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The Law Offices of |
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Attorney Susan Klueppel |
Tel: 508-358-2656 |
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260 Boston Post Road, Suites 4 & 5, Wayland, MA 01778 |
Fax: 508-358-2787 |
Estate Settlement
When someone dies in Massachusetts leaving assets in his/her name, the Massachusetts Laws of Intestacy control the distribution of the assets, unless the decedent (person who dies) executed an estate plan that specifies where his/her property will go after he/she dies.
The estate plan can be constructed in many different ways. A few examples follow:
• The decedent may have transferred or held some or all of his/her assets in joint ownership with another, assuring the surviving owner the property upon his/her death. Often, bank accounts, investment accounts and real estate are held jointly with one or more parties. Upon the death of one owner, the surviving owner(s) become sole owners by operation of law (without any formal proceedings involving the Probate or other Court).
• The decedent may have executed a Revocable "Living Trust" with terms that dictate what assets are held and what are distributed by the trustees of the trust. The trustees may be given discretionary or restrictive authority to make periodic distributions to certain people (beneficiaries).
• Often, the decedent will fund the trust before his/her death by transferring certain property into the trust so that certain property would be immediately transferred into the legal ownership of a successor trustee upon the death of the decedent without court intervention.
• More likely, the decedent will not fund the trust, but will execute a will providing that all property he/she owns at the time of his/her death be transferred to the trustee of the trust only after the Probate Court approves the decedent's will.
Estate planning takes into consideration tax issues and the desires of the decedent; therefore, one estate plan does not "fit" all people. See also
estate planning below.
When the decedent leaves a will --
• The original will is filed with the Probate Court along with a petition for allowance of the will and a filing fee.
• The petitioner will be asked to set down a full accounting of the probate assets (those assets held solely by the decedent - that are not held jointly with another and do not provide for a beneficiary).
• After the will is allowed by the court, the petitioner is required to make a full accounting of the distribution of the assets.
• The filing of an estate
tax return is required for all taxable estates within nine (9) months of death, subject
to penalties and interest charges.
When the decedent has no will --
• If the decedent has probate assets and no will, a petitioner may file a petition for administration of the decedent's estate, asking the Probate Court for allowance of asset distribution in accordance with the Massachusetts Laws of Intestacy. This law dictates the order in which heirs may inherit property.
• For example, if a decedent leaves a wife and two children, the law specifies how much the decedent's wife will inherit and how much his children will inherit.
Sometimes there will be a
dispute by a decedent's heir or spouse regarding the legitimacy of the decedent's
will. If there is a protest, the interested person must file with the Probate
Court a specific objection to the allowance of the will.
Frequently, the reasons for the objection are incompetence of the decedent because of medical/mental disability, or undue influence being exacted on the decedent.
Usually, a trial occurs in these cases where evidence is presented by the parties to a Judge and the Judge decides whether the will is valid or not. Sometimes, the parties enter into a compromise agreement allowing a different distribution of assets than that directed by the will.
A satisfactory estate plan must take into consideration the tax consequences of any asset transfer during life or at death, and what, if any, tax consequences are attached to certain trusts (irrevocable, revocable, charitable remainder, generation skipping, etc.).
The balance of the taxable consequences of any plan must be viewed and decided by the client in light of his/her ultimate goals.
Example: Husband and wife have a large taxable estate and both wish to provide for one another after one dies, with provisions for the children when both die. Husband and wife both want to save estate taxes and agree that an estate plan that includes Marital Deduction trusts will best meet their goals.
Marital Deduction trusts allow for substantial tax savings in accordance with the Internal Revenue Service (IRS) and Massachusetts Deparment of Revenue (DOR) regulations.
Currnetly in 2004, an estate of $1,500,000.00 may be sheltered from federal estate tax when both husband and wife die. Massachusetts regulations differ in allowing $850,000.00 to be sheltered.
The "shelter" is only available to US citizens that are married to one another.
The decedent may wish to take advantage of the tax savings attached to a charitable remainder trust. That also allows him/her to receive a periodic sum over the lifetime of the trust if decedent is willing to give up total control over the assets transferred into said trust.
More often than not, a client will choose to execute a "simple will" providing the distribution of his/her assets to a specified person(s). This "will" may provide for a trust for the benefit of minor children, certain children under the age of twenty-five, persons suffering a disability, etc. The trustee of the trust will be directed to hold and distribute certain portions of the trust assets to certain persons under certain circumstances.
A client's complete estate plan should take into consideration the need for Powers of Attorney and Health Care Proxies.
A Power of Attorney may be durable (extensive and continue despite the disability of the grantor of the Power of Attorney), may be limited to access only certain assets, or may be effective only when the grantor is determined to be disabled.
A Health Care Proxy allows for medical decisions to be made on behalf of a person in the event of a disability that prevents that person from making informed decisions.
The authority to grant an agent with this decision-making ability is given by Massachusetts statute. A properly drafted and executed Health Care Proxy gives the agent the ability to make medical decisions within certain chosen guidelines dictated by the grantor of the Health Care Proxy.
The information presented at The Law Offices of Attorney
Susan Klueppel website is for general information purposes, and may be considered
advertising under the rules of professional conduct applicable to our legal
profession. It should not be construed to be formal legal advice nor the formation
of a lawyer/client relationship. Persons accessing this site are encouraged
to seek qualified counsel for advice regarding their individual legal issues.
Copyright © 2004-2007 Susan Klueppel, Wayland, MA. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.
