Woburn, MA Estate Planning and Elder Law

Treating Your Children Fairly

One of the biggest problems in estate planning is figuring out how to treat children fairly in circumstances when fairly does not necessarily mean equally.

The default estate planning option for people with more than one child is to divide their estates equally between their children. That is the most common thing that is now done in estate planning.

It is easy and simple.

Most of the time it is a fair way to divide a parent's estate and one that the children accept. That does not always work, however, because as every parent eventually learns, treating children fairly does not always mean treating them equally. That holds true in estate planning.

Adult children can wind up in very different life circumstances for a variety of reasons. For example, if one child became wealthy after receiving a large gift from his parents to start a business, it might not be fair to treat that child the same in an estate plan as another child who went into public interest work.

Figuring out how to divide an estate unequally but fairly between children can be difficult, as the Wills, Trusts & Estates Prof Blog discussed in "Dividing Your Wealth Among Your Children."

The biggest problem is figuring out how to make the unequal division without causing any of the children to dispute the estate. Trusts are extraordinarily helpful in these situations, since they are much more difficult to challenge.

Parents can create a trust with an independent trustee and give the trustee the power to make distributions to the children based on their circumstances and needs. It is also important that parents who are leaving unequal inheritances for their children talk to the children and let them know the reasons for doing so.

If you want to leave your children unequal inheritances, you need to seek the advice of an experienced estate planning attorney to make sure you do so in a way that your children will think is fair and not seek to challenge.

Reference: Wills, Trusts & Estates Prof Blog (May 5, 2017) "Dividing Your Wealth Among Your Children."

If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit our contact us webpage.

Client Testimonial

We received this testimonial from a satisfied client:

“Ken Simmons has been excellent to work with on our estate planning. He’s extremely knowledgeable and helpful. He is easily accessible and always great with explaining the details of our plan and always happy to answer any of our questions. We have and will continue to recommend Ken to anyone who may be looking. He’s the best!”

– David B.

For additional testimonials, click here

No Estate Tax Does not Mean no Estate Planning

With the release of President Trump's tax plan and Republican majorities in Congress, it seems inevitable that the estate tax will go away. That does not eliminate the need to do estate planning.

A big part of modern estate planning is planning around the estate tax. Many estate planning instruments were designed to help lower the estate tax burden on wealthy estates.

Without an estate tax, it might seem that there is not much of a reason to do complex estate planning at all. Some people anticipate that will be the case soon, since President Trump has released a tax proposal that would eliminate the estate tax and Republicans who hold majorities in both houses of Congress agree with the idea.

However, it is not that simple as Financial Advisor recently discussed in "Estate Planning: It's Not Over."

It still is not clear when, if and how the estate tax might be repealed.

Congress could choose to phase it out over a few years or scrap the idea entirely, if they cannot agree on offsetting spending cuts or where to raise revenues from elsewhere. Senate Democrats could also mount a filibuster over any tax plan that Republicans propose, which they are expected to do.

No elimination of the estate tax is permanent, of course. Even if it passed now, it could always be reinstated when Democrats control government again.

While you might be excited about the elimination of the estate tax, do not make the mistake of thinking that means you can make your estate plans with the assumption in mind that it will go away for good, if it does at all.

Reference: Financial Advisor (April 3, 2017) "Estate Planning: It's Not Over."

Simmons & Schiavo, LLP • (781)397-1700 • [email protected] • www.simmonsandschiavo.com

Trump's Tax Plan

After much anticipation, President Trump released his long awaited tax plan. While there is much for wealthy people to cheer in it, including eliminating the estate tax, no one will want to cheer too much or too soon.

Since taking office, President Trump had been promising that he would reveal a plan for tax reform. He gave very few details about it, except that it would contain some of the biggest tax cuts in history, if not the biggest.

The White House finally released the anticipated plan, although many details are still missing.

The plan, if passed, would be one of the biggest tax cuts in history. Most experts agree that it includes large tax breaks for wealthy people, including eliminating the estate tax and the alternative minimum tax.

Income tax rates on the highest earners would be cut dramatically, as would corporate tax rates.

The proposal does not just cut the taxes of the richest. Some middle class and lower income earners would see tax decreases coming from a doubling of the standard deduction.

The New York Times reported on the plan in "White House Proposes Slashing Tax Rates, Significantly Aiding Wealthy."

The President's tax plan has a long way to go before it is passed.

What was released was a one-page list of bullet points without any accompanying details. It will be up to Congress to determine the details of how to implement the plan.

The list did not indicate how the tax cuts should be paid for, which is likely to displease Republican deficit hawks.

Democrats are also likely to oppose the cuts and might filibuster them in the Senate.

Reference: New York Times (April 26, 2017) "White House Proposes Slashing Tax Rates, Significantly Aiding Wealthy."

Simmons & Schiavo, LLP • (781)397-1700 • [email protected] • www.simmonsandschiavo.com

John B's Mistakes

A new podcast is a great opportunity to learn about some basic estate planning mistakes.

Serial might be the most successful podcast of all time. Millions of people tuned in to hear the story of a murder and its aftermath. It was one of the first podcasts to receive mainstream critical attention.

Thus, it is not a surprise that its creators are back with a successor show, S-Town.

This new podcast features the story of John B., the resident of a small town in Alabama. He lives on a 128-acre estate and is believed to be wealthy by the community. He was living with his octogenarian mother with dementia.

John B. apparently told his friend Tyler that he did not have any bank accounts and that Tyler could have $20,000 from his estate. The next day, John B. committed suicide. He did not have a will, but instead left a series of instructions about what to do with his estate.

The drama of the story is in people trying to find out what happened to his money, if he had any at all.

The Wills, Trusts & Estates Prof Blog discussed this podcast in "Estate Planning Lessons from John B."

John B. made some basic estate planning mistakes that everyone can learn from.

First, he did not have a will. While leaving some written instructions is better than nothing, it is not worth very much legally. If any money can be found, then under Alabama law, it will all go to his mother.

His friend Tyler would get nothing.

A simple will could have solved that problem.

Care for his mother is set to go to another relative who has been appointed as guardian. Of course, no one should go completely without a bank account.

Do not make the same mistakes as John B.

Hire an attorney and get a will.

Reference: Wills, Trusts & Estates Prof Blog (April 21, 2017) "Estate Planning Lessons from John B."

Simmons & Schiavo, LLP • (781)397-1700 • [email protected] • www.simmonsandschiavo.com

Mary Kills People

If you have ever wanted to watch a television drama about physician-assisted suicide, you now have your chance.

A normal television show about a brilliant emergency room doctor who kills people in her off hours, would probably be a very dark drama about a serial killer, if there was such a show at all.

Normally, doctors are treated on television as nothing but heroic and rarely involved in anything too controversial. However, a drama from Canada now airing in the U.S., seeks to tell a different story.

In this show, the brilliant doctor is killing people who wish to pass away. She moonlights by performing euthanasia, also known as physician-assisted suicide.

The New York Times recently reviewed the show in "Review: 'Mary Kills People,' but It's for a Good Reason."

While the Times review is somewhat mixed, that this show exists at all highlights the changing attitudes about euthanasia.

It was only a couple of decades ago when Dr. Kevorkian was seen as the evil "Doctor Death." Now, many people are taking the idea of physician-assisted suicide seriously.

A few states have recently legalized the practice and many more are considering it as part of the dying with dignity movement, which seeks to allow terminally ill people the choice of when they want to pass away and under what circumstances.

The concept, however, is still controversial since not everyone agrees it is a good idea.

This new television show is certain to draw more attention to the concept and get people talking about it even more.

Reference: New York Times (April 21, 2017) "Review: 'Mary Kills People,' but It's for a Good Reason."

Simmons & Schiavo, LLP • (781)397-1700 • [email protected] • www.simmonsandschiavo.com

Social Security Myths

A recent survey found that most Americans think they know how the Social Security program works. The same survey found that most actually have some important misunderstandings about the program.

The Social Security program seems simple enough. When you reach retirement age, you can stop working and the government will send you a check, the amount of which is based upon your income during your working years.

People understand that much which leads them to believe that they know all they need to about the program.

However, a recent survey found that most people between the ages of 55-61 believe some myths that need to be corrected, as CNBC reported in "The three biggest myths about how Social Security works." The myths include:

• Many people think that when they become eligible for Social Security, the government will know and automatically start sending them a monthly check. That is not true. You need to apply for Social Security and you need to do so, three months before you plan to receive it.
• Another common misconception is the retirement age to receive full benefits. It depends on when you were born.
• People also believe that if an ex-spouse claims Social Security benefits under their work history that it will decrease the amount of their benefits. This is also a myth. An ex-spouse's claim will result in no changes to any benefits that you will receive.

Reference: CNBC (April 25, 2017) "The three biggest myths about how Social Security works."

Simmons & Schiavo, LLP • (781)397-1700 • [email protected] • www.simmonsandschiavo.com

Getting Upset Over Another's Estate Plan

Sometimes when we hear about another person's estate plan, we may tend to get upset, if we think we are slighted in some way. It is a good idea to think about the plan from the other person's point of view.

There is a very human tendency to get upset whenever we initially feel slighted by someone else. A recent advice column in philly.com, "Wife upset by in-laws' plans for their estate," illustrates why it is sometimes better to hold off on the anger and look at things from other people's points of view.

A woman wrote in to say that her husband had a teenage son from a previous marriage. The woman was cleaning out papers from their office and discovered a printed out email from her father-in-law to his attorney. The father-in-law was asking how to set up his estate, so it would be certain to go to the teenage son, and not the woman, after her husband passed away.

This upset the woman, since she felt that she was being viewed as not being trustworthy enough to make sure the teenage son received an inheritance after her.

The problem here is that if the woman had seen this from the father-in-law's point of view, she might not have been so upset.

He wanted to make sure that his assets were kept in the family and that his grandchild would eventually receive them. The woman could have possibly gotten remarried or had a falling out with the son after her husband passed away.

From the father-in-law's perspective, he merely wanted to make sure his grandchild was taken care of, which was not necessarily making a judgment on the woman's character.

Reference: philly.com (April 23, 2017) "Wife upset by in-laws' plans for their estate."

Simmons & Schiavo, LLP • (781)397-1700 • [email protected] • www.simmonsandschiavo.com

The Danger of Wills

It is easier to get wills today than it ever has been, since forms can be downloaded and filled out on your own. However, that ease has led to many people not understanding the potential dangers of wills.

That everyone should have an estate plan is a principle which most people understand when the reasons are explained to them. Estate plans, even as simple as a will, at the very least can help prevent families from fighting over estates.

Since you do not know when you will pass away, you should go ahead and get an estate plan.

While most Americans still do not have a will, a greater percentage of Americans have them than ever before. It is easy and cheap to get wills today, since you can purchase downloadable forms from several different services.

However, there are some hidden dangers in doing that, as The New York Times explained in "Wills Can Avert Family Warfare, but Have Their Own Hidden Traps."

The biggest issue is that the probate process is different in every state.

Submitting a will to probate for administration, in some states, is very expensive and can take a long time. That suggests that probate avoidance strategies should be used, which could lead some people to utilize a trust instead of a will as their primary estate planning vehicle.

There are other probate avoidance strategies that can be used, but they also have their drawbacks. For example, retitling an asset as joint property with a child, which is a common tactic, can make the asset vulnerable to the child's creditors.

The best thing to do is to hire an experienced estate planning attorney in your state, so that attorney can help you with the best estate planning strategy for your state and your estate.

Reference: New York Times (April 21, 2017) "Wills Can Avert Family Warfare, but Have Their Own Hidden Traps."

If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit our contact us webpage.

Slayer Statute Limitations

Slayer statutes are designed to prevent people from inheriting the assets of people they have killed, but they have their limitations.

You have probably heard this plotline before. It is a common one that goes something like this: a younger relative of a wealthy person in need of money or just plain greedy, murders the elderly relative to inherit his or her estate or cash out a life insurance policy.

This is more than just a Hollywood fantasy. It happens in real life.

There are even famous examples from history, such as the Roman Emperor Tiberius who was killed by his heir Caligula or so the writer Suetonius alleged.

We actually do have laws that are designed to prevent this from occurring known as "Slayer Statutes."

They generally state that people cannot inherit from those they are responsible for killing.

However, they can have their limitations, one of which the Wills, Trusts & Estates Prof Blog discussed in "Court Determines that Slayer Statute is Not Applicable in Self-Defense Case."

In the case discussed, it was not clear what led to the death of the holder of a life insurance policy. The sole beneficiary of the policy was involved in the death and had given conflicting statements.

The beneficiary was not convicted of murder and claimed self-defense.

The deceased's sister sued to claim the policy, but the court decided that since there was some merit to the self-defense claim, the slayer statute did not apply.

Needless to say, it is good that slayer statutes exist to guard against profiting by killing, even if the statutes do have some limitations.

Reference: Wills, Trusts & Estates Prof Blog (April 11, 2017) "Court Determines that Slayer Statute is Not Applicable in Self-Defense Case."