A Brief Overview of Estate Planning in Massachusetts
Intestacy: If a Massachusetts resident passes away without a properly executed will, Massachusetts law provides for the following property distribution scheme:
|Spouse and issue (children and grandchildren)||Spouse receives ½ of the estate.
Issue shares the other half equally.
|Issue, but no spouse||The estate passes in equal shares to the decedent’s children and to the issue of any deceased child per stirpes (by right of representation).|
|Spouse and kindred (siblings or their issue if siblings predecease the decedent) but no issue||The spouse receives the first $200,000.00 and ½ the remainder.
The kindred split the rest.
|Only the spouse||Spouse receives the entire estate.|
|A parent or parents, but no spouse or issue||Parent or parents receive the entire estate.|
|Only kindred||The kindred receive the entire estate in equal shares.|
Estate Tax Exclusion Amounts — Federal and Massachusetts: Estate taxes apply an exemption structure, which is $3,500,000 in 2009. This means that a gross estate containing assets less than $3,500,000, will not be subjected to federal estate taxes. However, for Massachusetts residents (and non-residents with tangible property in Massachusetts) dying after January 1, 2003, a Massachusetts estate tax applies where the exemption amount is $1,000,000. Thus, a person may not have a federal taxable estate, but may have Massachusetts estate tax liability.
Two Benefits to Estate Planning with a Trust: (1) A trust allows the transfer of property without the need for probate of a will, thereby eliminating the delay of transferring the decedent’s assets; and (2) Privacy because there is no public probate process associated with non-testamentary trusts.
Durable Power of Attorney (DPOA): Document whereby a competent individual (the “principal”) designates another to act as his or her attorney-in-fact. Once in effect, the attorney-in-fact can basically do anything the principal would have done, including signing checks and tax returns, entering into contracts, buying or selling real estate, and running the principal’s business.
Health Care Proxy: Document executed by a competent individual (the “principal”) who appoints another individual (the “agent”) to make medical decisions on behalf of the principal in the event that the principal lacks the capacity to do so.