The Sykes Law Office

What Are The Advantages to Estate Planning?

By taking the time and effort necessary to plan your estate, you will be able to:

1. Provide for your immediate family
   Couples want to provide enough money for the surviving spouse. Couples with children want to assure their education and upbringing. If you have children under 18, both you and your spouse should have a will nominating personal guardians for the children, in case you both should die before they grow up. Otherwise, a court will decide without your input where your kids will live and who will make important decisions about their money, education, and way of life.
   
   
2. Get your property to beneficiaries quickly
   Options include insurance paid directly to beneficiaries, joint tenancy, and living trusts, as well as using simplified or expedited probate and taking advantage of laws that provide partial payments to beneficiaries while a will is in probate.
   
   
3. Plan for incapacity
   During estate planning, you can also plan for possible mental or physical incapacity. Living wills and durable health-care powers of attorney enable you to decide in advance about life support and pick someone to make decisions for you about medical treatment.
   
   
4. Minimize expenses
   Good estate planning can keep the cost of transferring property to beneficiaries as low as possible, leaving more money for your beneficiaries.
   
   
5. Choose executors/trustees for your estate
   Choosing competent executors/trustees and giving them the necessary authority will save money, reduce the burden on your survivors, and simplify administration of your estate.
   
   
6. Ease the strain on your family
   You can take a burden from your grieving survivors and plan your funeral arrangements when planning your estate. Or you may want to simply limit the expense of your burial or designate its place.
   
   
7. Help a favorite cause
   Your estate plan can help support religious, educational, and other charitable causes, either during your lifetime or upon your death, and at the same time take advantage of tax laws designed to encourage private philanthropy.
   
   
8. Reduce taxes on your estate
   Every dollar your estate has to pay in estate or inheritance taxes is a dollar that your beneficiaries won't get. A good estate plan can give the maximum allowed by law to your beneficiaries and the minimum to the government.
   
   
9. Provide for people who need help and guidance
   Do you have an elderly parent or disabled child, or a grandchild whose education you want to assure? You could establish a special trust fund for family members who need support that you won't be there to provide.
   
   
10. Make sure your business continues smoothly
    If you have a small business, you can provide for an orderly succession and continuation of its affairs by spelling out what will happen to your interest in the business.

A properly drafted will ensures that your assets will be distributed, upon your death, to the beneficiaries of your choosing rather than the beneficiaries determined by Massachusetts State Law (M.G.L. c. 190).  If you have minor children, you should designate in your will the person who you wish the court to appoint as guardian of your children.  Also, if you have specific assets (jewelry, heirlooms, etc…) you wish to go to specific heirs, you can make those specific bequests in your will.  If there are heirs you wish omit, it is important to state that in the will to avoid contests.

In Massachusetts any person at least 18 years of age may make a will.  The will must be in writing, and signed by the testator in the presence of two competent witnesses.  Each witness must sign in the presence of the testator.  If the testator is unable to sign, he or she can direct another person to sign in his or her presence. 

Revocable Trusts

Most people want to leave as much of their money to their children, or other heirs, as possible -- and want to avoid a big chunk of that money going to probate fees. That's where living trusts come in -- they can help in avoiding probate and probate fees.

Probate involves inventorying and appraising the property, paying debts and taxes, and distributing the remainder of the property according to the will. When you make a living trust, your surviving family members can transfer your property quickly and easily, without probate. More of the property you leave goes to the people you want to inherit it.

A basic living trust allows property to avoid probate and to quickly and efficiently pass to the beneficiaries you name, without the hassles and expense of probate court proceedings. A married couple can use one basic living trust to handle both co-owned property and separate property.

To create a basic living trust, you make a document called a declaration of trust, which is similar to a will. You name yourself as Trustee -- the person in charge of the trust property. If you and your spouse create a trust together, you will be co-trustees.

Then you transfer ownership of some or all of your property to yourself in your capacity as trustee. For example, you might sign a deed transferring your house from yourself to yourself "as trustee of the Jane Smith Revocable Living Trust dated July 12, 2010." Because you're the trustee, you don't give up any control over the property you put in trust.

In the declaration of trust document, you name the people or organizations you want to inherit trust property after your death. You can change those choices if you wish; you can also revoke the trust at any time.

When you make a living trust, you should also make a back-up will. Doing so will ensure that any property not transferred to the trust will go to the people or organizations you want to receive it. If you don't make a will, any property not included in your trust will be distributed according to the laws of your state -- usually to the nearest relatives.

When you die, the persons you named in the trust document to take over -- called the successor Trustees -- transfers ownership of trust property to the people you want to get it. In most cases, the successor Trustee can handle the whole thing in a few weeks with some simple paperwork. No probate court proceedings are required.

2. Decide what items to leave in the trust.
You probably don't want to hold all your property in your living trust -- just the big-ticket items that would otherwise go through probate.

3. Decide who will inherit your trust property.
For most people, choosing family members, friends, or charities to inherit property is easy. After you make your first choices, don't forget to choose alternate (contingent) beneficiaries, too.

4. Choose someone to be your successor trustee.
Your trust must name someone to serve as "successor trustee," to distribute trust property to the beneficiaries after you have died. Once you've made your choice, discuss it with the person you have in mind to make sure he or she is willing to take on this responsibility.

5. Choose someone to manage children's property.
If children or young adults might inherit trust property, you should choose an adult to manage whatever they inherit. To give that person authority over the child's property, you can make him or her a property guardian, a property custodian under a law called the Uniform Transfers to Minors Act (UTMA), or a trustee. 

6. Prepare the trust and sign it in front of a notary.
After making your trust, or having an estate planning attorney prepare one for you, you (and your spouse, if you made a trust together) must sign it and a notary public must take your authorization that signing the document was your free and unforced act. Once that is done, you keep the original and one or two copies. Make sure to keep them in a safe place where you will remember where they are.

7. Transfer title of property to yourself as trustee.
This is a crucial step that, unfortunately, some people never take. But to make your trust effective, you must hold title to trust property in your name as trustee -- for example, if John Smith wants to hold real estate in his trust, he must prepare and sign a new deed transferring the real estate to "John Smith, Trustee of the John Smith Revocable Living Trust dated June 4, 20xx."

8. Store your trust document safely.
Tell your successor trustee or trustees where the trust document is and how to get access to it when the time comes.

Durable Power of Attorney