Category Archives: estate plan

18-Year-Olds Need Estate Plans, Too

Every adult needs at least a few basic legal documents to provide for her own medical and financial affairs.

Once a person turns 18 years old he becomes a legal adult. This matters from an estate planning perspective because:

  • Parents or legal guardians lose their right of access to information about that young adult.
  • The young adult loses the automatic right of the parents or legal guardians to advocate on his behalf.
  • If the young adult needs assistance with medical care or financial advocacy, such as in the event of an emergency, the parent or legal guardian will be unable to do so without legal authorization.

That’s why every young adult needs at least a very basic estate plan. With proper legal authorization, parents and legal guardians can continue to support and advocate for their children and gain access to their medical, financial, and digital information.

A basic estate plan preserves good relationships between different family members who may not agree with one another about the young adult’s stated wishes.

Every young adult should have at least some basic legal documents that provide the adults of her choosing the authority to:

  • Manage her financial affairs such as paying bills, requesting statement copies, and renegotiating contract or lease terms when she just wants helps and in case of an emergency;
  • Access her online banking and other electronic, financial accounts;
  • Access her protected health information;
  • Consent to or refuse medical treatments and procedures if she cannot do so herself;
  • Serve as her spokesperson regarding her end of life wishes;
  • Consent to donating her organs;
  • Arrange for her cremation or burial;
  • Organize the details of her memorial service according to her preferences;
  • Post notices to and/or memorialize, download copies of, or close out her social media accounts;
  • Specify who should receive certain sentimental pieces of personal property, like jewelry, collections or mementos.

 

Should We Have Joint or Individual Revocable Living Trusts as a Married Couple?

Should We Have Joint or Individual Revocable Living Trusts
as a Married Couple Estate Planning Together?

I’ve been getting this question a lot lately: Why shouldn’t we, as a married couple who have had all joint accounts and joint ownership, just have one joint revocable living trust instead of separate or individual revocable living trusts?

Joint revocable living trusts can and do make sense for some married couples some of the time, just like Wills rather than trusts sometimes make more sense in a given situation. It is always important to review all of your personal family and financial circumstances with your estate planning lawyer to be sure that you have a complete and accurate understanding of how and why one approach may be better suited to you than another.

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To broadly generalize, however, here are 8 reasons I would recommend individual living trusts rather than a joint trust for a married couple planning together:

1. If you and your spouse are likely to have over $2M combined total assets in your estate (including the value of any life insurance policies that would have paid out upon your deaths and the value of all retirement accounts), this is a way to minimize the impact of the Massachusetts estate tax (which has a $1M threshold for filing and an upper tax rate of 16% on the adjusted total assets in your estate).

2. If you and your spouse are likely to leave a combined total of over $10.86M, as the federal estate tax currently stands, then this is a way to minimize the effect of the federal estate tax as part of your overall estate plan. Note that the federal estate tax has been in existence for about a century in one way or another, but this is the highest exemption amount we’ve ever had and being the political hot button topic that it is, there is no guarantee that the present exemption or tax rates will stay where they are. In fact, if the last 15 years have demonstrated anything (going from a $1M exemption and 55% tax rate in 2001 to the present levels), it’s that the federal estate tax is highly likely to shift around, sometimes rather dramatically! Without a crystal ball the best we can do is to draft very flexible plans and keep a lookout for all the possible chances that may occur.

3. It is easier for your surviving spouse and/or trustee to determine, in consultation with your estate planning attorney, your CPA, and your financial advisor working together as a team, which assets to fund into which irrevocable subtrusts to take into account the laws as they exist at that time of your death. If the assets were held in a joint trust, your surviving spouse and/or trustee would not be able to move assets held jointly into the credit shelter or family trust or it could invalidate the tax exemption status of that entire subtrust.

4. When you die, you’re not around to change the terms of your trust anymore, so at that point, your trust becomes irrevocable at least in part. The portions of your trust that would benefit your surviving spouse and your children, if applicable, become irrevocable. If you have a separate revocable living trust, you can still amend your own trust even after the death of your spouse. This provides a surviving spouse with more flexibility and autonomy than a joint trust would.

5. If yours is a second or subsequent marriage and/or blended family, you and your spouse may not have the same plan for distribution and the flexibility you have to make somewhat different plans can avoid some potential family drama.

6. To minimize estate taxes, you will have to divide assets at some point. I believe that it is probably a lot easier to cherry-pick and split up assets now, while you are in full possession of your faculties and not in the process of grieving the loss of your spouse, than it would be in the relatively immediate aftermath of his or her death and without his or her assistance with the process.

7. If you or your spouse came into the marriage with substantially unequal assets, separate trusts can also be a way to maintain the character of those separate assets and ensure that they end up where you ultimately intend.

8. There are also some questions, and potential traps, regarding the character of assets contributed to a joint trust as opposed to separate trusts. For examples, depending on the language and provisions of the trust itself, it may not be explicitly clear what portion of the assets in a joint trust should be attributed to the deceased spouse vs. which portion of those assets would be considered part of the surviving spouse’s estate, and contributions to a joint trust may be counted as a taxable gift to your children or other secondary beneficiaries.

After a full examination of your current family and financial circumstances and a personal discussion with you about your goals and priorities in terms of your estate plan, your attorney will be able to help you make the best informed choices about which type of plan best suits you and your family.

“it’s not about what you have, it’s about how much you care"

October 20-26, 2014 is 
National Estate Planning Awareness Week

Attorney Danielle G. Van Ess of the family-friendly, Hingham, Massachusetts law firm DGVE law, LLC wants to help you “protect your family, yourself, and your stuff.” She explains, “it’s not about what you have, it’s about how much you care. You care about who makes your medical decisions for you. You care who takes care of your children. You care about preserving whatever you have to use throughout your lifetime. You care about what you leave behind to whom, how, and when.”


If your children are minors you worry about who would raise them into adulthood. If your child just became a legal adult, you worry that, without his or her own basic estate plan in place, you lack access to financial and medical information to help him or her. If you have a child with special needs you worry about who would know everything you do about your child and how to ensure your child’s needs are always well met. If you have an adult child with a history of less than stellar financial management skills, addiction, gambling, or who may be divorcing, you worry about lost assets.

 More people are sued than ever today. We know most doctors will be sued sometime in their careers, but increasingly so will financial, accounting, real estate, and IT professionals. Car accidents, slip-and-falls, and accidents involving other people’s children are all real threats. The time to protect your assets from possible lawsuits is before you think you might be sued, before it is too late, and the way you try to protect your assets determines your likelihood of prevailing. Some DIY efforts, such as titling assets in your spouse’s name or establishing a family LLC or LLP without ensuring it owns the assets nor maintaining required formalities just provide false confidence and will likely fail to provide asset protection.


You may worry about how to pass significant resources to your loved ones without causing unintended consequences such as disrupting family harmony. Your estate planning attorney can help you design a plan so each family member can enjoy your cherished vacation home without disagreements far into the future. If you have always been charitably inclined, you can plan to support charities dear to your heart while also ensuring your loved ones are well provisioned. If you have a trusted financial advisor and CPA, your lawyer can and should work together with them as a team on your behalf to help you make your dreams for the future come true. Or you may worry about having sufficient resources to support yourself through retirement, possible long term medical expenses, remaining in your home as long as possible, and preserving your hard-earned resources for your loved ones. While you may not feel like you have enough to worry about estate taxes, you just might and perhaps ironically the less you have the more important it may be to preserve it to protect those you love.

Despite all these important reasons to meet with an experienced estate planning lawyer to learn how the law views your family or financial circumstances, whether your current plan is likely to achieve your goals, and what your options really are, most Americans mistakenly believe they do not need even a simple Will. Far too many Americans have stale, old estate plans that no longer reflect their current personal circumstances, especially given recent sweeping changes in the law.

In 2008 Congress passed a resolutionproclaiming the third week of every October as National Estate Planning Awareness Week noting, “Many Americans are unaware that a lack of estate planning and financial illiteracy may cause their assets to be disposed of to unintended parties by default through the complex process of probate.” With a comprehensive estate plan and financial roadmap for success, Van Ess says, “you can control your own assets during your lifetime, designate the people you want to care for you and provide for your loved ones if you’re ever incapacitated, and make sure that after your death you leave what you want to whomever you want how and when you want, all while ensuring there are more assets left rather than wasted on unnecessary expenses.”


Because there is so much more to an estate plan than just filling in forms, you need to find a qualified lawyer to assist you. Van Ess is passionate about educating and empowering her clients. Says Van Ess, “Just as we as patients seek the right bedside manner in our doctors, we need to find the right deskside manner in our lawyers. Once we find that lawyer we can say with confidence ‘I want to talk with my lawyer’ and it takes away so much unnecessary worry, replacing it with true peace of mind and comfort of heart.”


About Attorney Danielle G. Van Ess and DGVE law®
Raised on the North Shore in Swampscott, Massachusetts, Van Ess graduated with honors from the George Washington University in Washington, DC then met her husband, Chad Van Ess, Senior Counsel for the Acushnet Company, comprised of the Titleist and Footjoy golf brands, in 1998 as classmates at Boston University School of Law. Danielle “got her passport stamped” and moved with Chad to Hingham on the South Shore in 2006 where they laid down firm roots and are raising their four daughters, ages 1 through 9. Danielle established her law firm, DGVE law, LLC in their family home on East Street on September 1, 2008. For over six years now DGVE law® has been proudly “helping people add to, protect, and move their families”® by providing high quality professional legal services in the areas of adoption, estate planning, and residential real estate. For the right, truly passionate entrepreneurs, DGVE law® is also “helping you build, grow, and nurture your business.”
       
For more information, please visit: www.dgvelaw.com, like us on Facebook, or call: 781-740-0848.

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The Grateful Dead and Random Acts of Kindness

When I was 12, my babysitter gave me the cassette tape “American Beauty” by The Grateful Dead. The rest is a long, strange trip. I saw my first show at Boston Garden and about 30 shows after that all around New England and the Mid-Atlantic before Jerry Garcia died. (Sadly, I seem to have lost my album full of ticket stubs in one of the moves over the years.)

Yes, for those who do not yet know me well, I am a serious Deadhead. There is no other music that has the capacity to cheer and bring me back to center like that of the Dead. It’s definitely on the labor and delivery playlist, and I love when my almost 3 and almost 5-year-olds request “Ripple” as a bedtime song. (They ask my husband to sing them “Home Sweet Home” by Motley Crue – as you can see, we have divergent musical sensibilities, though I like that hair ballad myself!)

Anyway, as I recall, the story of the Grateful Dead goes something like this: a traveller came upon the corpse of a debtor and took it upon himself to arrange a proper burial before going on his way. Later, the soul of that corpse joined the traveller and repaid the stranger’s act of kindness before revealing himself to be that grateful dead person. Today I was the recipient of some random acts of kindness for which I am feeling extremely grateful.

You see, I was goin’ down the road feeling bad today, hot, tired, and afraid of 33 more hugely pregnant days like this, wishing it still felt like the coldest summer on record. So I took a break for lunch, listened to Sirius Channel 32, and felt revived. When I came back to my office I was gifted two wonderful acts of kindness.

First, I received an email message from a client to inform me that she had just posted a great review for me. She had also passed along my contact information to a couple friends of hers who, after listening to her express relief in having done so for her family, expressed interest in pursuing estate plans for their young families and naming guardians for their minor children. Next, I received a phone call from another client who was so kind and genuine in his wishes for my comfort, health, and well-being and that of my belly baby, asking me to please take good care of myself even if it meant taking longer to get back to him with his matter. The combined effect of these acts of kindness was to completely turn my day around.

Yes, it’s still *hot* and humid and uncomfortable, but now I feel happy. I am so grateful to have such wonderful clients with whom I am able to connect on such a deeply personal level. I love my work and am so glad I took the risks and have made the sacrafices in going solo to make it possible to find this level of gratification while still being able to do good for others. As inspiration moves me brightly, I will now use this renewed energy to get myself back to work and beat it on down the line.

If You Voted The Couple Would Choose Lawyer C…

First, the couple has a very brief telephone call with Lawyer A asking for and being told they can have just want they want for a flat fee of about $800. Next they have an initial consultation with Lawyer B, who waives the initial fee. After an hour, in which the couple begins to feel very overwhelmed by a seemingly unnecessary for them complex process, Lawyer B says he anticipates their estate plan will cost somewhere around $5,000. But because it he bills by the hour and he can’t predict everything, it could run higher. Additionally, they would be responsible for several other itemized expenses that could prove necessary in the course of the representation. This plan would include far more than the simple Wills, Powers of Attorney, and Living Wills Lawyer A offered, but the couple leaves unclear as to why they are talking about trusts and feeling like they are being offered more than they need.

The couple then schedules a meeting with Lawyer C, receiving a welcoming packet of information and initial questionnaire in advance. Lawyer C explains she needs this information to properly evaluate and make recommendations about what type of estate plan might suit them best. Through the process of completing this questionnaire, which helps them organize their estate planning information and sharpen their focus on their wishes, the couple begins to feel better prepared and less “in the dark.”

With Lawyer C, the couple immediately feels comfortable, as though they are talking with a peer, rather than being talked down to by a superior. Lawyer C explains a little about her practice, the estate planning process generally, and asks some probing questions of them. She then suggests what she thinks would best protect the couple’s family and assets according to the wishes and goals they expressed. Understanding it is their choice to make, the couple then reviews Lawyer C’s printed fee schedule, comparing apples to oranges as it were. They choose a $4,000 flat fee package they feel provides them the best value, happy there will be no surprise fees, and agreeing to handle some of the administrative work themselves. Although this is far more than they originally planned to spend, they agree it is important enough to do now while they could and not wait for tragedy to strike, particularly in light of recent events. So they sign up for an automatic monthly payment via credit card, and leave already feeling relieved.

A few weeks later, after several very conveniently timed telephone conferences and thorough, patient reviews of and revisions to drafts, the couple’s estate plan is ready for signing. Lawyer C comes to their home one Saturday afternoon and they sit around the kitchen table, while the couple’s young children play around them. Lawyer C makes sure they understand and feel good about every document they sign, and thanks the neighbors who kindly stopped by to serve as witnesses. Lawyer C then reminds the couple to whom they should provide copies of each document, where they should store them, and offers some additional resources for information sharing. She reminds them to revisit their plan and promises to follow up with them as well, but says they shouldn’t be strangers in the meantime.

That night, the couple goes out for “date night” dinner and drinks with friends, leaving their young children happy at home with their favorite babysitter. On the way home, a drunk driver strikes the couple’s car directly. Stay tuned for what happens next . . .

What is Estate Planning & Do I Need a Will Now?

The phrase “estate planning” can be off-putting as many think it sounds like it pertains only to the very wealthy, when in fact it simply refers to how you would wish matters to be handled in the event of your incapacity.

Who would you want to make medical decisions for you if you were unable? In what ways would you wish to be kept alive and for how long? How would you wish for your funeral and burial or cremation to be handled, paid for, and by whom? In what manner do you wish to pass on both your financial and priceless personal assets to your children or other relatives? Whom you would want to care for any minor children you may have in the unlikely event both you and your spouse should die simultaneously or close in time?

Many young couples, especially those without children, shrug it off saying, “We don’t have anything” and figure they will address these questions farther down the line. The trouble is, most of us forget to come back to them or don’t want to think about such things, and the best time to contact an attorney and think through these difficult and often painful choices is *before* your family is in crisis. The bottom line is that if *you* do not address these questions and make these decisions, the state/a stranger will end up making them for you and their choices may be very different from your own.

Undoubtedly for parents of young children, the single most anxiety-producing question is what should happen to your children if you are not able to care for them yourself. While it is of course critical to determine whom you would want to be your children’s permanent guardian (and back-up/successor guardians), it is just as critical to name temporary/emergency guardians. If your spouse is far away on a business trip and your named permanent guardians are also far away, you may need a named temporary emergency guardian to care for your children until such time as your permanent guardians are able to arrive. Depending on where they are and what is going on in their own lives, that could be a considerable amount of time. If you don’t have immediate family nearby or name someone, it is entirely possible that your children will be placed into foster care temporarily rather than remaining with close family friends or relatives in their own or a familiar home.

To help you decide whether you should have a Will and other related legal instruments in place now, ask yourself the following questions:

1. Do you own a home, car(s), and/or jewelry (of sentimental and/or financial value)?

2. Do you have a bank account or accounts?

3. Do you have a life insurance policy?

4. Do you have a minor child or children? If so, have you legally named guardians to care for them temporarily and/or permanently in the event you become unable to do so?

5. Have you inherited a substantial amount of money from a relative?

6. Are you estranged from a closely related family member?

7. Do you or your closely related relatives have any special circumstances that might require distributing assets or property to you/them in a slightly different way?

8. Do you have someone legally appointed to make medical decisions for you in the event that you are unable?

9. Do you have someone legally appointed to manage your financial affairs (pay your bills, etc.) if you are unable to do so?

10. Do you have a Will? If yes, how many years old is it and does it still reflect your individual and/or family situation?

11. Do you have a Living Will? Do you think your family of origin might disagree with your partner or spouse under the stressful circumstances of your incapacity?

12. If you answered no to more than one of the above questions, why? (e.g. didn’t think it was necessary, don’t want to think about these things because it’s unpleasant, afraid can’t afford an attorney, other?)

Estate planning can be a very empowering process instead of the depressing, anxiety-inducing one you might have feared. If you work with an attorney who cares and listens to you and tries to help you as an individual meet your goals, then you are able to control how you pass on not only your financial assets, but also your intangible assets. Having a Will is not about plugging your name into some forms, tucking it away, and leaving it to collect dust until your eventual death (an attorney who will charge you hundreds of dollars to do just that is taking your money and running, leaving you and your loved ones largely unprotected). Estate planning should be an ongoing process and collaborative effort between you and your family’s attorney to ensure that your legal documents continue to meet your needs over time and weathering all of life’s changes.

As for cost, reasonable professional attorney fees are far less than the expenses involved in such matters as probating your estate and hiring all the related professionals, especially guardians for any minor child or children should both parents die simultaneously or close in time. The relatively small cost should be a top priority as a form of mental and practical “insurance.”

Wishing you and your family health, happiness, and priceless peace of mind!
-Danielle