflect the current state of your family.

Perhaps your adult children have had grandchildren or perhaps you have even gotten divorced yourself and remarried, which means that family law and estate planning intersect in unique and sometimes challenging ways prompting an update in your documents. In your 70s, you want to ensure that your estate plan is still on track and take an inventory of your assets.

Reviewing your beneficiaries and notifying your family about the planning that you have done and where they can locate it in an emergency situation is strongly recommended. In your 80s, you may be asking for someone to assist you with the management of your finances and you could also be looking into charitable giving as an option.

A Massachusetts estate planning attorney can help you with these complex concerns.

Key Tips to Help Maximize the Value of Parental Assets as They Age

House on pile of moneyThere may come a time when your parents turn to you as the adult child and request your assistance in helping them put together their estate plan or manage their assets appropriately.

This is a worthwhile concern as you or other beneficiaries may stand to benefit from all opportunities to minimize tax obligations and maximize the value of assets. Furthermore, you are doing a good deed by helping your parents stay organized and understand how various state and federal laws affect them.

  • There are several different tax saving strategies that you can implement in order to maximize the value of their assets. These include:
  • Encouraging them to keep stocks that have gains and selling stocks that have losses.
  • Using trusts to protect assets and avoid the probate process.
  • Evaluating their estate planning documents on a regular basis to ensure they are still valid and accurate for your parents’ needs.
  • Encourage your parents to take advantage of gift taxes. Each individual in the U.S. is allowed to give up to $14,000 per year to other people. If your parents have an estate large enough to be subjected to the estate tax, then minimizing their tax liability by giving things away while they are still alive can benefit them.
  • Consider situations in which you may be eligible to claim your parents as dependents if they qualify.

Consulting with a dedicated estate planning attorney in Massachusetts can help you accomplish the vast majority of goals associated with your needs and their concerns.


Three Youthful Myths About Estate Planning for Millennials

Funny day with the best friendsBlitheness is the prerogative of the young. Arguably, no generation has better exercised its right to youthful nonchalance than the Millennial one, known for its “Peter Pan” reluctance to embrace the burdens of adulthood.

Then again, maybe that isn’t fair. Millennials might think about growing up in different terms than those who came before them, but they are also coming of age in a different world than the one we grew up in.

And who’s to say they aren’t responsible? The New York Times recently reported that more and more young people — even without a family of their own — are beginning to make estate plans. That’s something those of us who practice estate law have been recommending to young Americans for a long time, but the message has often fallen on deaf ears. It’s nice to see that changing.

The Times report notwithstanding, though, there may still be a pervasive sentiment among Millennials that estate planning is a concern for their far-off futures.

Financial e-magazine The Street recently argued on behalf of estate planning for Millennials, and we might match the points they made to three common myths among the young:

1. Young people don’t own anything of value. That is surely a myth. Most Millennials do indeed have estates of their own. While they might not own homes, their possessions can still add up to a lot, not only in terms of financial worth but also sentimental value. That needs to be accounted for.

2. Estate planning is for rich people. This myth is popular among people of all ages, but it is equally untrue for all of them. Everyone has assets. You don’t have to be wealthy to own things that matter. Moreover, even in the absence of high-dollar assets, you still have a body. Healthcare directives, powers of attorney, and other documents are all essential for making sure that someone will make the right decisions for your health and welfare if you’re ever unable to.

3. There’s still time to do it later. That’s an easy assumption to make, especially while you’re young, but the truth is that none of us have that guarantee. Unexpected accidents, illnesses, and deaths have left many families in terrible binds. Young people can alleviate enormous burdens for their loved ones by putting an effective estate plan in place now.

If you’re a young person (or the parent of one), and you’d like to learn more about estate planning for Millennials, I can help. Give me a call.

When Family Matters Are Messy, an Attorney Can Help

Rich elderly man with gold-digger companion or wifeFamily issues can be so tricky. The Chicago Tribune recently ran a story about an elderly father with a much younger girlfriend. He’s handed over a large portion of his assets to his new love, much to the chagrin of his now-grown children.

They say the girlfriend is out for their dad’s money. She says she’s his caregiver and they’re very much in love. The father agrees with her, and it’s his money. But is he of sound mind? So far, a doctor hasn’t said anything to the contrary, but the adult children believe that just such a declaration isn’t too far off in the future.

Meanwhile, an impartial observer looks at the whole situation and simply shrugs. Who’s to say who’s in the right here?

As a Massachusetts estate planning attorney, part of my job is to walk my clients through thorny family issues like the one contemplated in the Tribune. The issue of who’s “right” matters in some cases more than others. Often, there is a practical path to be found, one that leads to a better outcome than emotionally entangled relatives might be able to reach on their own.

Advance planning and honest communication are both key to the whole process. With respect to the latter, part of my job as the estate planning attorney is to make sure that you, the client, have a clear understanding of whose interests I represent (i.e. yours).

Maybe what’s best for you isn’t what’s best for your children or your significant other. The nice thing about a private meeting in our office is that we can consider those kinds of questions coolly, calmly, intelligently, and confidentially. I can answer all your questions and help you reach a decision that is ultimately yours to make — and yours alone.

If that sounds like a conversation you’re ready to have, give me a call. I’d love to help.

Blended Families Have Unique Estate Planning Needs

There is no such thing as one-size-fits-all estate planning, and that’s especially true when it comes to blended families in Massachusetts.

When you think about it, even “nuclear families” (a husband and wife who’ve never been married before and maybe have a couple of kids together) have their work cut out for them when creating estate plans. Most families have amassed their fair share of assets — even if it’s just a trove of trinkets with little more than sentimental value. Fairly providing for everybody in the family takes times and consideration.

Add divorce, second marriages, stepparents, and step kids to the mix? Then things really get complicated.

I recently came across a helpful article on this subject in Gannett’s The Spectrum, an online news magazine. It focuses on the single biggest estate-planning dilemma that any member of a blended family faces: balancing the many competing interests in a network of “exes” and “steps” who might not see eye to eye.

“Your challenge,” Spectrum tells blended families, “is to divide your assets among your heirs according to your wishes, while minimizing both estate tax and animosity among family members.” Easier said than done! With the right strategies in place, though, it can be accomplished.

In “nuclear” or “original” marriages, there is a temptation among spouses to simply leave everything to each other. That isn’t an ideal approach for anyone, but it’s especially problematic in the blended context.

Consider, for example, someone who had kids in her first marriage and then remarried and had additional children in the second marriage. Leaving everything to the new spouse might more or less take care of that second family (though not without some potential problems), but what about the children from the first marriage?

Of course, that’s just one example of the “blenders’ burden.” Families are complicated and so are the laws of inheritance. There is a lot to consider, so it’s generally not a good idea to try to square everything away on your own.
If you’re in a blended family, it might be time to update your estate plan to account for the latest changes in your life. If you’d like some experienced counsel and advice along the way, I’d be happy to help. Just give me a call.

Lessons Learned From A Multi-Millionaire Janitor

We don’t often hear about the passing of unassuming, elderly janitors… but when they leave secret multi-million dollar fortunes behind, that tends to get newspapers’ attention.Man mopping factory floor

Ronald Read lived in Vermont his whole life. He worked as a soldier, then a gas station attendant, and then a J.C. Penny janitor. He was well liked but lived a simple life, reportedly working right up until his death last June at the age of 92.

Upon his death, his friends and family were shocked to learn that he’d acquired nearly $8 million in stock holdings and assets over his life — and he left almost all of it to charity.

In reflecting on Read’s incredible story, The Washington Post says there are both lessons to learn and mistakes to avoid. Let’s look at a few items from each of their lists.

What Read Did Right, According to The Washington Post

  • Patience. Read held a lot in stocks, but he rarely traded. He owned most of them for many decades.
  • Dividends. “Read was not an active trader,” the Post says, but “he was an active buyer. There is a very big difference.” Read preferred stocks that paid regular dividends. He then used those dividend checks to buy more shares of the same companies.
  • Diversity. Read owned many different kinds of stocks, but he avoided technology and anything trendy.
  • Philanthropy. By designating charitable beneficiaries for his assets, Read was able to significantly reduce his estate’s tax burden. (In fact, in his case, the whole fortune passed tax free).
  • Revocable trusts work well. Read had one, and it made life much easier for his beneficiaries.

What Read Did Wrong (By Post Standards)

In praising his financial prudence, the Post is quick to question whether Read really made the most of his life. Friends and family say he did not enjoy his retirement. They wonder whether he might have been happier had he loosened the purse strings and “lived a little,” so to speak. Maybe.

Of course, most of us are driven to do that which we enjoy most. Who’s to say that Read didn’t lead exactly the life he found most fulfilling?

Whatever we might make of his frugal ways, the Post is absolutely right about one thing — we can all learn a lot of lessons here. Financial responsibility pays off. So does planning. Life is short. And above all else, never judge a book by its cover.

How Reverse Mortgages Can Lead To Problems For Your Children

According to a recent New York Times article, children of parents who took out reverse mortgages to cover the cost of long-term care are increasingly faced with a difficult choice—watching helplessly as the family home goes into foreclosure, or losing their inheritances to pay back the loan and protect the home.


(Photo credit: james.thompson)

While there is no specific data on the number of heirs facing foreclosure as a result of reverse mortgages, interviews with elder law advocates, housing counselors, and heirs suggest that the problem may already be impacting tens of thousands of people. And the problem could become worse. The combined debt of seniors between the ages of ages of 65 and 74 is rising faster than the debt of any other age group. Some will turn to reverse mortgages to pay their debts. Meanwhile, 13 percent of outstanding reverse mortgages are underwater, and create a financial crisis for the heirs forced to deal with the mortgages.

The problem for heirs of parents who have passed away with reverse mortgages seems to be twofold. The law requires that lenders offer heirs 30 days from when the loan is due to decide what they wish to do with the property. Furthermore, heirs are supposed to be given six months to arrange for financing if they want to keep the home. It would appear that many lenders are not informing the heirs of these options, and instead initiating foreclosure within a matter of weeks.

The other problem centers on what is known in the industry as the 95 percent rule. Heirs are permitted to pay 95 percent of the current fair market value of the property to buy out the reverse mortgage. But the housing crises from a few years ago has rendered today’s market value significantly below what the heirs’ parents paid for their reverse mortgage. The disparity between the current value of the home and the mortgage often forces heirs to opt for foreclosure rather than trying to keep the family home, or at least keep it long enough to sell it on their own.

If you are considering a reverse mortgage to pay for long-term care costs, I invite you to contact me for a consultation. I can show you other ways to pay for the care you need, and preserve your hard-earned assets for the enjoyment of your well spouse and your loved ones.

Why Create a Trust?

Due to changes that limited federal estate tax to only high valued estates, many people believe there is no reason to set up a trust to guard their assets. However, a recent article outlines five reasons that trusts might be the right choice even for smaller estates:

    1. Holding assets in trust may allow estates valued at over 1 million dollars to avoid significant Massachusetts tax liability.

    2. A trust will avoid the often long and costly, and always public, probate process, where the will, the accounting of the estate disbursements and revenue, and the probate asset inventory will all be available to the public.

    3. Allowing assets to be distributed through a trust will give parents the ability to moderate how much access a young child has to a house, life insurance, retirement assets, or cash, so that the children are not put in a position to misuse estate assets. It may also help where there is concern over poor money management skills, business liability, or creditor problems.

    smiley mom and daughter on grass

    (Photo credit: MyTudut)

    4. A child’s eligibility for public benefits can be affected if the child receives an inheritance. Whereas, holding assets in trust for the benefit of the child will help ensure that the child remains eligible and that resources are there to provide care over the long term.

    5. A revocable trust also gives a person the ability to determine how he or she will be cared for and how decision will be made in the case of incapacitation.

Learn From These 6 Estate Planning Mistakes of NFL Players

In honor of the Big Game, a recent article explains six of the estate planning mistakes that NFL players commonly make. While not everyone will earn as much as an NFL star, the average American can still benefit from avoiding these mistakes in their own lives.

NFL Football player Troy Smith drinking Gatora...

(Photo credit: Wikipedia)

1. Living in the present, instead of planning for the future: NFL players earn most of their lifetime income in their 20s and 30s, and then retire early. As a result, it is especially important for them to plan for retirement early.

2. Choosing the wrong professional adviser: NFL players sometimes make the mistake of choosing a family member to help with financial planning instead of an estate planning professional. This can be a mistake if the family member is not experience in managing large quantities of assets.

3. Spending beyond their means: It is important to spend based on the cash you have available, not the salary total that appears in a contract.

4. Not maintaining liquid funds: Maintaining liquid funds to cover living expenses in case of an emergency is especially important for NFL players, who could experience a career ending injury at any moment.

5. Leaving assets exposed: Assets can be protected from creditors through trusts, incorporating limited liability entities, and under any state laws that protects specific assets, such as a person’s home.

6. Failing to see the bigger picture: Because NFL players retire earlier than most Americans, it is especially important for them to consider how they will live during retirement. Plans for a second career or to starting a business should be reflected in the estate plan.