Coming from a line of women with a whole lot of superstitions, it never occurred to me to prepare an estate plan. It would be like tempting fate. But when I met Attorney Deborah Danger at a dinner party it changed my tune. She helps people create customized wills, trusts, and estate plans, and was a lot of fun to talk with. (This is a woman who created a board game to help teach people about estate plans!) Today, she graciously spent time educating me about what’s involved with creating a customized plan.
LM: What are the typical reasons people call you?
DD: I usually hear from people when they’re starting a family or have bought their first home and want to make sure they protect their loved ones in case something happens to them. I also get calls when people are divorcing and wondering how to handle lump sum alimony payments and other court-mandated changes in their financial situations. Finally, contending with the declining capacity of a parent or spouse typically generates questions about care and asset protection.
LM: Do you hear from many people who never created a will?
DD: Absolutely. Only about 30 of people in the U.S. have a working will, yet it’s an important step for protecting assets, making sure wishes are honored, and is actually one of the nicest things you can do for your loved ones. For example, in this day and age it’s not unusual for a client who has children from a previous relationship to wish for a friend, relative, or significant other to continue to live in the client’s home after the client’s death, or to wish to set aside money for a particular purpose or person. Unless documented in a will, these wishes are unenforceable and the client’s children will have legal priority over the client’s assets…contrary to the client’s wishes.
It’s also equally important to accommodate disability and emergency situations into your plan.
LM: Where will your assets go if you pass away without a will?
DD: It depends. The state has a plan for each of us, depending on whether we are married, have children, and which of our family members survive us. For example, married couples without children are usually unhappy to find out that if one spouse passes away without a will, the first $200,000 of the money will go to the surviving spouse and the remainder will be split between the surviving spouse and the predeceasing spouse’s parents. These people usually opt to draft a will to prevent this plan from kicking in. (Tip: If your surviving spouse isn’t keen on sharing property with his/her in-laws, that’s one good reason to put a will in place.)
The laws that dictate how your assets will be distributed if you have a blended family also frequently fail to match a new couple’s intentions. Consulting with an estate planning attorney will not only help you identify what you want to have happen to your stuff, but will also prevent things that you don’t want to happen to your stuff from happening. In other words, creating a will gives you more flexibility and control, and ensures that your wishes are carried out.
LM: How do I know if my estate plan needs to be updated?
DD: Recently, there have been significant changes in both the federal tax laws and Massachusetts’ probate laws that may necessitate changes to your documents. Overall, this is a pretty dynamic area of law, so I recommend clients review their documents every three to five years. It’s also important to look at your plan when you’re going through changes in your life, such as:
• Buying a new property
• Getting married or divorced
• Expecting or adopting a new baby
• Facing a significant illness
• Dealing with the death of a loved one
If you aren’t sure about something, please give me a call and ask about your specific situation. I don’t charge for phone calls and I enjoy talking to new people.
LM: I often see some homeowners putting their homes into trusts. Do you recommend doing so?
DD: Sometime. It depends on the client’s situation. There are a lot of benefits to putting property in trust. It allows for greater flexibility and privacy. In many cases, it can help you reduce estate taxes and avoid probate court. It is also an excellent way to accommodate disability and declining capacity and may help to protect assets.
It really depends on your personal situation. There are several different types of trusts. A revocable trust may be best for one client and an irrevocable trust may be better suited to another. In other cases, a trust is not a good fit. For example, if you own a business or work in a job where you may be personally sued, the possibility of litigation may dictate another form of ownership.
LM: Are there additional steps you can take to protect your assets?
DD: Yes. Many people are surprised to learn that if one of their adult children is sued for divorce, their estate plan is discoverable and that child’s inheritance may become a negotiation point of the divorce. Anticipating this potential outcome in one’s estate planning can protect against this unwanted outcome.
Additionally, unmarried and same-gender couples will need additional language in their estate plans to compensate for the fact that their relationship is not universally recognized throughout the country or the world.
The information in this article should not be relied on as legal or tax advice. To learn more, please contact Attorney Danger at 617-789-4511, Attorney@DangerLaw.com, or http://dangerlaw.com. She also offers free consultations and a 5 discount to anyone who makes her laugh…and that’s very easy to do.