Estate planning

Why isn’t estate planning just for the wealthy?


It is often said that the only certain things in life are death and taxes. But for many people, the two things align when it comes to estate planning, and the legal process for drafting wills and trusts. This week the Massachusetts Supreme Judicial Court hears several interesting oral arguments in cases involving estate planning. Daniel Meadowed, GBH Legal Analyst and Northeastern University Law Professor, has joined GBH morning edition Discusses the. This text has been lightly edited.

Paris Alston: First, I had no idea you did some tax and real estate work early in your career. Is this correct?

Daniel Midoid: correct. To this day, my wife sometimes introduces me as a candid tax attorney. It just so happened to be my late father’s practice area. It wasn’t really my cup of tea, but I really liked the idea of ​​helping families, in particular, go through the process and trying to reduce their desires to writing while they think about what happens after they die.

Alston: I’ll tell you a quick little story here. When I was about 10 or so, I wrote a will because – oh, I don’t know why. I didn’t think I wouldn’t be around at that point in my life. But I think I was saying, “I’m going to give all my journals to my brothers,” or something like that.

midwidth: sweet.

Alston: But, you know, a lot of times people might think that estate planning is for really rich people. And that you have to have a lot of money and assets for the estate tax to apply to you. Is this correct?

midwidth: not exactly. On the one hand, yes, federal law excludes a significant portion of a person’s assets from the federal estate tax. It is called the exemption amount. And in 2023, the exemption amount will be — get that — $13 million. Basically, $12.92 million is excluded from the federal estate tax. But on the other hand, the size of the federal exemption is currently set to diminish dramatically in coming years by about 50% by the end of 2025. Regardless of your federal estate tax liabilities, most or many of us in Massachusetts will be subject to a very onerous state tax when we die.

In Massachusetts, anyone who owns property over $1 million is subject to a graduated estate tax, ranging from just under 1% to 16%. So it could be a very big hit.

Regardless of one’s assets, even if taxes are not a concern at your death, I believe we all have an interest in dispersing and appropriating our prized possessions in a manner consistent with our values ​​and desires. Our diaries, our journals.

More morning edition

Alston: Since they have to go to the right person – you can’t give them to anyone.

midwidth: They have to be the right person, exactly. And so I believe that estate planning is not only the prerogative of the wealthy, but in fact it is something that belongs to all of us. And we must all have access to it.

Alston: So, Daniel told us what is happening in the Supreme Judicial Council.

midwidth: The (case) that first caught my attention is a really interesting case dealing with an issue that comes up a lot in Wills and Trusts, which is what if the clear language in the Will is less than clear? How do you explain certain terms? So in this case, in 2013, a 77-year-old woman executed her will and bequeathed all of her assets to her 15-year-old spaniel, Licorice.

Alston Oh, my God.

Medweed Yes – or for any other pets she may have at the time of her death. After her last remaining pet dies, it is called the Pet Crate. This is actually not uncommon. Upon the death of the last surviving pet, the trustees were supposed to allocate the remaining assets to a charity. The problem was that Licorice died before the owner. Licorice died in 2017. Her owner died in 2019. She died without animals, but she wasn’t broke.

So the issue is what should happen with her assets, and there was a bit of a fuss between her four heirs, and her four nieces and nephews. Basically, one of them thought that the money should go directly to a charitable foundation, which best matched her aunt’s wishes. The other three held that the money should pass through the so-called laws of illiteracy, as if their aunt had not had a will. And it became a big legal drama, basically, about what to do with that money.

Alston: Yeah, I mean, I’m not trying to be flippant here either, but I imagine some of them might have been thinking, well, why did you send him to pet first and not me? I don’t know. it’s not my business. Well, what happened there in the end?

midwidth: Well, it’s really interesting. So the trial judge looked at this and said, “Hey, that’s right, the will didn’t consider this situation. If in fact the executor, the testator, the person who wrote the will, died without a pet.” However, looking at the will as a whole, the judge believed that the real intent here was for the remainder of the charity, i.e. the remaining assets, to go to charity. Any money not used to purchase a pet should go to a charity. The judge cited a principle known as a longstanding rule of legal construction, known as the residue acceleration principle, which basically says you can accelerate or advance a residual interest in a trust in order to achieve the ideal of a will.

That’s a lot of canonical phrases, but the basic idea is let’s follow the spirit of this commandment rather than just its letter. We will see how this will be implemented in the Supreme Judicial Council.

Alston: I want to ask people who are wondering about this: Would it be better for them to go to someone to help them draft their will? Do I not write that in their diaries, do I take it?

midwidth: I probably won’t write in the journal. I guess it would make sense to get some legal advice because you want to avoid litigation like this, right? You want to make sure your intention is completely clear.


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