Frequently Asked Questions

A Will is a written document with the instructions for your executor (called a Personal Representative of your Estate).  It provides detailed information on how you want to divide your property after your death.  It will also nominate a guardian for your minor children, which makes the process much easier and smoother for the proposed guardians.  It also ensures that the person(s) you want to care for your children after your death is known.   

Your Will can have specific bequests of both personal property (jewelry, automobiles, artwork, collections, etc.), real property (real estate), and your liquid/monetary property (bank accounts, investment accounts, stocks, etc.). 

A Will becomes public record, as it will be filed with the Probate Court in the county in which you lived.  Once the Will is probated, by filing the Will and the appropriate documents with the court, a Personal Representative (known as a “PR”, who is the nominated Executor of your Will) will be appointed.  They will then have the authority to gather the assets and distribute them pursuant to the terms of your Will.  They will have authority to manage real estate and pay any bills owed by the estate. 

It is possible to nominate more than one personal representative in your Will, and to name an alternate or back up representative.  If you are married, you will typically nominate your spouse, along with a backup or alternate PR. 

Note that your probate estate does not include "non-probate" property, such as jointly owned assets (which automatically go to the co-owner); property held in trust; life insurance benefits/proceeds; retirement account benefits which have a named beneficiary; and brokerage accounts which have a named beneficiary. 

If you die without a Will (known as dying “intestate”), then your heirs will have to choose who will administer your estate, and the laws of Massachusetts will determine to whom your probate property goes, without you having a say in the process.  What the law requires may not be what you would want to have happen.  Having a Will can help keep harmony amongst your heirs after you die and leaves no questions for your beneficiaries as to what you wanted to have happen.  It provides peace of mind to you and your heirs. 

Additionally, if you have a minor child who requires a guardian, but die without a Will, then the Probate Court has no input from you as to who should serve as guardian of your children.

Probate proceedings often cause delay in the administration of your estate.  Keeping your probate estate low can reduce the fees and expenses, particularly if your estate is relatively small and tax planning is not a consideration. This can be done by holding property jointly with your intended beneficiary, creating a "transfer on death" account, making your life insurance and retirement benefits payable directly to a beneficiary, or putting your assets into a lifetime trust. However, each of these approaches has drawbacks, and none should be taken without thought on your part and good advice.

A trust is a written agreement between you, and a trustee or trustees, who promise to hold your money and assets pursuant to the terms you specify. It enables you to distribute your property in ways that reflect your wishes. A trust is flexible and allows you to provide for the lifetime needs of a spouse, a child, or an aging parent-- while keeping control of the final beneficiary of your assets. While a trust is in existence, it can protect the property held in trust for the beneficiaries and keep it from the reach of creditors and others. If you have significant assets, it is required for any good tax plan to avoid estate taxes upon death. 

A trust will last much longer than your probate estate, and the trustees must not only be good investors but sensitive to your beneficiaries’ needs. Sometimes it is a good idea to have one trustee who knows how to handle money, and one who knows the family well.  As such, choosing your trustees is a very important step in the process. 

There are banks and law firms that offer trustee services, and there are a number of individuals and small companies who specialize in this work. A professional trustee not only provides you with experience and organization, but can also provide good investment advice. However, a professional trustee will not necessarily know your beneficiaries’ needs.  As such, you should consider nominating an additional trustee for that purpose. You may also choose to rely solely on family members or friends to be trustee, particularly a family member or friend with a good business sense. 

It is very important to plan for decision-making by others during your life, should you become incapacitated—either temporarily or permanently. A Power of Attorney and Health Care Proxy enable you to choose the people who will manage your finances and make health care decisions for you, if you become unable to act on your own behalf. If you do not have a Power of Attorney to nominate your intended guardian, then your family would need seek a court appointment of a guardian to make those personal decisions on your behalf, as well as a Conservator to manage your finances. These are public proceedings and they can be costly and time-consuming. 

A durable Power of Attorney will name an agent (your “attorney”) who can pay your bills, access bank accounts, invest money, file tax returns and rent, buy or sell property while you are incapacitated-- or you could simply be in need of assistance due to an absence or illness. Your agent will have the authority to financially support you and those who are dependent upon you for support.  They can also fund your trust and make gifts.  You can choose how narrow or broad you want your agent's power to be. Finally, if you have a child with special needs, you can nominate a guardian for your child who will serve in your place when you are no longer able to do so. 

A health care proxy allows you to select an agent who will make health care decisions for you if you are unable to do so on your own.  It’s important to have a detailed conversation with your health care agent as to your wishes in regard to life support and long term care.  

Both the federal and Massachusetts governments levy an estate tax, but only if the size of your "taxable estate" exceeds a set amount (often referred to as the "exemption amount") at the time of death. The taxable estate includes both probate and non-probate property, to the extent that a decedent has power to control where the property goes. As such, life insurance is typically included, because the insured person usually retains the power to change the beneficiary. Jointly-owned property is also included, but the amount taxed varies depending upon the relationship of the co­ owners. Married couples are treated as if each owned 50% of jointly-owned assets at death, while up to 100% of assets owned jointly with another person will be included-- to the extent the funds contributed came from the decedent. Fees, debts, expenses, and charitable bequests are deducted, as is 100% of property passing to a surviving spouse. Special rules apply to married couples if one or both members are not U.S. citizens. 

The federal government may also tax gifts made by you while living in excess of $16,000 per year per person (with future adjustments for inflation). Tuition and medical expenses paid by you for another are excluded from this lifetime exemption, as long as the payment is made directly to the provider.  In addition to the estate and gift taxes, gifts or bequests to any individual two generations or more below you (a grandchild or great grandchild), may be subject to a federal generation­ skipping transfer ("GST") tax. 

The federal estate, gift and GST taxes (often referred to as "transfer taxes") are tied together in a unified transfer tax system, which means that the exemption amount is available over the course of your lifetime and, to the extent it is not applied to lifetime gifts, can be used by your estate. Under the 2017 tax act, the federal exemption is $10 million (from January 1, 2018 through December 31, 2025 when the law sunsets), adjusted each year for inflation.  In 2022, the adjusted exemption amount is $12,060,000. 

The Massachusetts estate tax, which is currently based on federal law as it existed on December 31, 2000, is very different from the 2022 federal estate tax. The Massachusetts exemption amount is $1 million, with the result that a Massachusetts tax will often be due even though the estate is exempt from federal tax. This means that Massachusetts residents and those with Massachusetts property will still need to engage in tax planning for the first $1 million owned by a decedent.  

If your estate exceeds the applicable exemption amounts, you may be able to take steps which will reduce or, perhaps, eliminate both the Massachusetts and federal estate taxes. 

For example, couples with combined estates in excess of $1 million may want to consider the use of a trust as a fairly simple way to save estate taxes. A couple with $2 million split evenly between them could avoid all federal and Massachusetts estate taxes on both deaths by having the first one to die leave their share of the combined property in trust for the benefit of the survivor, through the trust, rather than outright to him or her. 

The use of a trust to achieve tax savings for married couples is optional under federal law, because any exemption remaining after the death of the first spouse can be used by the surviving spouse during life or at death for estate and gift (but not GST) tax purposes, as long as an election is made on a timely-filed federal estate tax return. In 2022, this gives married couples a combined exemption of approximately $24 million, adding considerable flexibility to the planning process. 

In addition to the planning available with trusts, any person with charitable intent can obtain tax savings by making gifts to charitable organizations. These may be made directly, or through special charitable trusts which permit the gift to be split between an individual and a charity.