Planning for Life

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

Is Anyone Entitled to an Inheritance?

Posted by Harry S. Margolis on November 30, 2016

By Harry S. Margolis

David Karofsky of the Transition Consulting Group, who advises family businesses on succession planning, recently wrote about cases of entitlement he has run across in his business and elsewhere. They include:

The woman who was overheard talking on her cellphone about her father who had more than enough money with his three houses. She and her siblings, she said, had to take control of his finances so that he did not "waste" them before they got passed down to her generation.

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Topics: Estate Planning, estate taxes

Explaining the Inexplicable: The Massachusetts Estate Tax and Gifting

Posted by Harry S. Margolis on November 17, 2016

By Harry S. Margolis

As you may know, the threshold for taxing estates in Massachusetts is $1 million, much less than the current $5.45 million threshold for federal estate taxes. In addition, unlike the federal estate tax which only taxes the excess over the threshold, if an estate exceeds $1 million the entire amount above $40,000 is taxed. Fortunately, the rate is substantially less, ranging from 0.8% to 16%, whereas the federal rate is 40%.

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Topics: Estate Planning, estate taxes

Avoiding Massachusetts Taxes: So You Want  to Move to Florida?

Posted by Elizabeth Stepakoff on November 1, 2016

By Harry S. Margolis

If you've thought of establishing residence in Florida or another low-tax state to save on income and estate taxes, a recent New York state case sheds light on what steps you need to take. In the case of the Matter of Campaniello, the taxpayer, Thomas Campaniello had extremely high income, over $10 million in 2007, the year in question, including profits on the sale of real estate. This no doubt motivated him to seek to avoid New York state and city income taxes and motivated the New York tax authorities to go after him.

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Topics: Estate Planning, estate taxes

Case Illustrates, but Rejects, Doctrine of Merger in Trust Law

Posted by Harry S. Margolis on October 25, 2016

By Harry S. Margolis

In the case of Mond v. Pitts (Mass. App. Ct. 15-P-686, Aug. 19, 2016), the Massachusetts Appeals Court corrected an erroneous decision involving two trusts created by Lorenzo Pitts, Sr., who passed away in 2009. Lorenzo Sr. created the Esperanza Trust and the Fort Hill Trust, both of which held real estate in Roxbury. While the trusts had a second trustee and at one point the second trustee also owned 1% of one of the trusts, during his life, Lorenzo Sr. became the sole  trustee and sole lifetime beneficiary of both trusts. The trusts provided that at his death, "the beneficiaries shall be Lorenzo Pitts, Jr. and Robert Pitts, in equal shares." The trusts further directed that the trusts would terminate and that the property be sold and distributed "among the beneficiaries if living."

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Topics: trusts, Estate Planning

What's a Trust and Why are There So Many Different Kinds?

Posted by Harry S. Margolis on October 18, 2016

By Harry S. Margolis

A trust is a legal entity that permits one or more people -- the "trustee" or "trustees" -- to manage property for the benefit of other people -- the "beneficiaries." The third actor in a trust is the person who creates it -- the "grantor" or "donor." To confuse things a bit further the same person can be a grantor, trustee and beneficiary, but he can't be the only one in all three roles. And the property in the trust can be just about anything you can own -- real estate, bank accounts, investments, or artwork.

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Topics: special needs planning, Estate Planning

5 Essential Estate Planning Documents and Why They Matter To You

Posted by Harry S. Margolis on September 26, 2016

According to LexisNexis, 60% of Americas think everyone should have an estate plan, but only 44% actually have any estate planning instrument in place, such as a will, trust or durable power of attorney. My guess is that at least half of the 44% with estate plans, has outdated documents that they may have put in place when their children were born and now 20, 30 or 40 years later their family and financial situations have changed entirely.

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Topics: Estate Planning

What does it mean to be an agent under a durable power of attorney in Massachusetts?

Posted by Harry S. Margolis on September 14, 2016

By Harry S. Margolis

Have you been asked to serve as an agent (or "attorney-in-fact" to use the technical term) under a durable power of attorney in Massachusetts, but you're not totally sure about your duties and responsibilities? Then you're not alone.  Here's a primer.

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Topics: trusts, guardianship, Estate Planning, durable power of attorney

Funding Your Revocable Living Trust: Re-Titling Assets and Re-Naming Beneficiaries

Posted by Karen B. Mariscal on September 12, 2016

We see it all the time – people pay good money to set up a trust in order to avoid probate and minimize estate taxes, and then they fail to fund the trust. Without any assets in it, the trust will fulfill only some of its potential benefit.

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Topics: trusts, Estate Planning

How one couple prioritized conflicting estate planning goals

Posted by Harry S. Margolis on September 8, 2016

By Harry S. Margolis

My new clients were an older couple, the wife healthy and the husband, unfortunately, suffering from a progressive neurological disease which confined him to a wheelchair. He needed physical help at the start and end of each day and the level of help, and its cost, was likely to grow as his disease progressed. The couple had their main home in Massachusetts, plus a vacation home in New Hampshire. They had sufficient income and savings to cover their current living expenses, but they could be depleted if the husband needed extensive care over a long period of time. Much of their savings was in tax-deferred retirement accounts.

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Topics: long-term care planning, Estate Planning

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