Planning for Life

By Harry S. Margolis

We recently had an inquiry about the following situation. The decedent's will said:

"Herman shall receive all contents of the house."

It also said the rest of the property would go to beneficiaries other than Herman. The house contained $4,700 in cash, a bank check of $3,000, and an uncashed personal check made out to the decedent.

So, who gets these items, Herman or the people who are entitled to the rest of the estate?

By Harry S. Margolis

In my article, How Can Tangibles Be Fairly Divided, which discusses various ways of dividing up tangible personal property in estates, I describe how one family with a lot of stuff devised a fair but complex system for distributing estate assets. The only problem with it was that it was a lot of work for one of the executors, who had to catalogue all the items, obtain appraisals for the more valuable ones, go online to get value estimates for those of less monetary worth, and circulate spreadsheets with all this information.

Fortunately for future executors, there's an online program, fairsplit.com, that facilitates this process. It has a great motto: "Divide things, not families." The company founder, David MacMahan, a serial entrepreneur, explained to me that he was inspired to create FairSplit because of his own experience dividing assets, both in an estate and following his own divorce. He felt there had to be a better way, and spent considerable time researching and developing his program before making it available to the public.

By Harry S. Margolis

An article I recently wrote for Next Avenue, the public television website for Baby Boomers, explains how the family of a college friend divided 100s of items from their parents' estates among the four siblings. The article, "A Clever Way to Divvy Up Items After a Parent's Death," describes the multi-step process the family used to maximize the value each child, as well as their own children, would receive from the estate items.

Unlike savings and investments, what estate planners call "intangible personal property," items such as furniture, artwork, books, silverware, dishes, cars and clothes, ("tangible personal property") cannot be broken up and evenly divided. So, what's the best way to decide who gets what? Should it be based on monetary value, sentimental value, utility to the recipient, or any other standard? What happens when a single item or several have significantly more monetary value than everything else?

By Harry S. Margolis

When anyone dies, they’re likely to leave tangible personal property, which is what lawyers call anything you can touch, such as furniture, dishes, silverware, artwork, and photo albums. The problem with distributing this property is that you cannot do so exactly equally. In addition, many items may have little or no monetary value but significant sentimental value. So how can you be fair? Here are four methods you might use, or in some instances, you might use a combination.

1. Sell. When the estate includes a few items of significant financial worth that can't be equally distributed among heirs, the property might be sold and the proceeds distributed equally as cash. This is what the family of a friend did. His parents had rescued one valuable painting when fleeing Europe before the Holocaust. which he and his sister sold at auction at Sotheby's.

By Harry S. Margolis

If you've been named as executor or personal representative in someone's will, whether the person has recently died or you know you may need to fill this role in the future, you no doubt wonder what the job will entail. While you will likely hire an attorney to help with the process, it's difficult to get a complete picture of all the steps and details.

12 Step Process

The website, Executor.org, now provides a comprehensive view and a system of keeping track of where you stand in the process. It works in large part as a series of 12 checklists with explanations of each item on the lists. Its 12 steps are as follows:

By Harry S. Margolis

Don't all the conveniences of life sometimes seem just to make life more complicated? This is nowhere more true than with respect to the internet. Whether or not we spend half our lives responding to devices, we all transact a lot of our daily business online, buying stuff on Amazon, paying our bills through online bank programs, stocking up and using airline miles, reallocating our investments, saving photos, watching movies, or planning trips. And that's not even mentioning social media, such as Facebook, Instagram or LinkedIn, or dating sites.

So, what happens to all your connections and information if you become disabled or die? Who has access? Who do you want to have access, and to which sites? For instance, you may want your children to be able to access your financial accounts, but not your dating site.

By Harry S. Margolis

The Massachusetts Probate Courts have created useful forms for use in its proceedings, but sometimes the forms don't fit exactly the facts or situation petitioners want to present to the court. In the case of Leighton v. Hallstrom (Mass. App. Ct. No. 17-P-1335, Nov. 7, 2018), Robert H. Olson of Bridgewater died in 2015 without a will. His first cousin, Dorothy A. Leighton, filed a petition for probate listing herself and two other cousins as next of kin.

Bengt Hallstrom, of Uddevalla Sweden, filed a notice of appearance on which he checked the box saying that he was not objecting to the proceeding. His counsel also sent a letter to Leighton's counsel containing a genealogical chart showing that he was a cousin of Olson on his mother's side. The letter stated "I have not listed it as an objection since it is my understanding by doing so will cause a contest in this matter." In other words, Hallstrom was not objecting to the proceeding, just to the listing of next of kin. A guardian ad litem who was appointed by the court issued a report stating, "The issue of determining heirs can be addressed during the course of the handling of the estate."

By Harry S. Margolis

With the threshold for federal estate taxes set at $11.58 million as of 2020 (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 $11.58 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.

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.

By Harry S. Margolis

If a Massachusetts resident dies owning real estate outside of the state or the country, can Massachusetts tax their 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.