Planning for Life

Be Nice to Your Beneficiaries, or Don't Be Their Trustee

Posted by Harry S. Margolis on January 16, 2018

By Harry S. Margolis

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Dad created an estate plan that distributed three quarters of his estate to three of his children and the fourth quarter in trust for one of his daughters, Elaine, and her two children, Paul and Alicia. He named another daughter, Madeline, and her daughter, Paula, as trustees.

Dad died in 2001. The trust for Elaine and her children originally held $542,042. For the next 15 years, Madeline and Paula distributed nothing to Elaine or her children, until 2016 when a court ordered them to make distributions to Elaine so that she "could pay her medical bills and obtain housing." Madeline and Paula did, however, spend more than $50,000 paying for storage of personal items left to Elaine and paid themselves and their attorney.

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Topics: trusts, trustee

Choosing a Trustee for A Child’s Special Needs Trust

Posted by Karen Mariscal on November 7, 2017

by Karen B. Mariscal

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Topics: trusts, special needs planning, special needs, Special Needs Child, Special Needs Trust, trustee

“I’d be Honored”: Paving the Way  For Your Special Needs Trustee - Preparing a Memorandum of Intent

Posted by Karen B. Mariscal on October 26, 2017

iStock-587221754.jpgWhen our autistic son was 8 years old, he was a holy terror.  That was true when he was younger than 8 and older than 8 (he settled down around the time of puberty, for which I am eternally grateful), but I am focusing on age 8 right now. We had two younger boys as well, then ages 5 and 4.  So when I asked my sister Laura whether she would be the guardian of our children, and take over if something happened to my husband and me, it was with great trepidation.  Laura knew full well what was going on in our house, and how difficult a request I was making.  She responded, without hesitation, “I’d be honored.”  I have tears in my eyes as I write this, as it never fails to get to me, even 17 years later.

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Topics: trusts, special needs planning, Intellectually Disabled, autism, disability, Special Needs Child, Caregivers, Special Needs Trust

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

If Your Trust Isn't Working, Don't Recant, Decant

Posted by Harry S. Margolis on September 19, 2017

By Harry S. Margolis

Two recent cases decided by the Supreme Judicial Court, Morse v. Kraft (466 Mass. 92, 2013) and Ferri v. Powell-Ferri (476 Mass. 651, 2017), have confirmed and arugably expanded the power of trustees to transfer trust assets to new trusts to better carry out the goals of the trust grantors in creating the trusts in the first place. iStock-177700114.jpgThe Ferri case permitted the trustee to transfer funds into a new, more restrictive trust even though the trust beneficiary had the right to withdraw the funds from the original trust, since the trustee had the power to distribute the funds to other beneficiaries.

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Topics: trusts, MassHealth planning, MassHealth

SJC Rejects MassHealth "Availability" Doctrine

Posted by Harry S. Margolis on June 5, 2017

By Harry S. Margolis

In its long-awaited decision in the Daley and Nadeau cases released on May 30th, 2017 ( Daley v. Secretary of the Executive Office of Health and Human Services (Mass., No. SJC-12200, May 30, 2017) and Nadeau v. Director of the Office of Medicaid (Mass., No. SJC-12205, May 30, 2017)), the Supreme Judicial Court rules that MassHealth cannot count assets owned by irrevocable trusts as available to an applicant for MassHealth unless and only to the extent the trustee may distribute principal to the applicant or his or her spouse. MassHealth had argued that the right of the applicant or his or her spouse to use and occupy a residence owned by a trust makes it available and countable. 

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Topics: trusts, MassHealth planning, MassHealth

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

Making Sure the Inheritance for Your Special Needs Child Doesn't Disappear

Posted by Anthony Bushu on February 15, 2017

By Karen Mariscal 

How can you protect the inheritance for your special needs child?  One way is through a supplemental needs trust.  A supplemental needs trust is a special type of trust that both provides management of money for the disabled beneficiary, and maintains the beneficiary’s eligibility for government services. 

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Topics: trusts, asset protection, special needs

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

Congress Passes Special Needs Fairness Act

Posted by Harry S. Margolis on December 9, 2016

By Harry S. Margolis

As part of the 21st Century Cures Act which passed last week, Congress  has finally corrected a glitch in the law dating back to 1993. Back then, Congress authorized the creation of so-called (d)(4)(A) trusts which permit people with disabilities under age 65 to shelter funds and still qualify for Medicaid (MassHealth in Massachusetts) and Supplemental Security Income. A quirk in the law has required these trusts to be created by a parent, grandparent, guardian or court, even if the beneficiary is competent to create the trust herself. This has limited the availability of these trusts and required expensive proceedings in court which have often delayed eligibility for vital public benefits.

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Topics: trusts, special needs planning

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