FREQUENTLY ASKED QUESTIONS is common Estate Planning issues

1. Please note: Seek the advice ofan attorney where these legal issues are concerned
FREQUENTLY ASKED QUESTIONS
1. Why should I have a will?
A will provides the opportunity to stipulate with clarity the people you would like to
have receive your assets upon your death. In addition to making gifts of your assets, it
is the document in which you can name guardians of minor children who are under
the age of 18 and to name a custodian to manage the assets for these minor children.
2. What if I die without a will?
If a person passes away without a will, it is necessary that we look to (the) law to
determine which people are to inherit the decedent's assets. (Intestate)
3. Then who inherits if I don't have a will?
This can be a variety of people, including a spouse, parents, children, brothers, sisters,
etc. in some combination of percentages. Determined by the legal process
4. If my family is going to inherit my assets then why is this not a good approach?
The effect of not having a will is that there will be substantially greater probate court
involvement in the administration of the estate as we are relying on the state law to
determine who will inherit. In the most extreme of circumstances, should you pass
away without a will and have no living heirs surviving you, then the assets will pass to
the State.
5. Does a will control where all of my assets go?
Your will only controls assets which are in your name alone at the time of death.
6. What happens to my other assets?
Jointly-owned assets (such as a residence owned jointly by husband and wife or a bank
account owned jointly by a mother and child) do not pass through your will. In
addition, assets which have a contract beneficiary (such as life insurance, individual
retirement accounts and retirement plans) do not pass through your will.
7. Does the will avoid probate?
Probate court involvement in your affairs is required any time a person passes away
with assets in their name alone. In such cases, it is necessary that the probate court
become involved to unfreeze the assets which became frozen at the time of death.

2. Please note: Seek the advice ofan attorney where these legal issues are concerned
Through proper planning, the involvement of the probate court can be minimized or
avoided completely at the time of death. (see probate avoidance article)
8. Do I need a lawyer to prepare a will?
It is not a legal requirement that you obtain legal counsel to prepare a will. Volumes of
case law have been written about wills which have been prepared but improperly
signed or witnessed.
9. What are the signature requirements for a valid will?
Under (the) law, it is necessary that two individuals witnessed the signing of your will
and that the document be notarized. Failure to adhere to these requirements can
invalidate the will.
10. Can I change my will?
A will can be changed; however, to do so requires you sign an amendment to your will
(known as a codicil) with the same witness and notary requirements as signing your
original will.
11. What is a living trust?
A trust is a contract between a person who is creating the arrangement and the person
who has been named as the trustee. Typically, this type of arrangement is written and
stipulates the rules and regulations the creator feels is important for the particular
circumstances.
12. Why would I have a Living Trust?
Living trusts can be used for a variety of reasons such as for the protection of assets for
minor children, minimization of estate taxes and controlling assets after the death of
the creator. (See living trust article.)
13. Does my trust go through probate?
A living trust is specifically designed so that it does not pass under the control of the
probate court. If properly drafted, the trust and all assets the trust controls at the time
of the creator's death, does not pass through the probate court. (See probate avoidance
article.)
14. Does a trust have the same witness formalities as a will?

3. Please note: Seek the advice ofan attorney where these legal issues are concerned
Under Massachusetts law, a trust is valid if signed by the creator and by the trustee.
The witness formalities of a will do not apply to a trust. For this reason, the trust is a
more flexible document to change from time to time as the witnessing requirements of
a will do not exist.
15. What is a durable power of attorney?
A durable power of attorney is a legal document designed to provide another person
with legal authority over your financial affairs should you become disabled.
16. Why would I want to give some authority over my assets?
Both single and married people very often will have assets in their name alone or have
assets which mandate they be the signatories. If the owner of the account became
disabled, no other person would have access to those assets. The durable p ower of
attorney provides a cost-effective means for a family member or friend to take charge
of financial affairs in the event of disability.
Avoiding Probate Through Living Trusts
It has become an increasingly common goal of those undertaking their estate planning to
pursue the avoidance of Probate Court involvement in the settlement of their affairs after
death. While there are several ways to structure an estate plan and the related ownership
of assets to achieve this goal, planners have found that through the use of funded Living
Trusts that the desired goal of avoiding Probate Court involvement can be achieved with
the least amount of risk or loss of control over assets.
To understand the value of the Living Trust in avoiding Probate, it is first necessary to
understand the Probate Court process itself. In its simplest form, the Probate Court
process is one in which the Probate Court will re-title the assets owned by the decedent at
the time of his or her passing. Since assets owned by a person in his or her own name
cannot be dealt with after that person's death, it is necessary that there be a Court process

4. Please note: Seek the advice ofan attorney where these legal issues are concerned
to orderly administer these assets andtransfer them to those persons named in the
decedent's will (or to those persons who would inherit under state law if there was no will).
Due to tax filings and creditor rights, it can often take anywhere from nine months to
several years to complete the probating of an estate. Coupled with the cost of the Court
process and the associatedlegal fees, people often labor to avoid subjecting their assets to
this Court process.
To fully avoid the Probate Court process, at the time of death a person cannot own assets in
his or her name alone. Understanding this, many single people/surviving spouse's will place
their assets injoint names with children or other relatives. By doing this, at the time of
death, the assets will pass by rights of survivorship to the surviving joint owner without the
necessity of Probate Court involvement. While this sounds as though the goal has been
achieved, this approach can be fraught with disaster. The stories of jointly owned real
estate with children, who then mortgage the property and lose it to foreclosure, or pledge
the real estate as part of a business venture, only to lose it in bankruptcy or to a creditor
are well known Issues of divorce of a joint owner, creditor problems or death of the
younger joint owner only add to the reasons why this approach to avoiding Probate should
be undertaken with caution.
The better approach to avoiding Probate is through the use of a funded Living Trust of
which the creator is also the Trustee. The Living Trust, or commonly referred to as the
Revocable Trust or Family Trust, is a private contract between the person or persons
creating it, the Grantor, and the person or entity they have chosen as their Trustee. It is
private since no court intervention or formal legal entity is involved in authorizing,
creating or overseeing its operation. It is "Living" since the Trust is created currently and
given life by providing it an asset to own. Typically, the asset it owns is an initial funding of
$20.00. By funding the trust it is legally in existence and has "life".
Once created the Trust can be made the owner of all of a person's assets, so that at the time
of death, the person owned no assets intheir own name, and therefore has no need for
Probate Court involvement. The Trust would name the creator or Grantor as the sole
Trustee. By doing this only the Grantor would have control over the assets during his or
her lifetime. The trust would be drafted to allow the Grantor to have exclusive rights to the
assets placed in the trust, and upon the Grantor's death, the assets will pass (without
Probate Court intervention) directly to the people named as beneficiaries. A related benefit
to this type of arrangement is that should the beneficiaries be young, the Trust can provide
terms under which assets for young children can be held until they attain a more mature
age. While we typically refer to this type of arrangement for single people, the same
techniques can be used for married people by creating a joint trust, so that upon the
passing of the survivor of the spouses the assets will fully avoid Probate.
During lifetime, the only change required is that the name on the various assets (bank
account, stock brokerage accounts, real estate, etc...) be changed to reflect the Trust
ownership. Bank accounts and other assets would no longer have an individual's name on
it, but rather, would have the Trust's name, such as the "John Jones Family Trust" rather
than "John Jones", individually. The income earned would be taxed as it always had been
taxed, using the individual's social security number as the identifying number for the
Trust. For married couples with substantial family assets (over$600,000) the funded Living
Trust, in addition to avoiding Probate, is used to help defer or eliminate the impact of the
federal estate tax upon the death of one or both spouse's. The very simple Living Trust that

5. Please note: Seek the advice ofan attorney where these legal issues are concerned
we would use for Probate Court avoidance purposes would be tailored to capture the
various allowable tax benefits. These tax motivated trusts are commonly referred to as
Credit Shelter Trusts, Qualified Terminal Interest Property Trusts (Q-Tip) or A-B Trusts.
By creating and funding the private Living Trust you afford yourself maximum flexibility
in controlling your family assets during your lifetime while avoiding the expense and delay
associatedwith Probate Court involvement in passing your assets to your heirs after you
have passedaway.
Living Trusts - Why and When?
The Living Trust has become almost synonymous with Estate Planning. The Trust is a
private contract between the person or persons creating it and the person or entity they
have chosen as their Trustee. It is private since no court intervention or formal legal entity
is involved in authorizing, creating or overseeing its operation. It is "Living" since the
Trust is created currently and given life by providing it an asset to own. Typically, the asset
it owns is an initial funding of $20.00. By funding the trust it is legally in existence and has

6. Please note: Seek the advice ofan attorney where these legal issues are concerned
"life". Once funded the trust can serve many family and estate tax planning needs since it
is capable of receiving assets at anytime, whether during lifetime or at death at the
direction of your Will, and the Trustee will hold, manage and distribute these assets based
on the rules you have established in creating this private contract/trust.
There are many reasons why utilizing a Living Trust can fit into your family and estate
planning needs. Many young families with minor children have life insurance policies
which would create substantial cash should both parents pass away in a common disaster.
For families with a special needs child, it is often preferable that assets not be left outright
to the child, but rather, they should be left to a trust for that child's benefit, to supplement
any other financial resources that the child may be receiving. Similarly, in families where a
child has a substance abuse problem the parents may want that child's inheritance to pass
to their trust to be held for that child's benefit for some period of time.
One opportunity afforded by a Living Trust is that it can receive and own assets at
anytime. While most families elect not to have assets (other than the initial $20.00) pass to
the trust during their lifetimes, there are occasions where it is appropriate to fund the trust
during your lifetime with virtually all of your assets, in an effort to avoid the assets having
to pass through the Probate Court at the time of your death.
For people with substantial family assets (over$800,000 including the value of insurance
policies) the Living Trust is used to help defer or eliminate the impact of the federal estate
tax upon the death of one or both spouses. The very simple Living Trust that we would use
for the young family is tailored to capture the various allowable tax benefits. These tax
motivated trusts are commonly referred to as Credit Shelter Trusts, Qualified Terminal
Interest Property Trusts (Q-Tip), A-B Trusts or Charitable Remainder Trusts.
By creating the private Living Trust you afford yourself maximum flexibility in controlling
your family assets forthe benefit of your heirs after you have passedaway and where
possible maximizing the available estate tax benefits.