Planning for Life

The All-Too-Common Misuse of Nominee Realty Trusts, and the Consequences

Posted by Harry S. Margolis on October 12, 2021

By Harry S. Margolis

Masshealth-estate-recovery-attorney-Wellesley-MA-02481

In a prior post we discussed the problem of missing schedules of beneficiaries on nominee realty trusts. Now we'll discuss their all-to-common misuse.

As we have explained in that post, nominee realty trusts are excellent vehicles for holding real estate among several owners and for keeping the true ownership private. While they're called "trusts," they're really more of an agency agreement. The trustees manage the property for and at the direction of the beneficiaries who are listed on a separate schedule which is not recorded at the registry of deeds.

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Egg on My Face: Misunderstanding the Massachusetts Estate Tax

Posted by Harry S. Margolis on October 5, 2021

By Harry S. Margolis

Massachusetts-estate-tax-planning-margolis-and-bloomI've written extensively about the Massachusetts estate tax, helped many clients both plan to avoid or minimize and prepared many estate tax returns and even been cited in a recent editorial about the tax in The Boston Globe. Yet there's a fundamental feature of the tax that I never understood.

Here's what The Globe said:

Once an estate reaches the taxation threshold, Massachusetts has this unusual (and compared with other estate-tax states, regressive) feature: The tax isn’t assessed just on the value above $1 million. Rather, after a $40,000 exemption, the levy applies to the entire value of the remaining estate. (Oregon, contrariwise, only taxes the value of an estate in excess of $1 million.)

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Topics: Massachusetts estate tax

Chalk Up Another Loss to MassHealth

Posted by Harry S. Margolis on September 28, 2021

By Harry S. Margolis

MassHealth-Margolis-Bloom-Legal-Wellesley

In a case, Estate of Sotirios A. Koutoukis, et al., v. Secretary of the Executive Office of Health and Human Services (Mass. Land Court No. 20 MISC 000004 (RBF), September 17, 2021), involving an effort to reform a scrivener's error in a life estate deed, the Massachusetts Land Court rejects MassHealth's opposition saying that MassHealth "cannot create a dispute of material fact simply by declaring it disputes a material fact." It must "provide some evidence that disputes the fact" which it failed to do in this case.

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Topics: MassHealth, MassHealth lien, life estate, estate recovery

Work Longer, Live Longer

Posted by Harry S. Margolis on September 22, 2021

By Harry S. Margolis

Retirement-margolis-bloom-d'agostino-estate planning

We've talked before about the financial benefits of working longer. They're pretty straightforward: the longer you work, the more money you can set aside for retirement and the fewer years you'll be drawing down your retirement income.

By way of example, for someone who can expect to live to age 85, if she retires at age 65 she'll be living off of her retirement savings for 20 years; if she retires at age 70, she'll have five more years to sock away money and will be drawing down her savings for just 15 years. (Of perhaps of even more importance, especially if she lives to 95 instead of 85, is the substantial increase in her Social Security benefit if she begins receiving it at age 70 instead of 65.)

Now comes a study that suggests that continued work can also enhance longevity. This has always been hard to establish because of the link between health and work. People who are healthier are both likely to work longer and live longer. It's impossible in the real world to do a standard research study of randomly assigning people to two groups, one group that retires early and one that retires late, and then study their health outcomes.

Real World Social Science Experiment

But sometimes the real world offers opportunities for researchers that they can't create on their own. This recently happened in the Netherlands which from 2009 to 2013 offered a tax credit to encourage citizens between the ages of 62 and 65 to keep working. This made it possible for social scientists to compare the work rates of people and longevity of Dutch men in this age cohort both before the tax incentive was offered and afterwards.

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Topics: Retirement Planning

Long-Term Care Takes a Family -- Massachusetts

Posted by Harry S. Margolis on August 31, 2021

By Harry S. Margolis
Margolis-Bloom-Long-term-care-planning-wellesley-ma
When an older family member needs assistance, providing the needed care can become a full-time job. Family members may need to take over his or her finances, health care, transportation and supervising care providers, as well as providing hands-on care or meals. These needs will likely change over time and sometimes with no advance notice.
 
If you're fortunate, you'll have help from siblings or other family members. In planning for who will do what, it can help to have a list of possible tasks you may have to take on. So here one is:
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Topics: family caregiver agreement, caregiving, family caregiving

6 Reasons to Keep the Massachusetts Estate Tax

Posted by Harry S. Margolis on August 27, 2021

alexander-mils-lCPhGxs7pww-unsplashBy Harry S. Margolis

The Boston Globe yesterday published an editorial (in which I'm cited) calling for reform of the Massachusetts estate tax, arguing that because we have the nation's lowest estate tax threshold of $1 million, shared only with the state of Oregon, we are out of step with the rest of the country and especially other states in New England. They also argue that with median housing prices reaching $811,000 in the Boston area, that even estates of middle-income residents are subject to the Massachusetts estate tax and that they should not be.

Reasons We Should Keep the Estate Tax

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Topics: estate taxes, Massachusetts estate tax

How to Protect a Child's Inheritance from Divorce in Massachusetts

Posted by Harry S. Margolis on August 24, 2021

By Harry S. Margolis

family-protection-trusts-margolis-bloom-estate-planningParents are often concerned about whether the inheritance they leave their children will stay in the family in the event a child is divorced or passes away. Typically for long-term marriages, in the event of divorce, all assets are split down the middle no matter their source.

Divorce or Remarriage Can Disinherit Children and Grandchildren

For example,

Bob and Jane marry, embark on a life together and have children. Years later, Jane's parents die and she inherits a nest egg of $500,000. After the children leave home, Bob and Jane decide that they'd be much happier going their separate ways and divorce. In all likelihood, half of Jane's nest egg will go to Bob. 

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Topics: divorce, creditor protection, family protection trust

Get Your S*** Together Estate Planning Site

Posted by Harry S. Margolis on August 19, 2021

By Harry S. Margolis
 

I called my estate planning book Get Your Ducks in a Row. Chanel Reynolds, a young mother in Seattle whose husband died in a bicycle accident, is much more direct. Her website on estate planning is called GetYourShitTogether.org.

On top of her grief when her husband died, Ms. Reynolds was panicked about how she was going to take care of and raise her daughters and things as simple as how to access financial accounts on line.  If she and her husband had taken a few relatively simple and cost-effective steps in advance, it would have saved her a tremendous amount of time and stress when her husband died.

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Topics: Estate Planning, durable power of attorney, will

4 Reasons Why You Probably Don't Want an ILIT

Posted by Harry S. Margolis on August 12, 2021

By Harry S. Margolis

life insurance-margolis-bloom-estate-planning-wellesleyThe irrevocable life insurance trust or "ILIT" has long been a mainstay of estate tax planning. It allows the taxpayer to shelter life insurance proceeds from the estate tax by removing them from her taxable estate. It has become much less commonly used as the federal estate tax threshold has moved up to $11.7 million, but will be of interest to more people as we get closer to 2026 when the threshold is slated to be cut in half. And, of course, the threshold is just $1 million in Massachusetts.

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Topics: irrevocable trust, life insurance

SJC Grants Conservators Quasi-Judicial Immunity, to an Extent

Posted by Harry S. Margolis on August 6, 2021

By Harry S. Margolis

SJC-conservatorship-guardian-home-care-Wellesley-MA-02461

In a case that exemplifies the rule that "no good deed goes unpunished," the Massachusetts Supreme Judicial Court has granted conservators quasi-judicial immunity for their actions as conservators. This protects them from personal liability when they act within the scope of their appointment.

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Topics: guardianship, conservatorship

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