Planning for Life

2 Reasons Surviving Spouses Should File Federal Estate Tax Returns: Portability and Capital Gains

Posted by Anthony Bushu on March 29, 2017

By Harry S. Margolis

With the threshold for federal estate taxes set at $5.49 million this year (it adjusts each year for inflation), very few estates have to file a federal estate tax return. In contrast, the Massachusetts threshold is $1 million, meaning that many more estates must file a Massachusetts return. For estates that fall between $1 million and $5.49 million, it can still make sense to file a federal return if the decedent left a surviving spouse.

This is for two reasons: portability and capital gains step up.

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Topics: estate taxes, Probate Estate Administration, capital gains taxes

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: Estate Planning, trusts, Probate Estate Administration

The Massachusetts Estate Tax on Out-of-State Real Estate: Conflict, Quandary, and New Court Ruling

Posted by Harry S. Margolis on November 22, 2016

By Harry S. Margolis

If a Massachusetts resident dies owning real estate outside of the state or the country, can Massachusetts tax it in your estate? If you look at Massachusetts law, the answer is "yes." This is because the Massachusetts estate tax is calculated as the federal estate tax credit that was available under the federal estate tax in place back in 2000. Since the federal taxable estate includes all the decedent's property wherever held, the Massachusetts tax does as well.

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Topics: Probate Estate Administration, estate taxes

What is Probate and Should You Avoid It?

Posted by Harry S. Margolis on March 15, 2016

By Harry S. Margolis

Probate is the process through which after death your possessions are passed on to whichever individuals and charities you name in your will. If you don't have a will, your property passes under what are called the rules of "intestacy" which means that state law determines who gets what -- essentially your closest relatives.

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Topics: Estate Planning, will in massachusetts, probate, Probate Estate Administration

Governor Baker Seeks to Expand Estate Recovery

Posted by Harry S. Margolis on February 23, 2016

By Harry S. Margolis

Governor Charles Baker's FY 2017 budget includes a proposal to expand MassHealth estate recovery to include non-probate property. Currently, MassHealth recoups its expenditures from the probate estates of individuals who received coverage of nursing home care or any other MassHealth benefits after age 55.

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Topics: MassHealth planning, MassHealth, Probate Estate Administration

Is an Inherited IRA Protected from Creditors? No!

Posted by Harry S. Margolis on July 15, 2014

In general under the 2005 Bankruptcy Code, IRAs and other retirement accounts, such as 401(k)s and SEP plans, are protected in the event of bankruptcy by the owner -- one more reason to fund your retirement plan with as much as possible. But what about an inherited IRA? The U.S. Supreme Court recently decided in Clark v. Rameker that they do not enjoy any  bankruptcy protection.

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Topics: Retirement Planning, asset protection, Probate Estate Administration

Probate v. Nonprobate Property 101

Posted by Christina T. Vidoli on September 26, 2012

By Christina T. Vidoli

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Topics: Probate Estate Administration, Estate Planning

Will Debt Forgiveness in a Will Work?

Posted by Harry S. Margolis on July 10, 2011

By Harry S. Margolis

A father lends money to his son and daughter-in-law secured by a mortgage, and forgives the debt in his will. When the father dies the son's promissory note is the estate's sole asset and without payment on it the estate cannot afford to pay creditors or the expenses of administration.

These are the basic facts of a Florida case, Lauritsen v. Wallace.  The probate court holds that the debt forgiveness is effective on the moment of death, but on appeal the Appeals Court reverses finding that the son has to pay on the note enough to cover the estate's debts and the costs of administration. 

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Topics: Estate Planning, Probate Estate Administration

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