What Happens If You Forget to Fund a Trust?

All of the estate planning in the world can fall short if you didn’t follow through on the additional steps required after establishing the documents. One major mistake that your family members might discover after you have passed away is that you forgot to fund a trust.

Likewise, you might even discover this over the course of your life time if the intention is to transfer assets inside the trust for the purposes of asset protection planning and when you failed to do so, exposed yourself to personal liability.

Creating a trust is the first and one of the most important steps to creating a comprehensive estate plan, but if you fail to follow through and fund the trust, you don’t receive any of the benefits that you intended. The trust by itself can be functional but fails to meet its full potential until you put something inside it. Often attorneys who prepare trusts will take care of the real estate for you, such as preparing a deed in trust or preparing a deed.

This means that a real estate is officially transferred into the trust. After this has been officially recorded, the real estate is funded into the trust. You should also verify, after transferring real property into a trust, whether or not the county auditor’s office requires you to refile your real estate tax exemptions. Your insurance agent should also be contacted about any implications on that end.

Most estate planning attorneys will also help you in the additional steps required to fund your trust, such as moving personal property like appliances, collectibles, clothing and furniture into the trust. Assignments or bills of sale can be used. An assignment should only be used for those items that do not have a title of some type. You should not rely on an assignment to transfer cars, stocks or other items that have a form demonstrating ownership.

You can request an affidavit of trust or a certificate of trust directly from your bank account and you will have new signature cards issued which you can sign for as trustee of the trust. These important steps must occur in order get the most out of your trust document. Talk to your lawyer to learn more about your options.

Do Revocable Trusts Trigger Particular Tax Treatment?

Many people are interested in setting up a living trust and this can be a valuable estate planning tool. Many people are also curious about whether state and federal taxes would be due on earnings that are based on the assets inside the trust. Revocable living trusts are a powerful estate planning tool that are primarily used to avoid probate.

Probate is the court process that follows someone’s death. Unlike many other kinds of trusts, revocable living trusts do not initiate special tax treatment. The individual is still considered the owner of the assets so that person would be responsible for reporting income and earnings on the individual tax return just as they did previously. Revocable living trusts, therefore, do not receive particular or special tax treatment. Revocable living trusts are designed to avoid the headaches and expenses associated with probate, not of the estate tax system in and of itself.

Living trusts could have various provisions that could be used to minimize estate taxes such as language that initiates a bypass trust upon death but these are the same kinds of provisions that are often included in many different types of wills. To schedule a consultation with an estate planning attorney, take action today. There are many tools available to you to help you plan ahead for taxes.

What Are the Biggest Advantages of a Living Trust?

Choosing a living trust as a component of your estate plan is a wise decision and it is one that can only be made after you have carefully reviewed your current estate planning documents. These include a will and identified that a living trust may be used to complement or replace some of the planning tools you have used in the past.

Some of the most common advantages of a living trust include:

  •      You ensure that your beneficiaries avoid the probate process for assets placed inside the trust.
  •      The savings of court proceedings and probate later on in your life can be significant.
  •      A living trust is flexible and can be cancelled at any time.
  •      A trust is relatively easy to amend.
  •      Trusts are often more difficult to contest than a will.
  •      Your trust is a private document, and rarely enters the public record. A will, on the other hand, is filed in the Probate Court and is available to anyone who wants to to read it.

Putting together a living trust requires thinking about your current documents, the assets you have currently in your estate, and how you would like to pass them on to your beneficiaries. This can be accomplished by setting up a phone call or an in-person consultation with an estate planning attorney in MA who has extensive experience managing living trusts and providing you with necessary guidance about how to protect your interests going forward.


Keys to Preserving Wealth Through Multiple Generations

Keys to Preserving Wealth Through Multiple Generations

Many different people are interested in protecting their legacy as well as passing on as much wealth as possible to future generations. According to research, however, many high net worth families have lost their fortunes by the second or the third generation. Up to 70% of a wealthy family’s fortune is typically gone by the third generation and nearly 90% of it is gone by the fourth. This is why it is extremely important to consider preserving wealth through multiple generations with the help of the right estate planning strategies.

Although many high net worth families are taking conservative positions this year, it is important to consider setting up tools that will help individuals let trust and other strategies last as long as possible. Some of the tools that are typically used in this situation include multiple kinds of trusts, a family limited partnership, and an intra-family loan.

The urgency of wills and trusts cannot be overstated for a high net worth family, where it becomes imperative to calculate how much money will be passed on to future generations. Trusts provide a great deal more flexibility and control over your intentions for passing on assets and can also help to shield you from some of the public nature of a will.

Trusts offer more ability for you to outline how a beneficiary will receive the assets. This is ideal for your concerns about a spendthrift child or a beneficiary may need some time and planning to adjust to his or her new assets. Establishing that the trust kicks in at a particular age can encourage children to finish their educational goals as well.

Advanced planning is important for everyone, but especially for high net worth individuals who hope to pass on the wealth and the family legacy for generations to come. Having a relationship with the right Massachusetts estate planning lawyer is important.

The Biggest Benefits of Establishing a Trust

You might be under the impression that if you do not have many assets then you don’t have to set up a meeting with an estate planning attorney. Trusts actually have numerous benefits that can help you and your beneficiaries now and down the line.

Understanding the benefits of a trust can help you determine whether or not it’s the right fit for you. One of the most common reasons for establishing a trust is to avoid probate. This could lead to a substantial savings and paperwork, legal fees and time. Probate is the process by which a judge determines whether or not a will is valid.

A trust, however, allows your decedents to avoid this process and gain access to the property and assets much more quickly. Probate fees can also be eliminated or reduced, thus saving your family money as well. A trust also gives you better protection against possible legal action with anyone who would be unhappy about the distribution of the assets and decides to challenge it through the court systems.

Furthermore, a trust also gives you a greater layer of privacy and more flexibility over how these assets are distributed. A trust grantor determines how the assets inside the estate will be distributed to beneficiaries.

For those beneficiaries, for example, that you may worry about managing money, you can outline when and how they will receive these assets, which gives parents a great deal of peace of mind. To learn more about setting up a trust and other estate planning questions, contact a Massachusetts estate planning attorney.

How End-of-Life Discussions Can Save Your Life

Couple meeting with doctorAmy Berman is a nurse and a nationally recognized expert in senior care. She’s also a cancer patient with Stage 4 inflammatory breast cancer. In a recent Washington Post editorial, she explains that advance planning and end-of-life discussions have saved her life, even as she faces a terminal prognosis.

For Berman, that began with a decision to focus on palliative care. In other words, she and her doctors are more interested in making the rest of her life as enjoyable and painless as possible, as opposed to employing extreme treatment options that may or may not make any difference but that would almost certainly leave her feeling less than her best.

As Berman puts it, it’s about her quality of life, not quantity of days.

Palliative care isn’t always the right focus. It’s a personal choice and a highly diagnosis-dependent one. But Berman says you need to have an honest conversation with open-minded doctors (and get second opinions) to make sure you’re embarking on the best course.

But advance planning doesn’t stop in the doctor’s office. There’s a lot you can do on the legal side of things, too.

“High-quality advance-care planning discussions help people like me understand their options and make their wishes known,” Berman writes. “They can identify a surrogate to make decisions when they are unable to, and they can document their preferences in their medical records. These discussions — which should be ongoing, not just one-time — can revisit decisions in the face of new challenges…”

Wills, trusts, healthcare directives, and power of attorney are documents that all Americans should have in place, not just those living with end-stage cancer or other terminal diagnoses.

If you’d like help preparing for your own future, my Middlesex County estate planning attorney services can help. It’s never too early to talk about how you’ll handle those final chapters in life — in fact, it’s even better to have that conversation when “the end” is still a long way away! Give me a call today.

CNBC Is Shocked You Don’t Have an Estate Plan

Some headlines get right to the point.

“No estate plan? Wow, BIG Mistake.”

That was the original headline in this CNBC article about the shocking lack of estate planning among average Americans. It’s a frank title, but not an altogether unjustified one. Such widespread indifference toward estate planning is a little surprising — and certainly unwise.

“We’re all guilty of not doing what… doesn’t seem urgent,” the article says, “but there’s no excuse for not having a current estate plan—which will matter a great deal if you suddenly become terminally ill or incapacitated or die.”

Just how bad will it be? CNBS answers that rhetorical question with, well, candor:

“You’ll lose control over who gets your property and how it might be used; who cares for your minor children and how; and your own care, should you become incapacitated. The courts will also likely need to step in, at a potentially heavy cost—both financial and emotional—to those left to pick up the pieces.”

Simply put, it’s important (verging on downright necessary). Not having one is unwise, and the temporary hassle of creating a plan is vastly outweighed by the benefits and peace of mind you’ll have when all is said and done. Besides, an experienced Middlesex County estate planning attorney can largely eliminate that hassle for you.
That’s CNBC’s other big piece of advice: “Every family and financial situation is unique, so you should choose an estate-planning attorney who is not only knowledgeable in the laws of your state that govern probate, wills and trusts but also one in which you feel comfortable sharing your most personal details.”

For many years now, I’ve been helping clients of all ages prepare for their futures. My office is here to serve clients from anywhere in Massachusetts, including Arlington, Winchester, Lexington, Medford, Woburn, Burlington, Somerville, and all of Middlesex County.

If you’re ready to remedy CNBC’s jaw drop and create an estate plan of your own, I hope you’ll contact me for an initial consultation. I very much look forward to meeting you in person.

Lights… Cameras… Estate Plans? When Wills Hit the Big Screen

From Philip Seymour Hoffman and Heath Ledger to Frank Sinatra and Elizabeth Taylor, Hollywood’s dearly departed have taught us a lot about estate planning over the years.

Forbes put together a list of those lessons last year, demonstrating how creative and chaotic estate planning can be in the spotlight of fortune and fame. That had me thinking — it isn’t only the stars themselves who impart insight on the prudence of planning. Sometimes their movies do too.

Here’s a look back at a few of the greatest movies to put estate planning front and center (or at least in the middle of a juicy plot twist):

Cover of "The Aristocats (Special Edition...

Cover of The Aristocats (Special Edition)

  • The Aristocats (1970) — When you think about complex legal concepts, Disney animated features aren’t the first things that spring to mind. Nevertheless, The Aristocats offers a textbook illustration of the classic “life estate with remainder in fee simple absolute” — in other words, an elderly widow who leaves her entire estate to her cats, with the remainder to pass to her butler after the cats die. Unfortunately, the criminally inclined butler isn’t eager to wait that long…
  • The Descendants (2011) — George Clooney plays an attorney and the sole trustee for a massive family trust containing 25,000 acres of beautiful Hawaiian land. A series of accidents and unfortunate timing force his enormous family to wade through the murky waters of wills & trusts. Most interestingly, the whole plot revolves around “The Rule Against Perpetuities” (a pesky legal rule that limits some people’s future interest in property if too much time passes before the interest vests). Notably, both Hawaii and Massachusetts have adopted the same uniform version of “The Rule Against Perpetuities.”
  • The Grand Budapest Hotel (2014) — Nominated for Best Picture at this year’s Academy Awards, Hotel’s haywire plot is anchored in a controversial bequest. When an older woman dies, she leaves a very valuable painting to her much, much younger lover. Naturally, her ne’er-do-well children are less than thrilled. They challenge the validity of her will, and while that proceeding plays out with a little more madcap action than most of the real-life cases I’ve seen, it’s a great showcase for how easily miscommunication and strife can muddle an estate plan.

In Hollywood as in real life, estate planning is a potential breeding ground for epic drama — no wonder it’s a favorite topic in the screenwriting world! Of course, most of the movies’ great estate capers could have been avoided with careful planning.

What did I miss? If you have any favorite films with a focus on estate planning, please feel free to share them. And should any of these cinematic classics spark a question about your own estate plan, don’t hesitate to give me a call.

Estate Planning for People Without Children

In talking about estate plans, much of the discussion tends to focus on children. How much should they inherit and when, what kinds of trusts do they need, who should serve as guardian in the event of tragedy, etc.


What about childless couples, though? That’s a question The Wall Street Journal recently asked, and I think it’s an important point for discussion. Even for people who don’t have kids now and may never have them in the future, estate planning is too imperative to simply shrug off.

The Journal breaks it down like this. People without kids have a primary checklist with just two boxes on it:

  • Set up a distribution plan to determine who gets your property when you die.
  • Assign someone to make medical and financial decisions on your behalf should you ever become incapacitated.

That’s a rather barebones approach to nonparent estate planning, but even those two items can be trickier — and more critical — than they seem.

As an estate planning attorney, I could accomplish those two tasks for my clients by drafting a will and a healthcare directive for each spouse according to their needs, but that could still leave the door open for unintended consequences.

Without a trust, for example, assets may be subject to costly and time-consuming probate when they pass to relatives.

Whatever your approach, it’s important for childless couples to remember that even though they don’t have kids, they do have relatives, friends, and other people they care about. When they die, their assets are going to go somewhere.

Without a strategic estate plan in place, it’s possible for one whole side of the family to be shut out altogether. Often, the default statutory procedures render rather undesirable distributions. But with some careful forethought, spouses can avoid those outcomes and rest easy, knowing that their best intentions are protected.

Williams Took Care Of His Kids

5043690881It seems nobody can resist reading the juicy details of the life and death of a beloved celebrity and I am no different.

But some of the stories are simply salacious, while others are instructive. This one I found on Yahoo Finance fits into the latter category.

According to the story, the actor and comedian Robin Williams apparently didn’t leave a note prior to taking his own life last week, but details that have come out showed his estate was left in good shape, even if he might have been having financial problems, which some stories say was the case while others deny it.

What we do know from documents unearthed is that Williams in 2009 set up a trust for his three children who ranged in age from 22 to 35.

According to the story, the trust documents say that when each child turned 21 he or she would get one-third of the cash set aside for them. When they turned 30, they each would get their full share. The payout was not dependent on Williams’ death. That means he felt it was better for them to have the money while he was still alive. As it turned out, that was only partly true. But the idea is that by making lifetime distributions he could guide them and watch them build their lives responsibly.

The story did not say how much was in the trusts but said he had a significant amount of money outside of the trust and that his wife, Susan Schneider, would certainly get a healthy amount.

His net worth was once estimated at $130 million, the story said, but in 2013 he said he was nearly bankrupt. He reportedly paid his first two wives $30 million combined. Another report said he was worth about $50 million at the time of his death. He had put his $35 million ranch in Napa up for sale because he couldn’t afford it any more, the story said.

In 2013, he took a part on a TV sitcom because he needed the money. The show, “The Crazy Ones,” was cancelled after one season.