Planning for Life

7 Reasons to Create a Family Protection Trust, and 4 Not To

Posted by Harry S. Margolis on September 26, 2017

By Harry S. Margolis

The other day I met with a husband and wife and their adult son to discuss the parents' estate plan. We discussed tax planning, avoiding probate and steps to provide for financial management if either or both spouses become incapacitated.iStock-629864928.jpg

Then I told the son that he and his sister have a choice. When they inherit from their parents they can either have everything distributed outright to them or have it remain in trust for their benefit. We call these "family protection trusts." As I explained to the son, family protection trusts provide the following benefits:

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Topics: trusts, Estate Planning

Should My Lawyer Be a Member of NAEPC, AAEPA, ACTEC, NAELA, etc.?

Posted by Harry S. Margolis on September 12, 2017

By Harry S. Margolis

A financial planner recently asked me the following:

Second, because this question comes up from time to time, what organization of estate planning attorneys do you recommend I use as a general resource?  I just googled "estate planning attorney organizations", but I found several:

  • NAEPClogo.png
  • AAEPA
  • ACTEC
  • NNEPA
  • NAELA
  • AATEELA

Which one should I start with?  Assume the clients have assets of $1-$3M - not enough to worry about federal estate taxes, but big enough to be somewhat complicated, and definitely worth updating the will, doing the business and health care POAs, etc.

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Topics: Legal profession, Estate Planning

Florida Governor Vetoes Electronic Will Act

Posted by Harry S. Margolis on July 18, 2017

By Harry S. Margolis

I've often mused about the contrast between the formalities necessary to execute a will, requiring two witnesses and a notary, and the lack of formality to name a beneficiary of an investment or retirement account or a life insurance policy. Often the investment and retirement accounts contain substantially more money than the rest of an individual's estate. And often the beneficiaries can be changed online without any of the protections required for a will.

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Topics: Estate Planning

Appeals Court Confirms Use of POAs in Life Estate Deeds

Posted by Anthony Bushu on May 10, 2017

By Harry S. Margolis

A life estate is a deed that divides ownership by time. The "life tenant" has full rights to the property during his life, but at his death full rights pass to the "remaindermen." Both the life tenant and the remaindermen are owners of the property, but their interests are different.

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Topics: MassHealth planning, long-term care planning, Estate Planning

7 Reasons You Should Consider A QTIP Trust

Posted by Anthony Bushu on April 26, 2017

By Harry S. Margolis

older married couple with lawyer.jpgSo, what's a QTIP trust? "QTIP" stands for qualified terminable interest property. Total legal gobbledygook, right? So forget the words. What it means is a trust that you leave for your spouse that gives his the right to all of the income and limits his right to the principal. Those limits can be total, meaning no right to principal, or minor, meaning simply limited by the HEMS standard (for health, education, maintenance and financial security) or fully available but controlled by a trustee other than your spouse.  

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Topics: trusts, asset protection, Estate Planning, estate taxes

Talk to Your Client, or Face the Consequences

Posted by Anthony Bushu on April 19, 2017

By Harry S. Margolis

An experienced Massachusetts attorney was recently admonished by the Board of Bar Overseers (BBO) for steps he took to protect his client, steps he took without contacting her directly. (Admonition No. 17-06)

The lawyer, who is unnamed in the admonition, but who we'll call Lawyer A, received a call from another attorney who asked Lawyer A to turn over the client's files. The new attorney said that the client, an elderly woman, had now hired him. Lawyer A called the woman's daughter, who was named on her mother's durable power of attorney.

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Topics: Estate Planning, Attorney- Client Relationship

A Different Approach to Estate Planning

Posted by Anthony Bushu on April 12, 2017

By Harry S. Margolis

I had lunch the other day with Vincent Bonazzoli of the Family Estate Planning Law Group in Lynnfield. He has a different approach to estate planning representation that may work better for many attorneys and their clients than more traditional forms of estate planning.

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Topics: Legal profession, Estate Planning

Beware the Mass Estate Tax at the Threshold

Posted by Anthony Bushu on January 25, 2017

By Harry S. Margolis

While the threshold for the federal estate tax is $5.49 million this year, the Massachusetts threshold is $1 million. Fortunately, the Massachusetts rates are much lower than the federal rate, graduated from 0.8% to 16% on estates exceeding $10 million, a flat 40%. (For estates in the $1 million to $2 million range, the marginal rate is 6.4% or 7.2%.) Unfortunately, in Massachusetts if the estate exceeds that threshold, the entire estate gets taxed. The result is a much higher marginal rate.

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Topics: Estate Planning, estate taxes

Is Your Financial Advisor a Fiduciary?

Posted by Anthony Bushu on January 18, 2017

By Harry S. Margolis

When you consult with your financial advisor or planner, does she put your interests first, or is she simply under an obligation to sell products that are "appropriate"? If you don't know, ask.

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Topics: Estate Planning, Retirement Planning, financial planning

Probate Court Upholds Beneficiary Designation: Attorney-in-fact Executed Documents for Her Own Benefit

Posted by Harry S. Margolis on December 23, 2016

When can an attorney-in-fact change an estate plan for her own benefit? When it's what the grantor or the durable power of attorney wants. In Giroux v. Laranjo, et al. (Bristol Probate Court Docket Nos. BR15F0006QC and BR13P2422EA, March 4, 2016), the court upholds the validity of a schedule of trust beneficiaries executed by Patricia A. Giroux as attorney-in-fact for Joseph A. Peixoto even though she stood to gain a considerable amount from its execution.

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Topics: trusts, Estate Planning, Probate Estate Administration

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