Do I Need a Last Will and Testament?

Many people do not prepare a Last Will and Testament, and this leads to the state where you are a legal resident at the time of your death with the responsibility of distributing your assets.  This may not be done in the manner that you would have distributed your assets, if you had the opportunity to make the decisions regarding, ”Who gets what.”  A Last Will and Testament addresses the issue of how your property will be distributed at the time of your death.  Planning now, as how to distribute your assets will not only save your loved ones from additional anguish at a time of bereavement, but can also reduce some of the taxes and death penalties paid by an estate.

It is also very important that your heirs be aware of where your will can be located.  Keeping your will in your safe deposit box may not be the best place for a document as important this.  Remember, the will must be presented to Probate Court, and often a safe deposit box is frozen upon the death of the owner, even if there is more than one owner.  Consider giving your will to either your attorney or to one of your heirs for safekeeping.

Probate is a process in which a transfer of assets is made to those persons named in the decedent's will, or to the individuals who inherit if there was no will). This can be a very lengthy process to completely dispose of an estate. This can also be a very expensive process; therefore many persons try to manage their financial affairs to avoid having their estates going through the Probate Courts processes..

There are ways to transfer property without a will.  Some persons do this in the hopes of avoiding a probate of their assets after their death.  Many persons choose to own assets with someone else Such assets may include their home, land, cars, bank accounts, stocks, bonds, credit union accounts or any other kind of property. Safe deposit boxes often have more than one name listed as owner. 

When two or more persons own assets, they are usually known as "Joint Tenants with a Right of Survivorship.  Sometimes having the word "or" between their names, makes the owners of a property Joint Tenants with a Right of Survivorship. It is very important that you understand what this means. 

Sometimes, people will place their assets in joint tenancy to let another person to be able to do business in their names, but they must be aware they are giving their asset away in the event of their death.  Many people do this to let an heir to manage their financial affairs if they become too disabled to do so themselves.  Be aware of what rights of ownership of your property that you are signing away. 

The use of joint tenancies is also a way to avoid probate since the surviving joint tenant automatically owns whatever assets at the death of the other tenant.  Be aware that there are pitfalls in this arrangement as well as benefits.  Joint tenancy will transfer assets at death without Probate; this arrangement can also cause the risk of your assets.  Be aware that the laws covering joint tenancy can differ greatly from state to state. 

If your state has community property laws, property owned by spouses in joint tenancy may not be eligible for the same tax benefits if one spouse dies. The joint tenancy property does not always carry survivorship benefits. The same situation also apply to other joint owners, so be sure to investigate the laws of your state of residence before transferring any of your assets into joint tenancy assets. The possible tax loss might make the expense of probate a bargain.  Investigate any consequences of asset transfers carefully, and be careful where your advice comes from. 

The Probate Court process is where the Court transfers only those assets wholly owned by the decedent at the time of their death.  If any asset is owned in joint tenancy, that asset is automatically transferred to the other party. However, under different circumstances, that asset may be used to settle any debts or liabilities of either of the joint tenants. Therefore, if one joint tenant is held responsible for any settlement of financial damages, the joint tenancy asset could be at risk. The other joint tenant may be in the position of having to defend their property, even though they were not responsible for any of the debt.

Also, be aware that because jointly owned assets are transferred directly to the survivor, they are not included in any property or assets covered by your will or trust.  It is very possible to not consider this when dividing your assets among your heirs.

Joint tenancy has many important limitations, and the best person to help you make decisions as to the way to manage the eventual ownership of your assets is your attorney.  You will find that bank personnel may recommend joint tenancy because having multiple signers on an account may make it easier for you to access your money.. Real estate people may recommend joint tenancy as a way to avoid probate. Stockbrokers may advise you that it makes transfers simpler.  But your attorney is a person who is familiar with all the aspects of this type of ownership. The attorney will review your assets and wishes for transfer on your death and will be able to advise you how to manage your assets accordance with your wishes.

One form of joint ownership does require the asset be listed as part of the probate estate. This form of ownership is known as "tenancy in common". In a tenancy in common the two joint owners each own their respective halves of the property such that upon the passing of one of the co-owners the property does not pass to the survivor. For this reason the asset is treated as though the decedent's portion of the asset was owned in his or her name alone.

It is also important to consider how your assets should be handled in the event of your being disabled. Options for this situation might be a power of attorney or the use of trusts. Your attorney should design a complete plan that protects your interests and follows your wishes. 

The main goal of the Probate Court is to ascertain that all of the decedent's wishes are followed as stated in their will. For this reason it is important that the latest version of the will is the version that is presented to the Court.  Be certain to inform your heirs where the original copy of your will is.  If more than one original will is submitted for probate, the most recently executed valid will is the one that will be declared valid. Therefore, if you change your will, you should destroy any previous will in order to be certain that your final wishes are adhered to. 

Many persons have made the art of estate planning to be the avoidance of Probate Court in the distribution of their assets after their death.  There are several ways to accomplish this goal; estate planners often employ the use of funded Living Trusts.  These are seen as having a small risk of loss of control over assets.  To fully avoid any Probate Court procedures, you cannot own assets in your name alone at the time of your death.  Therefore, many single persons or surviving spouses will place their assets in joint tenancy with their children or other relatives. Again, at the time of death, those assets will pass to the surviving joint owner without the any Probate Court action.  However, this approach can be lead to all kinds of problems. The person who has joint tenancy ownership of any asset can make any type of ownership decisions that might not follow tour wishes.  Sometimes it is wiser to have your assets under go Probate rather than to risk your asset due to the actions of your joint owner.

Another way to avoid Probate is through the use of a funded Living Trust.  A Revocable Trust or Family Trust is a private legal agreement between you and the person or persons you have chosen as your Trustee. It is a private agreement, requiring no court intervention. It is "Living" since the Trust is given life by providing it an asset of its own.  The asset it owns can have a very small value, under a hundred dollars.  By creating the asset, the trust is legally created; it has a "life." 

Once it has been created, the Trust can own all of a person's assets, so that at the time of death, the person will have owned no assets in their 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 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 associated with Probate Court involvement in passing your assets to your heirs after you have passed away.

Local Area Agencies on Aging in your community often have an ombudsman who is either familiar with these issues or can refer you to someone who is.

It is also important to consider how your assets should be handled in the event of your being disabled. Options for this situation might be a power of attorney or the use of trusts. Your attorney should design a complete plan that protects your interests and follows your wishes. 

Most people don't prepare a living will or any health-care directives.

Funeral Issues

If a decedent left specific instructions about the nature and type of burial then these wishes should control even against objections of family members. If there are no directions for burial left by the decedent then the surviving spouse or, if there is no surviving spouse, the next of kin has legal possession of the body for burial. If there is no surviving spouse and the next of kin are minors then the legal guardians of the minors would exercise the right to arrange for the burial. A thorough search of the decedent's personal effects should be made to determine whether any burial arrangements have been made, to attempt to locate any cemetery deed, and to determine whether a burial contract has already been entered into and paid for on a prepaid basis.

Anatomical Gifts

Massachusetts law provides for a person at least 18 years of age and of sound mind to donate part or all of his or her body for transplantation, scientific purposes, etc. 

Automobile Related Issues

The automobile that the decedent owned at the time of his death, provided that it is properly registered, continues to have a valid registration until the expiration date of the current registration period or until an executor is appointed and the vehicle is transferred or sold. 

The insurance that the decedent had in place on the automobile remains in full force and allows blood relatives of the decedent to drive the vehicle and be fully insured until the estate representative has been appointed. Once the estate representative has been appointed that person is the only person who may operate the vehicle and be fully insured. 

In instances where the automobile is registered in the decedent's name alone, Massachusetts provides for a simple process in which a surviving spouse may have the vehicle retitled in his or her name. For all intents and purposes Massachusetts is treating the solely registered and owned vehicle as though it were joint property. The surviving spouse would contact the Registry of Motor Vehicles and complete the necessary Surviving Spouse Affidavit and present a death certificate. The registration would then be issued in the name of the surviving spouse.

Small Estates

A Voluntary Probate, also known as a Voluntary Executor or a Voluntary Administration is a simplified form of Probate Administration, which can be used when the decedent had a small amount of assets in his or her name alone. The Massachusetts Probate Court system acknowledges that small estates do not need to be put through the same formalities as a large estate. For this reason, the Probate Court rules allows for an informal probate process to administer small estates. A small estate is defined as any estate in which the value of assets in the decedent's name alone does not exceed $15,000.00. This $15,000.00 limit does not include the value of an automobile.

What are the Legal Requirements?

The legal requirements for an estate to qualify for the informal voluntary probate process are as follows: 

The decedent must have lived in Massachusetts at the time of his or her death.

The decedent leaves behind an estate, which consists entirely of personal property (bank accounts, stocks, bonds, personal assets, etc.) in the decedent's name alone. Under no circumstances can any portion of this be comprised of real estate.

The value of all assets in the decedent's name, excluding the value of any automobile, cannot exceed $15,000.00.

At least 30 days must have passed from the date of the decedent's death and no formal probate process has been filed with any probate court since the time of the decedent's death.

If all of the above requirements exist, then the estate may be probated using an informal process. The benefit to the informal process is that the entire process can often be completed within two weeks, thereby eliminating the lengthy time delay that so often accompanies a normal Probate Administration.

Who May Serve as Voluntary Executor or Voluntary Administrator?

If all of the requirements are satisfied, a Petition can be filed requesting the appointment of a Voluntary Executor or Voluntary Administrator. If the decedent had a will at the time of his death, then the Executor named in the will would be the person who would petition to be named Voluntary Executor. If the decedent did not have a will, then there is a short list of people who are eligible to request that they be appointed Voluntary Administrator. The approved list of people is as follows: surviving spouse, child, grandchild, parent, brother/ sister, niece/nephew, aunt/uncle.

In each of these cases, as with anyone petitioning to be named in a fiduciary capacity in the Probate Court, only someone who has reached the legal age of 18 years of age may act in this capacity.

How do I File for Appointment?

To begin the process, the person who will be serving as the Voluntary Executor/ Administrator will complete the appropriate form, Form CJ-P7A (Voluntary Executor/ Executrix) or Form CJ-P7 (Voluntary Administration). (Completed forms follow as Form 1 and Form 2.) 

Once the Petition is completed, the person requesting to serve must sign the document in front of a notary who will also sign the document affixing his or her seal. The petition is then filed with the Probate Court of the County of the decedent's residence at the time of his or her death. The cost for filing a Voluntary Petition is fifty ($50.00) dollars, which includes the cost of a certified copy of the Petition once it is allowed. The Petition must be filed with a certified copy of the death certificate and the original will if one exists. In approximately a week, the Probate Court will sign the petition and return a copy to the person named as petitioner. The document returned by the Court will have an embossed Court seal evidencing the allowance of the Petition and the Appointment of the person named. With this court document, the named Petitioner can undertake actions on behalf of the decedent's estate.

As with any fiduciary named by the Probate Court, the named Executor/Administrator must first collect all assets and pay all priority expenses. Priority expenses are the expenses of the funeral and last illness of the decedent and expenses of the Probate Administration. Once those are paid, any other debts of the decedent should be paid with the balance of assets being distributed with the terms of the will or to the heirs of the decedent if there is no will.