Estate Planning Fact Sheet

I. GENERAL INFORMATION

Date of Information:

File#:______________________________________________________________________________

Client Name:______________________________DOB:_________________ss#_________________

Spouse’s Name:_____________________________DOB:________________ss#_________________

Residence:_________________________________________________________________________

County:______________________________Telephone #____________________________________

Children

1. Name:_________________________________DOB:_________________ss#_________________

Address:_____________________________________________________________________

2. Name:_________________________________DOB:_________________ss#_________________

Address:_____________________________________________________________________

3. Name:_________________________________DOB:_________________ss#_________________

Address:_____________________________________________________________________

4. Name:_________________________________DOB:_________________ss#_________________

Address:_____________________________________________________________________

Client’s Parents:_____________________________________________________________________

Spouse’s Parents:____________________________________________________________________

Other Dependents

1. Name:_________________________________DOB:_________________ss#_________________

Address:_____________________________________________________________________

2. Name:_________________________________DOB:_________________ss#_________________

Address:_____________________________________________________________________

Client Occupation:___________________________________________________________________

Client Employer:____________________________________________________________________

Business Address:_________________________________Telephone #________________________

Spouse’s Occupation:_________________________________________________________________

Spouse’s Employer:__________________________________________________________________

Business Address:_________________________________Telephone #________________________

Prior Marriage(s):____________________________________________________________________

Accountant/Tax Preparer:_____________________________________________________________

Address:_________________________________________Telephone #________________________

Other Advisor(s):____________________________________________________________________

Name:_____________________________________________Business:________________________

Safe Deposit Box Location:_____________________________________Box #__________________

Access By Whom:___________________________________________________________________

II. ASSETS

A. Bank Accounts

Bank Account No. Type Balance Title Holders

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

B. Stocks/Bonds

Company # Shares Type Value Title Holder

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

C. Real Estate (Please include personal residence, vacation home or investment property)

Location Type Value Title/Interest

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

D. Life Insurance

Company Policy No. Beneficiary Type Amount

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

E. Retirement Benefits

Company Type Amount Tit/e/Beneficiary

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

F. Business Interest

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

G. Income

Employer Position Salary Other Benefits

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

H. Other Salaries/Income

Income Source Annual Income

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

I. Miscellaneous Assets

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

III. LIABILITIES

A. Mortgages/Loans

Mortgages/Loans Account # Secured/Unsecured Amount Outstanding Due Date

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

B. Other Debts/Liabilities

Name Amount Outstanding Due Date

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

C. Miscellaneous

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

IV. FIDUCIARY APPOINTMENTS

A. Executor

An executor is a person nominated by a testator/testatrix (the maker of a will) to carry out the directions and requests in the testator’s/testatrix’s will upon his/her death. Such an appointee should have some of the following characteristics:

1. The trust and confidence of the testator and the estate’s beneficence.
2. Understanding the needs of the estate beneficiaries.
3. Knowledge in financial matters
4. Willingness to comprehend and work within the probate process
5. Attention to detail
6. Adherence to time constraints
7. Availability -likelihood prospective executor will survive the death of testator and make himself/herself available to timely and thoroughly complete his/her duties.

Client:

Executor
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Executor
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Spouse:

Executor
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Executor
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

B. Trustee

In the event your estate plan requires the use of a trust~ trustees must be designated. A trustee is a person who holds property for someone else’s benefit. The characteristics of a good trustee are similar to those listed for an executor. However, where an executor’s role will typically last from one – two years, a trustee may serve for as long as 50 – 75 years. The potential long duration of a trust appointment often results in a client’s consideration of a professional fiduciary – i.e. a bank. Please note that a professional fiduciary naturally charges for its services.

Client:

Trustee
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Trustee
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Spouse: (In the event each spouse has his/her own trust)

Trustee
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Trustee
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

C. Durable Power of Attorney

The Durable Power of Attorney is an instrument authorizing an "attorney in fact" to represent you in your financial affairs. This appointee should be both trustworthy and financially capable.

Client:

Attorney in Fact
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Attorney in Fact
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Spouse:

Attorney in Fact
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Attorney in Fact
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

D. Guardian (of yourself)

Though the existence of Durable Power of Attorney typically avoids the need of a guardianship appointment, it is advisable and possible to nominate your own future guardian inside the Durable Power of Attorney instrument. A guardian is a person lawfully invested with the power and charged with the duty of taking care of a person and managing the property and rights of such person. who. for defect of age. understanding. or self-control is considered incapable of administering his/her own affairs. A keen understanding of both the person and the finances of the individual whose control the guardian is charged with are essential elements to be considered in making this fiduciary appointment.

Client:

Guardian
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Guardian
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Spouse:

Guardian
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Guardian

Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

E. Guardian of Minor or Physically/Mentally Challenged Children

Under Massachusetts General Law, Chapter 201, Section 3, a father or mother may through their Will appoint a guardian for a minor child, whether born before the time of making the Will or afterward, to continue guardianship during the minority or the child. The guardian may be appointed to guard the person and/or the property of the child. If a trust is set up for the management of the child’s property, the primary responsibility of the guardian is the physical and emotional well-being of the child. Therefore, the guardian of the minor should be selected with a careful eye towards the following:

1. marital status of the guardian
2. experience and/or success at parenting his/her own children temperament
3. religious and/or societal beliefs
4. physical well-being-likelihood to survive child’s parents willingness to serve as guardian
5. existing relationship with child
6. financial security

Client and Spouse:

(It is problematic for parents to select different guardians. Therefore, it is strongly recommended they make the same appointment.)

Guardian
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Guardian
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

F. Health Care Proxy

The Health Care Proxy is an instrument which authorizes another person ("Health Care Agent") to make medical decisions for you when you are incapacitated. The Health Care Agent should be someone whose judgement you trust absolutely.

Client:

Health Care Agent
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Health Care Agent
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Spouse:

Health Care Agent
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

Successor Health Care Agent
Name:_________________________________________________Telephone:___________________
City & State of Residence:_____________________________________________________________

V. OTHER INFORMATION

It is helpful. wherever practical. to provide copies of the following listed items:

1. Present Wills
2. Copies of Life Insurance Policies
3. Employee benefit plan descriptions
4. Business buy-sell agreements
5. Divorce Decrees and property settlements
6. Trust Documents – whether created by you or of which you have a vested benefit
7. Gift tax returns
8. Deeds to Real Estate
9. Bank Account Documentation

WILL

The most common and well-known estate planning device is a Will. The Will is a written instrument by which a person (testator/testatrix) is able to distribute his or her assets upon death. During the testator’s/testatrix’s life the Will is not operative and may be changed or revoked at any time by the testator/testatrix. However, upon the testator’s/testatrix’s death the Will becomes operative and will direct which assets go to which beneficiaries. The manner in which property is held during the testator’s/testatrix’s lifetime, however, will have a bearing on whether it will pass under the Will. Property held jointly as joint tenants and property held as tenants by the entirety will not be distributed under the terms of the Will. If property is held jointly, it will pass automatically to the surviving joint owner or owners upon the death of the other joint owner. If property is held as tenants by the entirety, the property will pass automatically to the surviving spouse. However, assets which are not held jointly can be distributed under the terms of the Will.

The most important benefit of creating a Will is that the testator/testatrix is able to direct the distribution of his/her estate upon his/her death in whatever manner he or she desires. Absent a Will, a person’s assets will be distributed according to the intestacy laws of Massachusetts. In that case, assets would pass to the heirs and spouse of the decedent in a manner and amount determined by statute instead of according to the wishes of the decedent.

In order for a Will to be valid, the testator/testatrix must have the intention to make the particular instrument his or her Will and must have the requisite mental capacity. For a formally attested Will (the usual kind) to be valid in Massachusetts, the following requirements must be met:

1. The testator/testatrix must be at least eighteen years old.

2. The Will must be in writing.

3. The Will must be signed by the testator/testatrix or someone else must sign for him/her in his/her presence and at his/her direction.

4. The testator/testatrix must sign in the presence of two attesting witnesses.

5. The witnesses must sign the Will in the presence of the testator/testatrix.

TRUSTS

A Trust is a fiduciary relationship with respect to property in which one person, the trustee, holds legal title to trust property subject to enforceable rights in another, the beneficiary. It is basically a device whereby one or more persons manage the property for the benefit of others, including, for example, the creator’s spouse or children. The trustee ordinarily has legal title to the property, while the beneficiaries have equitable title. There are two common types of Trusts, revocable and irrevocable. In a Revocable Trust, the creator of the Trust may revoke, alter or amend the terms of the Trust Agreement. On the other hand, the terms of the Irrevocable Trust may not be altered or amended and the Trust, itself, may not be revoked. Whatever the form of the Trust, it is a private covenant for the management and disposition of property both during the creator’s life and after his or her death.

One of the most important and desirable features of a Trust is privacy. The Trust Agreement is not available for inspection by the general public as is a Will after it is filed for probate. The public will not be able to find out how much was dealt with or to whom the Trust property went. Privacy could be useful if there is a good deal of money in a family that wishes to maintain a low profile. Privacy can also be appropriate if the creator wishes to do something with respect to the disposition of his or her assets that is unusual or embarrassing to the creator’s family.

Another important feature of a Trust, if it is funded during the creator’s lifetime is that it will reduce probate expenses. Assets put into a Trust during lifetime do not become part of a person’s probate estate upon their death. These assets would pass to beneficiaries under the terms of the trust agreement without the need of probate and its inherent costs. In addition to the saving of probate expenses, the use of a Trust to distribute assets upon death also reduces the time it would take for the beneficiaries to receive the assets. The probate process can take several months while the trustee under a Trust can distribute the assets almost immediately.

LIFE INSURANCE TRUST

The Irrevocable Insurance Trust has as a principal purpose, the avoidance of estate taxation on the proceeds of life insurance. It can be drafted in such a way that the trust assets, including policy proceeds, will be excluded from both the estate of the insured and the estate of the insured’s spouse. This can be accomplished even though the spouse of the insured benefits from the trust assets while alive. This advantage would not be available if the insured or the spouse owned the life insurance policy. The popularity of this type of trust is due additionally to the relatively low gift tax cost of life insurance and the flexibility which the trust format can provide. This type of trust has become a very important estate planning tool for use in solving a variety of estate planning problems (e.g., estate liquidity, providing income for minor or disabled children, etc.).

The irrevocable insurance trust is typically established by the insured when the insured either irrevocably assigns to the trust an existing life insurance policy on his or her life or "purchases" a new life insurance policy with the trust as the initial applicant and owner. Irrevocable Insurance Trusts are categorized as follows:

1. FUNDED – This trust is one where the grantor, at the trust’s inception, either irrevocably assigns to the trust both an existing insurance policy and the assets sufficient to fund the premium payments required to maintain the policy, or transfers to the trust the assets sufficient to both purchase a new insurance policy and make the premium payments required to maintain the policy.

2. UNFUNDED – This trust is one where the grantor, at the trust’s inception, assigns only the insurance policy (or the funds necessary to purchase the policy). The funds necessary to pay the premiums are transferred in future years as premiums come due.

While the irrevocable insurance trust has much merit, it is not without its drawbacks. The primary disadvantage is the grantor’s loss of control over the policy, including loss of the right to borrow against or make use of the policy’s cash surrender value. Another disadvantage is that the trust is irrevocable. Once the grantor establishes the trust, he or she gives up the power to make changes. The trust will need to be irrevocable in order to obtain the desired estate tax savings

DURABLE POWER OF ATTORNEY

A Power of Attorney is a written instrument by which one person, as principal, appoints another as his or her agent (attorney-in-fact) and confers upon that agent the authority to act in place of the principal for the purposes stated in the instrument. An ordinary (non-durable) power of attorney terminates upon the incapacity as well as the death of the principal. Unlike an ordinary power of attorney, a Durable Power of Attorney is effective notwithstanding the disability or incompetency of the principal. The Durable Power of Attorney permits the principal to exercise full control over his or her affairs until such time as incapacity occurs. Once incapacity or disability occurs the attorney-in-fact exercises those powers granted him by the signed instrument. Attorneys-in-fact are commonly authorized to handle all ordinary aspects of the following matters for a principal:

1. Real Estate and tangible personal property
2. Securities and bank accounts
3. Taxes
4. Retirement plans, insurance policies, and their benefit
5. Litigation on behalf of the principal
6. Management of the personal affairs of the principal, maintaining the customary standard of living of the family

One of the main benefits of this type of arrangement is that the principal is free to select his or her own agent rather than to be forced to rely on the judgment of a court to make the selection in a guardianship proceeding. Using a durable power also avoids the costs associated with court proceedings.

Creating a Durable Power of Attorney is relatively simple. The power must meet several requirements.

1. It must be in writing
2. It must contain the words, “this Power of Attorney shall not be affected by the subsequent disability or incapacity of the principal” or “this Power of Attorney shall become effective upon the disability or incapacity of the principal.”
3. The principal must have legal capacity to make the appointment at the time the power is created.
4. As for termination, the Power of Attorney terminates when it is revoked by the principal, upon the death of the principal, or when it expires according to its own terms.

HEALTH CARE PROXY

This document works much the same way as does a Power of Attorney. The proxy designates someone to direct your medical care in the event you are unable to do so yourself. The person designated proxy holder is directed to see that the terms of any living will are respected. The Health Care Proxy must be in writing and signed by the principal in the presence of two other adults who must sign as witnesses. The witnesses must affirm in writing that the principal appeared to be at least eighteen years of age of sound mind and under no constraint or undue influence. The proxy itself must:

1. Identify the principal and the health care agent
2. Indicate that the principal intends the agent to have the health care authority
3. Describe the limitation, if any, that the principal intends to impose upon the agent’s authority
4. Indicate that the agent’s authority is effective upon the incapacity of the principal.

The health care agent has authority to make any and all health care decisions on the principal’s behalf that the principal could make, including decisions about life-sustaining treatment, subject, however, to any expense limitations in the proxy. The determination that a principal lacks the capacity to make his or her own health care decisions is made by the attending physician and will be in writing. Once the agent reviews that determination, his or her authority commences.

The principal may revoke a Health Care Proxy by notifying the agent or a health care provider orally or in writing or by any other act evidencing a specific intent to revoke the proxy. The proxy is also revoked upon the execution by the principal of a subsequent proxy or on the divorce or legal separation of the principal and his spouse where the spouse is the health care agent.

DECLARATION OF HOMESTEAD

Under Massachusetts law, an estate in homestead to the extent of $500,000.00, including for defined elderly or disabled persons, of a home occupied as a principal residence may be acquired by its owner. The homestead may be declared in the original deed or may be declared in a separate document which is recorded at the registry of deeds. The statute creating the homestead provides that an owner includes a sole owner joint tenant by the entirety or tenant in common. Additionally, only one owner may acquire an estate of homestead for the benefit of his family and that said homestead may be acquired on only one principal residence.

This Declaration of Homestead allows a homeowner to shield up to $500,000.00 of the owner’s equity in the principal residence from the claims of certain creditors, thereby discouraging or preventing attempts by certain creditors to seize and force a sale of the home to satisfy a debt. The estate of homestead is exempt from attachment or levy on execution and from the laws of conveyance, descent, devise and sale for payment of debts or legacies except for the sale for non-payment of taxes, for a debt contracted prior to the acquisition of .the homestead, for a debt contracted for the purchase of the owner’s principal residence and for the enforcement of child support payments.

However, liens imposed as a result of the payment of Mass Health benefits or assistance, are exempt from the Homestead protection. Upon a Mass Health member’s death, the Commonwealth may file a claim for reimbursement from the member’s probate estate. The rules and regulations regarding Mass Health benefits and assistance are complicated and constantly changing.

LIVING WILL

A living will state the signer’s intent that extraordinary measures not be used to sustain his or her life if there is no chance of returning to health. Such a document is not authorized by statute in the Commonwealth of Massachusetts. However, a living will declaration can provide valuable evidence of an individual’s intent if he or she cannot speak or refuse medical treatment. Without a living will declaration, a court would be forced to determine an incompetent terminally ill patient’s wishes regarding the provision or withholding of life-prolonging treatment.

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