On July 1, 2009 Article 5 of the Uniform Probate Code becomes law in Massachusetts.  This Code repeals certain sections of the Massachusetts General Laws (MGL) resulting in changes to probate regulations.

The probate laws govern your estate documents. Estate documents include the Last Will and Testament, Durable Power of Attorney, Health Care Proxy and Trusts.  It is a good time to review your documents and include the advantages these new laws afford.

Clients’ Concerns:

“My mother suffers from dementia.  She never drafted a Durable Power of Attorney or a Health Care Proxy.  My sister and I are fighting in Court to determine who will be appointed guardian and conservator.”

A Durable Power of Attorney is a document in which you designate a person to assume your financial responsibilities if you become either physically or mentally incompetent.  A Health Care Proxy accompanies a Durable Power of Attorney.  In a Health Care Proxy you chose the person to make your future healthcare decisions should you be unable to communicate for yourself.

If an individual becomes incapacitated without executing either a Durable Power of Attorney or a Health Care Proxy the Probate and Family Court appoints your legal guardian and conservator.  This creates an extra expense for your family, may create turmoil among family members, and most significantly, you have relinquished control over your destiny to the State.

“My mother’s Last Will and Testament was submitted to probate.  It took over a year for me to receive my inheritance.”

When a person dies leaving assets in their name alone, a probate estate, the Executor must Petition the Probate and Family Court to Probate the deceased’s Last Will and Testament.  The Court requires that the Executor publish an announcement of the deceased.  This action places creditors on notice and they have up to 1 year to make a claim against the estate.   Therefore, the Executor should not distribute assets until the one year period expires.  In contrast, nonprobate assets transfer immediately to the beneficiary upon the testator’s death.

“I am a MassHealth recipient and I will soon inherit money from my mother.  I need to draft a Special Needs Trust so I do not lose my benefits.”

The State protects disabled individuals age 65 and under.  A Special Needs Trust is a special trust in that it prevents a disabled person from losing public benefits should they receive money which makes them ineligible.  If your child is disabled it is wise to set up a testamentary Special Needs Trust as part of your estate plan, so that your disabled child’s life can be enriched by extra spending cash.

“My father left his entire estate to my mother.  When my mother passed away we had to pay an estate tax which depleted 50% of her assets.”

In Massachusetts an entire estate is taxed if it is valued over $1,000,000.  This means that if you own $1,000,001 the entire amount is taxed.  Whereas, the federal estate tax works as an exclusion.  Currently the federal estate tax is $3,500,000.  So, if your estate is valued at $5,000,000 only money above $3,500,000 is taxed.   For larger estates it is cost efficient to apportion the tax between the spouses, instead of paying on the second to die.