Everyone needs an estate plan and estate plans do not have to be complicated. A simple estate plan consists of 3 documents:
(1) Last Will and Testament;
(2) Durable Power of Attorney; and
(3) Health Care Proxy.
The pitfalls of not having these documents are significant, and can be quite costly for your estate. Did you know that if you become cognitively impaired or incapacitated without having a Health Care Proxy or a Durable Power of Attorney, a guardian or conservator appointment may be required to assist you in handling your own needs? This process is administered by the Probate and Family Law Court. The process of having a court decide whom to appoint as agents in these capacities places you at risk for having a party entrusted with making significant personal decisions that you may not have chosen and do not want acting in this capacity.
Similarly, if you decease without a Will, your estate will pass in accordance with the laws of intestacy. Therefore, your estate may be given to heirs that you did not select or whom you would not have selected. If you have minor children and you decease without a Will, the Court will appoint a guardian and conservator that you may not have approved of for your children.
Further, is your estate plan more than 5 years old? If it is, then it probably needs to be updated.
If any of the above situations apply to you, contact Arcari Law and our Estate Lawyer will develop an estate plan that properly addresses your needs. If you desire a more complicated estate plan, we will discuss the use of Trusts and how those may apply to your estate plan.
Trusts may be useful both for estate planning purposes and for holding title to real estate. A Trust is a written instrument whereby a trustee (a named individual) holds title to real estate or property for the benefit of a named beneficiary or beneficiaries. Trusts separate the legal and equitable ownership of the property held under trust. The trustee retains the legal ownership while the beneficiaries retain the equitable ownership.
Basically, there are two types of Trusts in Massachusetts: testamentary or intervivos, although there are many different names for these types of Trusts. For example, most people have heard of Nominee Trusts, or Real Estate Trusts, or Living Trusts, or Revocable or Irrevocable Trusts. They are all an outgrowth of one of the trust forms named above.
A Testamentary Trust is a Trust created by a Will or other document dealing with the estate of the donor and only comes into use upon the death of the donor. Therefore, the donor’s death springs the Testamentary Trust into existence.
An Intervivos Trust is created during the donor’s life and is in existence while the donor is alive. A Nominee Trust is one type of an intervivos trust and often is utilized to hold title to real estate. A Nominee Trust bestows legal title to the property to the trustee for the benefit of the named beneficiaries.
With respect to real estate trusts, since Mass. Gen. Laws Chapter 184, §35 was enacted, the Schedule of Beneficiaries of a Declaration of Trust is no longer required to be recorded at the Registry of Deeds. Therefore, the identity of the beneficiaries is no longer a matter of public record.
In order to determine whether a Trust is necessary or worthwhile in your estate plan or as part of your real estate portfolio, more discussion is necessary. Ensure you have all the facts which I will be happy to explore with you.