The Importance of Estate Planning

Estate planning is an essential part of your preparation for tomorrow — and it is not just for the wealthy. Estate planning can serve many different purposes for different families: to minimize estate taxes; to avoid the delay of the one year or longer probate process; to name guardians for minor children; and to ensure that your assets are distributed as you intend, rather than as dictated by an anonymous judge in the probate court.

Planning for the future is not an easy task, but it does make things easier for those you leave behind. If you are the parent of minor children you should think about who will care for them if something should happen to you before they become adults. No one wants to think of someone else taking care of their children, but it is a necessary part of planning.

If you have children, you also need to consider an estate plan that addresses how your money will be distributed to your children — should they receive everything at age 18? If you don't make decisions about these issues, then the probate court may make these decisions for you. Although the probate court will try to make the decision with the best interest of the child in mind, they may not choose the person you would endorse as the guardian or trustee for their funds.

We work with clients on both basic and complex estate plans, from basic wills to all types of trusts. We explain things in a way that the layperson can easily understand, and make our clients feel comfortable with the process and the ultimate documents.

Wills, Powers of Attorney and Health Care Proxies
Are the Backbone of an Estate Plan

The basic estate plan should consist of:

  • A Will - to provide for what happens at your death, as well as for naming an Executor (responsible for collecting the assets, paying the debts, and ultimately distributing the assets as per the Will), and a Guardian (to care for minor children);
  • A Power of Attorney – naming someone (and an alternate if you wish) to make your general/financial type decisions for you during your lifetime if you are unable to; and
  • A Health Care Proxy – naming someone (and an alternate if you wish) to make your medical decisions for you if you are unable to make them. In the Health Care Proxy, depending on your personal preference, you can also include "living will" provisions, which would state the circumstances under which you would or would not want artificial life support.

If you become incapacitated or disabled and do not have these documents in place, your family would have to go through the probate court to have someone officially appointed your guardian before anyone could make decisions on your behalf.

Additional Documents to Consider

The Will, Power of Attorney and Health Care Proxy are the essential basic three documents that everyone should have.

In addition, depending on your particular situation, you might consider setting up a single Revocable Trust (also called a "Living Trust") to: (a) provide for specified ages of distribution to children or other beneficiaries (a Trustee would be able to give them money before those ages), and/or; (b) to avoid the 1+ year probate process at your death, keeping your asset information out of the public records of the local probate court.

A married couple with a taxable estate might also consider setting up two Revocable Trusts to reduce the federal and/or MA estate tax that might be due at the second spouse's death (in addition to the benefits of the single Trust, mentioned above).  You may have heard that under the new federal tax law, the federal estate tax is now only for estates over $5 million, but MA still has its own estate tax for estates over $1 million (which includes all assets, even the value of life insurance).

Some might also consider setting up an Irrevocable Trust for life insurance, in order to exclude the full value of life insurance from federal and/or MA estate taxes.

Probate and Estate Administration

Harsip & Stuart also helps clients with the probate process (or estate administration if no probate is required) after the death of a loved one. We work with the family to help the personal representative (known as the executor or administrator) to file the appropriate papers to proceed with the probate process. If the estate is taxable, we can help prepare any required federal or state estate tax returns. Or, we can refer you to a qualified certified public accountant to work with you on the estate tax returns.

Schedule a Consultation to Learn More About Harsip & Stuart

Our goal is to ensure all the "i's" are dotted and "t's" crossed. We want estate planning to be a positive experience for you. We will do our best to educate you about your choices so that you feel completely comfortable with your decisions. Whatever your specific needs are in this area, we have the experience to properly advise you on the best course of action. Contact us now to make an appointment to meet with one of our attorneys to learn what will work for you.

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