Estate Planning

Questions Frequently Asked about Estate Planning

One way of introducing estate planning is to answer some questions clients frequently ask us. We believe that these questions and answers are important enough to include here, and we hope you find them informative.


ANSWER: If you fail to plan your estate and die without a will, the laws of the Commonwealth of Massachusetts will create an estate plan for you. The entire system of “intestate” succession or “descent and distribution” is set forth by statute and is too complex for a detailed discussion here, but some surprising and frequently undesirable results can occur. The law prescribes both the persons to whom your property will pass and the division of your estate among those persons. The distributions provided by law are inflexible and may not satisfy your desires as to distribution of your estate. In addition, the amount to be distributed to your children will require a cumbersome and costly legal guardianship if the children are minors at the time of your death.

If you die without a will and you are survived by your spouse and children, not all of your probate assets will pass to your surviving spouse. One-half of your probate assets will pass to your surviving spouse and the remaining half of your probate assets will pass to your children. For the most part, a probate asset is any asset which is in your name alone at the date of your death. The problems of dying without a will are aggravated if a married couple owns a family business with fifty percent owned by each spouse as separate property. If one of the spouses dies without a will, the ownership interest of the deceased spouse will pass to the surviving spouse and minor children, and a legal guardianship will be required to manage the portion of the business interest that passes to the minor children. The surviving spouse will have the guardianship for the minor children as a “partner” in the family business. In accordance with the requirements of a guardianship, the surviving spouse may have to post a bond and make a detailed periodic accounting to a court for all business transactions.

If you die without a will and are survived by your spouse alone, leaving no children, not all of your estate will pass to your surviving spouse; part of your estate will pass to your parents. Again, such a division of your property may not accurately reflect your wishes.

If you die and are survived by your children only, leaving no surviving spouse, your entire estate will pass to your children. If they are minors, a guardianship will be necessary to manage their property.


ANSWER: Your Executor or Administrator is the court appointed fiduciary who will serve as the primary representative of your estate. An “Executor” is appointed if you have a will. An “Administrator” is appointed if you do not have a will.


ANSWER: Administration of an estate involves the collection of assets, payment of liabilities, and distribution of properties to the beneficiaries or heirs. Administration of an estate is conducted under some degree of probate court authority and supervision, but different procedures are available. If you hold less than $15,000 in probate assets (essentially assets that are in your name alone at your death), plus an automobile (regardless of value) and if you do not own an interest in real estate, then there is a simple procedure known as voluntary administration available.

Essentially the entire probate process is completed with the filing of a probate petition, the will (if there is one), a death certificate and a filing fee. If you own more than that in probate property at your death the probate process is more formal and extensive. In most instances it will take more than one year to complete a probate proceeding.


ANSWER: A trustee is one to whom property is transferred for the benefit of someone else (the beneficiary).

We find that our new estate planning clients frequently misunderstand trusts. Many of our clients have heard a horror story about a trust, and the story often involves an impoverished widow-beneficiary who cannot extract enough money from the well-funded trust to maintain herself.

Present law, well-drafted trustee powers and professional trustees now make this concept of trusts obsolete. A trust can be designed to produce almost any result desired by the client if the client gives the trustee sufficient funds with which to work. We usually recommend that trustees be given very broad and adaptable powers to provide flexibility for future events. The trustee should be empowered to do what is best for the beneficiary, without being curbed by inappropriate restrictions.

If a trust appears suitable for your estate plan, you will need to exercise care in the selection of a trustee. The family member who comes to mind as a logical first choice may prefer not to deal with the management of your properties. If a corporate trustee appears appropriate, we will suggest that you have a conference with the representative of your bank’s trust department. Further, you should consider giving someone, such as a committee, the power to change trustees.


ANSWER: Several years ago a new law was passed. It allows you to authorize another individual or entity to manage your affairs. It allows you to draft a relatively simple document known as a durable power of attorney. A durable power of attorney is a written document in which you, as the principal, designate someone you trust, such as your spouse, another family member, a friend or a professional, as “your attorney in fact” or “agent.” Your attorney in fact is authorized to perform certain acts on your behalf. You may give as much or as little power to your attorney in fact as you desire.

For instance, you may authorize your attorney in fact only to have the power to transfer your assets to a trust set up for your benefit, or the powers could be very broad and authorize the attorney in fact to do anything with respect to your assets, including for example, have access to your safe deposit box, manage your investments, run your closely held business, sell and transfer your assets. The powers you give your attorney in fact will be in effect when the document is signed. Generally, a power of attorney terminates on the disability of the principal. If the power of attorney is “durable”, it will not be affected if you become disabled or incapacitated. Not all powers of attorney are durable.

We have found that many of our clients want to appoint someone to act for them in the event of their disability.

Who should be the attorney in fact? In view of the significant authority and discretion conferred by a general durable power of attorney, the attorney in fact must be someone in whom the principal has complete trust and confidence. If the durable power of attorney is a springing durable power of attorney (that is, one that is effective only when the principal becomes disabled or incapacitated) the attorney in fact should not also be the person who determines the incapacity of the principal.


ANSWER: Your will could be drafted to be no longer than one page. Indeed, any lawyer could produce an abbreviated will for a relatively small fee.

The problem, however, is that such a will may not accomplish your objectives for your beneficiaries. We prefer to draft wills to cover all the various factual and legal situations that reasonably may be expected to arise. The alternative is to hope that, by coincidence, the will may fit the facts at your death.

Accordingly, the will that we draft for you may be a lengthy document. The burden to you of reviewing and approving a long will may be a blessing to your family when they later find that you have anticipated and resolved what might have been cumbersome problems.


ANSWER: Louisiana, Texas, New Mexico, Arizona, California, Nevada, Washington, Idaho and Wisconsin are community property states (or use a marital property regime very similar in effect to community property). These nine states use a marital property law scheme that differs from the laws in effect in Massachusetts. Under the community property system, marital property generally is deemed to be owned one-half by each spouse, regardless of the legal title to the property. In common law jurisdictions, legal title generally controls the ownership interests.

Even though you are now domiciled in Massachusetts, if you ever lived in a community property jurisdiction while married, we will perform a special review of your estate plan to account for the community property consequences.


ANSWER: The generation-skipping tax is a federal transfer tax that is separate from the gift and estate taxes. Generally it applies to a transfer of property to a grandchild (the transfer skips the child’s generation). It also applies to a transfer in trust for a child’s lifetime with the property being distributed to grandchildren upon the child’s death.

There are exemptions from the generation-skipping transfer tax. Each person may transfer up to $1,000,000 without the tax being imposed. With proper planning, a couple may transfer up to $2,000,000 before this tax is imposed.

If the tax is imposed, then the transfer is taxed at the highest estate tax rate (55%).


ANSWER: Proceeds from life insurance policies and retirement benefits will pass in accordance with the beneficiary designations. In addition, property held in certain joint tenancies with a right of survivorship (e.g. joint bank or brokerage accounts with a right of survivorship) will pass to the surviving joint account holder. Therefore, you should review the beneficiary designations and account agreements to be sure they are coordinated with your will.


ANSWER: If you die leaving minor children, the other parent ordinarily will raise and support them. If the other parent is not living, however, your minor children will require a “guardian”. A guardian is an individual who is appointed by the Court primarily to care for the person of a minor; the guardian’s power over the minor’s property is very restricted. You may appoint a guardian for your children in your will. If you fail to do so, the court will make the selection of a guardian. We recommend that you assume the responsibility for this important decision, rather than leaving it to a judge unfamiliar with your family situation.

Clients frequently tell us that they have chosen one of their parents as the guardian in the event of both clients’ deaths, but in many situations we believe that such a selection is unwise. For example, assume that the youngest child of the client is three years old and the client’s parent is sixty-eight. When that child is fifteen (a time when child-adult communication can be difficult under the best of conditions), the grandparent will be eighty. Under these circumstances, another choice may be better for your child. You should look first to your contemporaries in your families (such as brothers, sisters, or cousins). If such family contemporaries are not appropriate, then consider friends with children in the same age range as yours. In any case, you should consult with the proposed guardian to ensure that the person is agreeable to assuming the significant responsibility.

If both parents die, your minor children may be left with substantial property interests that need management and protection. Because the guardian has only limited power over the minor’s property, protective proceedings may be initiated in which the court will appoint a guardian to administer the children’s property and affairs. In some instances, the guardian may fulfill the duties of making decisions concerning the child’s medical care and personal concerns as well. A court appointed guardianship can be a cumbersome and expensive manner of dealing with the property of the minors, however, and it should be avoided. The guardianship for financial affairs can be avoided by proper planning for the use of trusts or custodianships for minors.

If you have planned your estate properly, the guardian should not experience financial strain in raising your children. We usually suggest that upon the death of you and your spouse, a trust be established for your minor children. The trustee should be encouraged to make generous distributions to assist the guardian, and the trustee can be authorized to provide funds to pay for any necessary expansion of the guardian’s home.


ANSWER: A health care proxy is a document in which you may designate an individual to make decisions concerning your health care. While you are competent you are in charge of decisions which pertain to your health care.


ANSWER: As a general rule, we suggest that you contact us every few years for a conference to review your estate plan to update the information in your permanent file. We also recommend that you contact us in the event of a dramatic change in your finances or in your family situation. For example, a substantial increase in your estate (through increased life insurance, inheritance, gifts, or successful investments) may create opportunities for tax savings, as well as necessitate further family financial planning. A substantial decrease in your net worth may also necessitate a revision in your estate plan. A divorce, marriage, or second marriage, of course, will re-open completely the matter of planning your estate. Likewise, do not hesitate to contact us any time you have questions as to whether or not changes in tax or other substantive laws may affect your estate plan. While we sometimes send information to our clients on changes in law, we do not assume the responsibility of doing so.