Planning for Life

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

Margolis & Mariscal Chapter Published

Posted by Elizabeth Stepakoff on November 15, 2016

Margolis & Bloom, LLP, is pleased to report that Harry Margolis and Karen Mariscal co-authored a chapter in the book, Drafting Irrevocable Trusts in Massachusetts,  revised in September 2016 and published by the Massachusetts Center for Legal Education.  Drafting Irrevocable Trusts in Massachusetts includes sections from nearly two dozen experts from the Commonwealth's estate planning community, and addresses the essential issues in drafting irrevocable trusts. Harry and Karen’s chapter concerns supplemental needs trusts.  The book can be purchased online at the MCLE website: http://www.mcle.org/product/catalog/code/2050211EBK, and is also available on Amazon.   Read More

Topics: trusts

Is Your Trust Subject to Massachusetts Income Tax?

Posted by Harry S. Margolis on November 8, 2016

By Harry S. Margolis

Is your trust subject to Massachusetts income taxes? Probably it is. But probably it also pays no income tax so it doesn't matter. I'll explain the reasons why below.

In contrast, the 35 trusts in question in the case of Bank of America, N.A., vs. Commissioner of Revenue (SJC-11995, July 11, 2016), do have to pay income taxes. The Bank of America argued that when it acts as trustee its trusts should not be subject to Massachusetts income tax because (1) as a corporation it's not a "natural person" and (2) it doesn't have sufficient nexus with Massachusetts to be considered an "inhabitant" of the state for this purpose. The Massachusetts Supreme Judicial Court in this decision disagrees, upholding the decision of the Appellate Tax Board to tax the income of these trusts.

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Topics: trusts, income 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 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

Massachusetts SJC Overturns Pfannenstiehl, Affirming Use of Asset Protection Trusts

Posted by Harry S. Margolis on August 9, 2016

By Harry S. Margolis

On August 8th in the case of Pfannenstiehl v. Pfannenstiehl the Massachusetts Supreme Judicial Court unanimously overturned a lower court decision that had ordered that assets in an irrevocable discretionary trust created by the husband's father be split in a divorce. The SJC in this decision upholds the use of trusts to shelter assets for future generations.

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Topics: trusts, asset protection

So You've Been Appointed Trustee, Now What?

Posted by Harry S. Margolis on August 3, 2016

By Harry S. Margolis

Congratulations.  You have been appointed trustee of a trust.  That is a strong vote of confidence in your judgment and probity.  Unfortunately, it is also a major responsibility.  Following is a short description of your duties.

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Topics: trusts, supplemental needs trusts

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