Monthly Archives: January 2012

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!

What is the Difference between Personal Property and Real Property

Let your Massachusetts Estate Planning Lawyer help you with real property.

Let your Massachusetts Estate Planning Lawyer help you with real property.

When it comes to estate planning, the most important step is to find an elder law attorney. It helps to have an impartial mind at work to make sure your assets are taken care of properly. A Massachusetts elder lawyer can help with wills, set up trusts and making sure that documents concerning transfer of property are done correctly. Most importantly, you’ll be able to ask questions throughout the process. One topic of discussion with your estate planning lawyer will be the difference between personal property and real property. Both are defined by Federal Law.

Real property is your land and any structures you have built on that land. This can include your home, commercial and/or agricultural buildings. As an example, if you own a farm, your real property includes the acreage of that farm and all buildings on that farm.

Personal property includes all other property, such as cars, boats, clothing and furniture as well as stocks, bonds, bank accounts and other personal items. Going back to the farm analogy, your barn would be your real property, but your tractors and other farm equipment would be considered personal property. Changing this to a city scenario, your house is real property, but all the furniture, appliances (except built-in) and your car are personal property.

It is important to understand this concept when planning your estate. When land is transferred, whether by sale or inheritance, by law all real property is included in that transfer. Unless there is a specific agreement, personal property is not included. Your estate planning lawyer will make sure that the details of your estate outline any such special agreements.

Planning an estate can be a complicated issue. Some of the forms, particularly to do with the transfer of property, are complex and there is no room for error. Protect your family’s future, and preserve your peace of mind by getting an elder lawyer to help with that planning. Contact the Law Offices of Adam Tobin.

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, you should 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 401(k) 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 us with any questions you might have regarding Massachusetts 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.