Estate Planning and Probate

There is a common misconception that “estates” are exclusive to multimillionaires. An estate is everything people own in their own name or jointly with others. It encompasses assets of every kind, like real estate, cash, stocks, bonds, retirement plans, life insurance, businesses, personal property (furniture, art, antiques, cars, collections, other treasured items, etc.) and any other kind of investment.

The definition of estate planning adopted by the National Network of Estate Planning Attorneys is:

“I want to control my property while I am alive and well, care for myself and my loved ones if I become disabled, and be able to give what I have to whom I want, the way I want, and when I want, and if I can, I want to save every last tax dollar, attorney fee and court cost possible.”

A good estate plan will meet this definition of estate planning.

For centuries, wills were just about all that comprised ” estate planning”. Today, the field of estate planning has grown to be one of the most technically demanding and comprehensive areas of the law.


Estate planning is:

  • Ensuring that your hopes, dreams and concerns for yourself and for your loved ones will be accomplished if you become incapacitated or die.
  • It is protecting you and those you love by keeping you, your family and your sensitive business and personal information out of probate court, where the information becomes a matter of public record, when you become legally incapacitated or die.
  • Estate planning is designing a plan (usually in a trust agreement) which contains some well thought instructions for your family’s continued well-being after your death based on your wishes and desires.
  • It contains provisions to protect your estate from creditors and even protect your beneficiaries from themselves.

A will is a legal document that deals specifically with the distribution of your assets after your death, and is validated only through the probate court process.

Imagine for a moment that all of your assets are boxes – your home is a box, your car is a box, your bank account is a box, and so on. You have this stack of “boxes” that you are carrying in your hands as you walk through life. If you should trip and fall (i.e. die or become disabled), the “boxes” fall all over the place, and you need a lawyer to help you gather them up. If you are alive and disabled, the “boxes” are picked up with a power of attorney, if you have one. If you are dead, they can be picked up with your will, if you have one, if not the state will decide who gets what for you. Either way your loved ones or heirs will have to go to probate court to decipher and direct where the “boxes” go.

You can avoid all that with a trust. When you establish a trust, it is like getting a little red wagon to put your “boxes” (or assets) in. They all fit inside the wagon, nice and snug. You have total control over what goes in the wagon, what comes out of the wagon and how each of these tasks is accomplished. If something should happen to you, the only thing you drop is the handle. The “boxes” (your assets) are all still safely tucked inside the wagon.

Probate is the court-supervised administration of your estate. It generally serves three purposes: to organize all of your assets, to pay your bills and settle any other creditor issues, and to oversee distribution of your estate according to your intentions.

You can avoid all that with a trust. When you establish a trust, it is like getting a little red wagon to put your “boxes” (or assets) in. They all fit inside the wagon, nice and snug. You have total control over what goes in the wagon, what comes out of the wagon and how each of these tasks is accomplished. If something should happen to you, the only thing you drop is the handle. The “boxes” (your assets) are all still safely tucked inside the wagon.

Probate has been defined as “…the lawsuit you bring against yourself with your own money to benefit your creditors.”  Although it isn’t as drastic as this, especially under new MUPC rules, there potentially can be a ring of truth to this process if one isn’t careful in their pre planning.

Other disadvantages include:

  • Loss of privacy: your probate file in the Court is a matter of public record, therefore your heirs can be targeted by con artists and your will that may contain very personal, intimate information goes on display for the world to see.
  • Will contests: wills are much easier to contest than trusts. When a will is contested, the estate is frozen and the assets are tied up, preventing them from being distributed to your loved ones.
  • Costs and delays: Court equals time and money. The total cost of probate can easily range from 3-10% of your gross estate. In addition, there must be a probate proceeding in every state in which you own real property.

Not all plans are created equal. Because our firm is a member of Wealth Counsel, LLC, we use specialized software these organizations have developed for estate planning that draws upon the collective knowledge of the top legal minds in the field. Only Wealth Counsel member firms can offer you the benefits of these trademarked trusts.

Elder Law & Medicaid

Elder law specifically deals with legal issues that predominantly affect seniors and those with disabilities. These issues include qualification for public assistance programs; long-term care planning and healthcare; guardianships and conservatorships; and estate planning and probate in light of varying and unstable circumstances.

Most people believe that Medicaid is only for poor people, but actually Medicaid is for everyone. We have all paid into the program during our working years. The Medicaid regulations are clear that as long as there have been no disqualifying transfers of assets in the five years prior to applying, one is potentially eligible for benefits. There are some defining perameters but most of the time can be easily met with the help of a qualified attorney. Medicaid planning seeks to accomplish the goal of qualifying otherwise eligible people for benefits by working within the rules, prepaying costs and making transfers of assets (i.e. between spouses) that create the shortest possible ineligibility periods for our clients.

Medicaid is a program sponsored by the federal government and administered by states that is intended to provide health care and health-related services to eligible individuals.

Unfortunately, many of us will require long term care of some kind during our lives. The costs of this care whether it is provided to you at home or in some type of institution are astronomical. A 2006 study found that the average daily cost for nursing home, assisted living or home health care in Massachusetts was $273.00, in other words $99,645.00 per year. Genworth Financial 2006 Cost of Care Survey, Nursing Homes, Assisted Living Facilities and Home Care Providers, March 2006. Realistically today, those costs are up by 20% or more.

Asset Protection

When Estate Planner’s refer to “asset protection,” they are primarily referring to the use of trusts, family limited partnerships and other techniques to protect families and their businesses from creditors. Potential creditors can include state and federal taxing authorities, non-family members through divorce, loved ones who need protection from themselves, and judgment creditors through lawsuits.

Living Trusts

When a loved one passes away, his or her estate often goes through a court-managed process called probate or estate administration where the assets of the deceased are managed and distributed.  If your loved-one owned his or her assets through a well-drafted and properly funded Living Trust, it is likely that no court-managed administration is necessary, though the successor trustee needs to administer the distribution of the deceased.  The length of time needed to complete the probate of an estate depends on the size and complexity of the estate and the local rules and schedule of the probate court.

 Every probate estate is unique, but most involve the following steps:

  • Filing of a petition with the proper probate court
  • Notice to heirs under the Will or to statutory heirs (if no Will exists)
  • Petition to appoint a Personal Representative (f/k/a as “Executor”)
  • Inventory and appraisal of estate assets by a Personal Representative
  • Payment of estate debt to rightful creditors
  • Sale of estate assets
  • Payment of estate taxes, if applicable
  • Final distribution of assets to heirs

A Living Trust can be used to hold legal title to your assets and provide a mechanism to manage them. You (and your spouse, if married) are the trustee(s) and beneficiaries of your trust during your lifetime. You also designate successor trustees to carry out your instructions as you have provided in case of death or incapacity. Unlike a Will, a Trust usually becomes effective immediately and survives after incapacity or death. Your Living Trust is “revocable” which allows you to make changes and even to terminate it. One of the great benefits of a properly funded Living Trust is the fact that it will avoid probate and minimize the expenses and delays associated with the settlement of your estate.

Like a Will, a Living Trust is a legal document that provides for the management and distribution of your assets after you pass away. However, a Living Trust has certain advantages when compared to a Will. A Living Trust allows for the immediate transfer of assets after death without court interference. It also allows for the management of your affairs in case of incapacity, without the need for a guardianship or conservatorship process. With a properly funded Living Trust, there is no need to undergo a potentially expensive and time-consuming public probate process. In short, a well-thought out estate plan using a Living Trust can provide your loved ones with the ability to administer your estate privately, with more flexibility and in an efficient and low-cost manner.

Creating a revocable Living Trust and transferring your assets to the name of that trust will not affect your ability to control such assets. During your lifetime when you are mentally competent, you have complete control over all your assets. You may engage in any transaction as the trustee of your Trust that you could before you had a Living Trust. There are no changes in your income taxes. If you filed a 1040 before you had a trust, you continue to file a 1040 when you have a Living Trust. There are no new Tax Identification Numbers to obtain. Because a Living Trust is revocable, it can be modified at any time or it can be completely revoked if you so desire. Upon your incapacity, your durable power of attorney comes into effect and allows your loved ones to transact on your behalf according to the instructions you have laid out in the Living Trust. Upon your passing, the Living Trust can no longer be modified and the successor trustee(s) you have designated will then proceed implement your wishes as directed such as transfer of your assets to your beneficiaries.

Assets with beneficiary designations such as a life insurance policy or annuity payable directly to a named beneficiary need not be transferred to your Living Trust. Furthermore, money from IRAs, Keoghs, 401(k) accounts and most other retirement accounts transfer automatically, outside probate, to the persons named as beneficiaries. Bank accounts that are set up as payable-on-death account (POD for short) or an “in trust for” account (a “Totten Trust”) with a named beneficiary also pass to that beneficiary without having to be titled into your trust. However, when you do your estate planning, it is important to seek the counsel of an experienced attorney who is familiar with the intricate regulations of retirement accounts and can coordinate the appropriate beneficiary designations with your overall estate plan.

Federal law prohibits financial institutions from calling or accelerating your loan when you transfer property to your Living Trust as long as you continue to live in that home. The only exception to the federal law, enacted as part of the 1982 Garn-St. Germain Act is that it does not provide protection for residential real estate with more than five dwelling units. However, we find that most clients who do own residential property with more than five dwelling units tend to own them through a business entity and not directly in their individual names and hence are not concerned with the five dwelling exception.

Planning for Incapacity

A durable power of attorney allows you to carry on your financial affairs in the event that you become disabled. Unless you have a properly drafted power of attorney, it may be necessary to apply to a court to have a guardian or conservator appointed to make decisions for you when you are disabled. This guardianship process is time-consuming, expensive, often costing thousands of dollars and emotionally draining.

There are generally two types of durable powers of attorney: a “present” durable power of attorney in which the power is immediately transferred to your attorney in fact; and a “springing” or future durable power of attorney that only comes into effect upon your subsequent disability as determined by your doctor. When you appoint another individual to make financial decisions on your behalf, that individual is called an “attorney in fact”. Anyone can be designated, most commonly your spouse or domestic partner, a trusted family member, or friend. Appointing a power of attorney assures that your wishes are carried out exactly as you want them, allows you to decide who will make decisions for you, and is effective immediately upon subsequent disability.

Generally, any individual over the age of majority and who is legally competent can establish a power of attorney.

In general, an agent (or “attorney in fact”) may be anyone who is legally competent and over the age of majority. Most individuals select a close family member such as a spouse, sibling or adult child, but any person such as a friend or a professional with outstanding reputation for honesty would be ideal. You may appoint multiple agents to serve either simultaneously or separately. Appointing more than one agent to serve simultaneously can be problematic because if any one of the agents are unavailable to sign, action may be delayed. Confusion and disagreement between simultaneous agents can be another cause of inaction. Therefore, it is usually more prudent to appoint one individual as the primary agent and nominate additional individuals to serve as alternate agents if your first choice is unwilling or unable to serve.

The law allows you to appoint someone you trust – for example, a family member or close friend to decide about medical treatment options if you lose the ability to decide for yourself. You can do this by using a Health Care Proxy or “Durable Power of Attorney for Health Care” where you designate the person or persons to make such decisions on your behalf. You can allow your health care agent to decide about all health care or only about certain treatments. You may also give your agent instructions that he or she has to follow. Your agent can then make sure that health care professionals follow your wishes and can decide how your wishes apply as your medical condition changes. Hospitals, doctors and other health care providers must follow your agent’s decisions as if they were your own.

A Living Will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment. Almost all states have instituted living will laws to protect a patient’s right to refuse medical treatment (Massachusetts have not). Even if you receive medical care in a state without living will laws this document is useful to those trying to decide what an unconscious patient would want. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.

Some medical providers have refused to release information, even to spouses and adult children authorized by durable medical powers of attorney, on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases. In addition to the above documents, you should also sign a HIPAA Authorization Form that allows the release of medical information to your Agents, your Successor Trustees, your family and other people whom you designate.

Our passion is problem solving for you and yours.
Invested in our Clients. Invested in Solutions

Contact Us for a
Complimentary Initial Consultation

Contact our Cape Cod Estate Planning Attorneys and Elder Law Attorneys for a complimentary initial consultation in Centerville, MA, and to let us know how we can best serve you and your families now and in the long-term future.

    Contact Us for a
    Complimentary Initial Consultation

    Contact our Cape Cod Estate Planning Attorneys and Elder Law Attorneys for a complimentary initial consultation in Centerville, MA, and to let us know how we can best serve you and your families now and in the long-term future.

      Our passion is problem solving for you and yours. Invested in our Clients. Invested in Solutions