Category Archives: Inheritance

How To Prepare Estate Planning After Having a Baby

Estate planning after having children.

After having a baby, your estate planning strategy completely changes because you need to account for some important decisions that will affect your child, both now and as he transitions into adulthood. It is important to add your child to your will right away and make several other decisions related to your child in the coming years.

First, specify in your will how your assets will be divided between your heirs, including the new baby. An estate planning lawyer can walk you through the process to ensure your wishes get carried out.

Second, get a Massachusetts estate planning attorney to add a clause to your will that specifies who will care for your child if you and the child’s other parent are both unable to. Including this in your will may seem silly if you’re healthy, but it never hurts to have it there in case something happens to you.

Third, consider setting up a living trust. This is a way to protect your assets from being tied up when you die, while still allowing you full control while you are living. A living trust attorney can walk you through the specifics of this process.

Fourth, start transferring your assets to your child if you have a large estate. Tax laws allow you to make tax-free gifts of up to $13,000 per year for each child, which adds up significantly over the child’s lifetime.

Of course, there are several other things you will need to consider as well, especially if you have a large estate or if your existing will is a complicated one. Get in touch with your Massachusetts estate planning lawyer before your baby arrives so you can discuss your plans and be ready to put them in place.

Ten Reasons to Consult an Estate Planning Attorney

Helping your elderly parents face the financial and health-related challenges that come with growing older can put quite a strain on your other responsibilities. Enlisting the help of the right professionals leaves you with more time to spend with your family. Since there are complex state and federal regulations regarding wills and other paperwork necessary for settling an estate, it is best to consult an experienced estate planning attorney. There are ten specific benefits to working with an elder lawyer.

1. Ensure the last will and testament of your parent or relative is legally binding and properly designated.

2. Designate a power of attorney contract to ensure the right person is responsible for making medical and financial decisions if the person becomes incapacitated.

3. Create a living will. Living wills help your elderly relatives make their wishes clear and save you a lot of stress when the time comes for difficult decisions.

4. Avoid mistakes. A practicing estate planning lawyer can craft a strong will that covers all the bases, while most packages designed to help you do it yourself lack coverage of crucial areas.

5. Handle any business or investment transfers smoothly and without delays.

6. Address complex situations where blended or extended families are involved. Planning the estate is much more complicated if your elderly relatives have had more than one marriage.

7. Minimize the taxes heirs will need to pay by choosing the right type of trust.

8. Update and change any existing wills and estate paperwork. Changing laws and family structures make old agreements insufficient very quickly.

9. Take care of disabled family members for their rest of their life. A good probate lawyer can help craft a plan that ensures that the people in your family with special needs never go without support.

10. Make the process easier. Planning an estate is stressful for both the elderly and their helpers, but an experienced professional helps.

Top 5 Ways to Reduce Estate Taxes in Massachusetts

estate_tax_planningEstate taxes can take quite a chunk out of one’s inheritance, but there are a few ways to reduce them without getting on the wrong side of the law:

1. Charitable Transfers

Not only is giving to charity good for society, it can really reduce the level of estate taxes. This is mainly because these transfers are considered a means of reducing the total estate size. An estate planning attorney may suggest that you provide a lifetime gift in order to also reduce income taxes.

2. The Q tip trust allows married couples to reduce their estate taxes. It helps the couple to take full advantage of all federal and state exemptions. After the first spouse dies, the estate is split into three separate parts. One part is placed in a credit shelter trust. The second piece is placed in a marital trust. And the final portion can be passed directly to the surviving spouse. Depending on the age of the spouse, a nursing home attorney may be used to help divert this money to needed care.

3. Special Needs Trust

As estate holders grower older, they are more likely to become disabled. With the help of an elder attorney, a disabled senior is eligible to put money into a special needs trust for use in paying medical bills. Not only does this allow those with special needs to pay for expensive treatment, it reduces the total level of taxation on the estate.

4. Family-Owned Business

If you own a family business, your estate planning lawyer will advise you to use that information when planning your estate. There is a federal deduction allowed to those working in family-owned businesses. However, a family business needs to meet a number of specific qualifications in order to be eligible for the tax deduction. First, the business needs to be located in the United States and the owner or owners must be United States citizens. Next, the decedent must have worked with the business for at least five years and must own at least half of it. The resulting interest deduction may not be worth founding a new family business for, but it can help out greatly if you already own one.

5. Actual Use

This type of estate savings is one of the most difficult to come by, and will definitely require the expertise of a Massachusetts estate planning lawyer. You may already have noticed that real estate is valued at its highest possible value. For some people, this results in land being valued higher than it actually should be. Special permits can be obtained to lower the value to its “actual use,” thus allowing estate owners to pay a far lower tax rate than would otherwise be possible.

For more information, please contact the Law Offices of Adam Tobin, today!

Tips For Making Your Estate Planning a Smooth Process

estate-planning-paperworkIf you feel that the time has come for you, or an elderly loved one, to truly finalize your estate planning, the time is now to contact an elder law attorney or an estate planning lawyer. When you go for your consultation with a Massachusetts living trust attorney, it is important to have in mind an idea of how you would like your estate planning to go. Below are some useful tips and guidelines that will help you as you work with your Massachusetts elder lawyer.

1. Consider including a simultaneous death clause, which will pass your estate onto your children in the event that your spouse dies shortly after you do.

2. In order to disinherit a child, you must spell that out in your will.

3. Remember to keep beneficiaries on your pension, life insurance and 401K current.

4. Be sure to designate an executor as well as a back up executor.

5. Store your personal and private information in one designated location in the home, preferably a fire proof safety deposit box. This box should include important personal and financial records, as well as computer passwords and PIN numbers.

6. Understand the impact of estate taxes and discuss with your estate planning attorney some options for reducing or avoiding estate taxes.

Remember that upon your death, your family and loved ones will be going through an emotionally taxing as well as stressful time, and you will help them considerably by having your affairs in order. It is important to recognize that with age comes certain responsibilities, and that the sooner you have your estate and other affairs in order, the better off you and your loved ones will be. Contact an elder attorney with any questions you might have regarding Massachussetts and even federal law, and set up an appointment to begin the process of finalizing your affairs. You will feel at ease, and your family will be glad to know that an already taxing time will be much less stressful because of your willingness to work ahead.

It’s Never Too Early to Draft a Will: Tips and Information

Estate Planning and Drafting a Will

It’s never an easy topic to address, but if you care about what happens to your assets after death, creating a will is a prudent decision at any age.  Unfortunately, death can be unexpected and untimely; it is never too early to draft a will.

Last Will and TestamentDo I need a Lawyer to draft a will?

Today there are multiple websites and online providers of wills, while potentially cheaper than working with an attorney, using online avenues to create your will poses some serious risks.  Wills generated online or by programs are much lower quality overall.  They may not take differences in probate law among states into account, which could void your will.   If you have assets worth creating a will, you probably have enough money to make paying the little bit extra to work with an attorney worth it.

How much are standard attorney fees to create a will?

Fees vary, but it should not be difficult to find a qualified lawyer who will work with you to draft a will for only a few hundred dollars.  Besides probably having more expertise than a website or program, lawyers wish to keep their bar license and are therefore motivated to ensure that you receive a high-quality thorough document.  Additionally, the personal interaction is always a plus when creating a document that is so important to your personal life.

Lawyers can help fill major gaps in your legal knowledge and correct false assumptions that many people make.  For example, wills do not generally govern a person’s retirement account, which is usually someone’s most valuable asset.  There is a completely different set of rules that governs what happens to those assets.  However, if you work with an attorney to create your estate plan, you will have much more control over factors such as these, factors that you may have overlooked otherwise.

It’s as easy as asking a lawyer!  If you would like information or assistance with estate planning, contact The Law Offices of Adam J. Tobin today!

Reasons to Create an Irrevocable Trust

irrevocable-trust

An Irrevocable Trust is a trust that cannot be changed once it is created, and once you transfer an asset into that Trust, you usually cannot remove it. They are used for very specific reasons for the most part, and some of these reasons are:

You want to protect assets from having to be spent on long-term care costs.

The average cost of nursing home care in MA is about $10,000 per month with three ways to pay for it: 1)long-term care insurance; 2)private pay (writing a check each month); or 3)Medicaid, the state and federally-funded program that pays for long-term nursing home care if a person is both medically and financially eligible. In order to be considered financially eligible, a person cannot have more than $2,000 in so-called countable assets, and to prevent people from giving away their assets in order to qualify for benefits, Medicaid imposes a period of ineligibility following the gratuitous transfer of an asset. The ineligibility period for giving away assets is normally five years from the date of the gift. For those who feel confident that nursing home care will not be needed for more than five years, transferring assets to an Irrevocable Trust can be an effective way to preserve assets for children.

You want to keep life insurance proceeds from being taxable in your estate.

Although the new federal tax law enacted on December 17, 2010 exempts estates valued at less than $5 million from federal estate tax, Massachusetts imposes an estate tax on estates valued at $1 million or more. One common estate tax planning strategy is to buy life insurance so the surviving family members don’t have to liquidate real estate or borrow money to pay the estate tax. While life insurance proceeds are not taxable income to the person who receives them, life insurance is a taxable asset in the estate of the insured if that person is also the owner of the policy. If instead an Irrevocable Life Insurances Trust (otherwise known as an ILIT) owns the life insurance policy, the proceeds are not part of the insured’s estate.

You want to make qualifying annual exclusion gifts to minors.

Many people know they can make annual gifts of a certain amount each calendar year to any number of people without estate or gift tax consequences. Currently, the annual exclusions gift is $13,000 per calendar year per person. To qualify as an annual exclusion gift, it must be a “present interest” gift, meaning the recipient must have immediate access to and control over said gift. Parents and grandparents may want to give gifts to minor children and grandchildren, but don’t necessarily want the child to have access to funds at a young age. There is a special type of Irrevocable Trust allowed under the Internal Revenue Code that addresses this issue, which means if the Trust is properly drafted; the gifts to the Trust will qualify for the annual gift tax exclusion. However, the beneficiary’s right to gain access to the funds is restricted until the beneficiary reaches the age of 21.

You want to protect governmental benefits for a person with disabilities.

Individuals with disabilities may be eligible for a variety of governmental benefits that provide income and medical care; many of these benefits are needs-based, which means that a person may not have assets in excess of the program limit in order to qualify.

These are just a few specific reasons why using an Irrevocable trust may be appropriate for a certain situation. Everyone’s circumstances are different, and in every case, it is important to consult with a qualified estate planning or elder law attorney to develop a plan that works.

Your Trustee Duties, Explained

If you have been appointed to the position of trustee of a trust, congratulations – clearly you are thought of as someone of great judgment, patience, and honesty. A trust (a legal arrangement in which one person, a trustee, holds the legal title of an entity for another, a beneficiary,) however, is a great responsibility. Here are a few duties of the position:

1. Fiduciary Responsibility – Your actions as trustee must be held to a very high standard.  As a fiduciary (someone who holds assets in trust for a beneficiary) you must pay acute attention to the investments and disbursements of the trust.

2. Knowledge of the Trust – You must follow the directions and rules of the trust emphatically. Make sure to read the trust in detail; it is also beneficial to reference the trust when any questions come to light.

3. Standards of Investment – The investments you execute must be prudent and logical; you cannot use money for risky investments. These investments must also take into account the interests not only of current beneficiaries, but future as well. You must consider the future financial needs of the beneficiary.

4.  Distribution – Often the most important role of a trustee is the ability to set limits of the use of trust assets. When making distributions to a beneficiary, you are responsible for evaluating his or her future needs before making a decision.

5. Taxing – You will be responsible for filing tax returns and paying any taxes. You must keep good records and can turn over this responsibility to an accountant to ensure this goes smoothly.

6. Accounting – You are in charge of monitoring all income to, distributions from, and expenditures by the trust. Usually an account of this information is given to beneficiaries annually. It is important to report on income and principal separately.

7. Delegation – All above functions can be delegated. You are allowed to hire financial advisors, accountants, and lawyers to ease the burden of responsibility. You cannot, however, delegate your responsibility to the trust; you still must communicate with those that you hire as well as make any discretionary decisions.

8. Delegation. While you cannot delegate your responsibility as trustee, you can delegate all of the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation. With such professional assistance, the job of trustee need not be difficult. However, you still need to communicate with those you hire and make any discretionary decisions, such as when to make distributions of principal from the trust to one or more beneficiaries.

Acting as a trustee is an opportunity to enhance the lives of the trust’s beneficiaries, and also a great responsibility. You don’t have to do it alone! Get professional advice to make sure you are correctly fulfilling your role. Adam Tobin is an experienced living trust attorney and can help you carry out these responsibilities. Contact him today for a free consultation.

Protect Your Assets!


The time to protect your assets is now! While the estate tax may have lapsed this past year, many are convinced it will come back in full force in 2011.  According to this Wall Street Journal article, Congress is now attempting to place limits on a type of trust (called a GRAT) that many families use to avoid the tax.  A GRAT (grantor-retained annuity trust) allows the trust creator to allocate a portion of an asset’s future profits (e.g. a small business, real estate, or other money-generating assets) to heirs tax-free.  This kind of trust is the perfect way to ensure that any assets with profit potential will be protected.

This type of trust is most productive in an economic climate just like the one we are living in now – low interest rates and depressed asset values.  Because of this, and because Congress is trying to impose guidelines that impeded their success, right now is the time to set up your GRAT.  Working with an estate planning attorney as soon as possible will ensure that you will benefit the most from your future GRAT.

According to the article, Congress is attempting to impose restrictions on GRATS to raise revenue.  The restrictions could take the form of an increased time limit on the trust’s lifespan (making them much less useful for people with shorter life expectancies and less profitable to investors) or a higher percentage rate on minimum interest paid to the GRAT funder.

So with GRATs staying as they are for an uncertain time frame, estate planners are urging their clients with assets to take advantage of a GRAT before next year’s estate tax return.  As for now, until Congress acts, clients can still have short term, low interest GRATs.

To learn more about grantor-retained annuity trusts, set up a free consultation with Estate Planning Attorney Adam J. Tobin.

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Planning for Pets

While you spend most of your estate planning focused on your family and friends’ well being, there is often one slightly furrier friend that is overlooked – your pet.  There is a long history of providing for pets in the UK, and these sorts of arrangements have become much more popular in the US.

Leona Helmsley and her dog, Trouble.

Leona Helmsley and her dog, Trouble.

There have even been some pretty absurd cases in the news lately about pets being provided for – deceased billionaire Leona Helmsley left $12 million in a trust for the care of her dog, Trouble.  Tobacco heiress Doris Duke willed a $100,000 trust for her Shar-Pei, Rodeo. A traditional pet trust works in every US state and allows the pet owner to leave specific instructions to the pet caregiver.

When working with an estate planning attorney, there are many instruction options to consider.   Here are a few of the most important :

  • Food and preferred diet
  • Favorite toys
  • Cages and housing (scratch posts, dog houses etc.)
  • Grooming
  • Health care (often a specific veterinarian is named)
  • Burial or cremation upon the pet’s death
  • Liability insurance in case someone is injured by your pet

If you are considering how much money to put in your pet trust, make sure you keep in mind the animal’s life expectancy (6 to 14 years for a dog, 12 to 18 years for a cat, and 10 to 30 years for a pet bird), the expected cost of veterinarian services, and the expected cost of grooming and upkeep.

These are just a few things to discuss when considering your estate plan with an elder law attorney.  Click here for more information about estate planning, or contact elder law attorney Adam Tobin for a free consultation.

Possible Social Security Benefit Changes

Social Security seems to be moving toward its day of reckoning. According to a recent article by Philip Moeller, efforts to put Social Security on a sound long-term footing included higher tax rates for payments into the system, raising retirement ages, and treating some Social Security payments as taxable income.

U.S. Senator Herb Kohl (D-WI), Chairman of the Senate Special Committee on Aging, asked the U.S. Government Accountability Office (GAO) to review benefit options affecting lower-income beneficiaries, who traditionally are the core focus of the program. This group, and particularly older widows, depends almost exclusively on Social Security. The GAO report reviewed eight areas where, it said, benefit changes were most commonly proposed. The report looked at how effectively each proposal would help lower-income beneficiaries, whether it would have much of a financial impact on Social Security, and on how difficult it would be to administer. Here are summary excerpts of some of their findings, which will be part of a larger Social Security report due soon from the Kohl committee.
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Guaranteeing a Minimum Benefit. Guaranteeing a minimum benefit by increasing Social Security retirement benefits for those who have worked in low-wage jobs throughout their careers addresses concerns about benefit adequacy. One option would provide a minimum benefit equal to 120 percent of the poverty line for a minimum wage earner who had worked for 30 years. Another option would provide a minimum benefit equal to 100 percent of the poverty line for a 30-year worker and 111 percent of the poverty line for a 40-year worker. Social Security Administration officials said that, depending on how this option is designed, it could work well, but it is difficult to target lifetime low earners effectively.

Reducing the Marriage Duration Required for Spousal Benefits. Reducing the marriage duration required for spousal benefits is an option that targets divorced spouses. However, experts also said they do not expect this option to effectively target economically vulnerable groups. This option would not benefit women who were never married but could benefit higher-income women who are not economically vulnerable.dependent children or elderly relatives. Time spent out of covered employment as a caregiver may reduce benefits for workers, and others may not work enough to earn the required 40 credits to be eligible for benefits. One caregiver credit option would allow a specified amount of care giving time, such as three or four years, to count as covered

Providing Caregiver Credits.
Providing caregiver credits increases benefits for those who spend time out of the workforce to care for employment, and assign a wage to that time. Another design excludes a limited number of care giving years from the benefit calculation so that instead of averaging earnings over 35 years, earnings are averaged over fewer years. A third design supplements caregivers’ retired worker benefits directly, regardless of whether they took time out of the workforce for care giving. For example, an income-tested supplement could be given to increase retired worker benefits by 75 percent for those who have one child and 80 percent for those with two or more children. Both parents of a child would be eligible for this supplement, as long as the total household income did not exceed 125 percent of the federal poverty line. Retirement security experts said this option recognizes the societal value of care giving, but experts also said that, for various reasons, it may not reach its target population. For example, low-income people are less likely to be able to take time off from work. Therefore, people who have relatively higher incomes may benefit more from the creation of caregiver credits. Retirement security experts and SSA officials told us that caregiver credits would be complex to administer. A key issue is how to verify that care was provided to a qualifying person.

Read the rest of the changes here.

Have a question about social security, taxes, or other information for you or a loved one? Make sure to contact Adam Tobin to get your questions answered!