Holiday Conversations: Do You Have an Estate Plan? – Massachusetts

By Nikki Marie Oliveira

You have probably heard it before.  Sitting at the coffee shop.  At a business meeting with a colleague.  Eating dinner and celebrating the holidays with your family and friends.

“Do you have a will?”

“Do you have a trust?”

“Who did your estate plan?”

 These questions undoubtedly sound familiar, but perhaps the answers are a bit cloudy.  Other topics that tend to join hand-in-hand with these bits of curious conversation pieces are: avoiding probate; choosing a guardian for your children; designating someone to make your health care and financial decisions should you become incapacitated; and protecting your legacy for your beneficiaries from creditors.

Some of these subjects may seem to be feeding a lot of estate planning “hype,” while others are extremely important when it comes to planning for the inevitable.  Perhaps you have no interest in estate planning because you figure you will be long gone.  However, taking simple planning steps will not only make it easier for your family and friends when you are gone, but will also pass on your memory.

While many people ponder drafting a will, what they would leave for whom, and the often seemingly distant circumstance of what would happen “if” they die, it is necessary to put a plan into action.  The primary reason it is important to plan your estate is to prepare for the unexpected.  We cannot predict the future or what will happen to us on any given day, but we can be ready for all that life throws our way with a carefully crafted estate plan.  Having an estate plan in place will give you peace of mind knowing that your family members will be well-taken care of and your belongings will end up in the hands of those you choose when you are gone.

Will-Based Planning

First and foremost, a will is a legal document drafted by a lawyer that allows you to designate where your property will go upon your death, as well as other important issues.  A will can also establish who will be appointed guardian of your children should something happen to you.  Along with your will, additional documents will control who will make healthcare and financial decisions in the event you unexpectedly become incapacitated or disabled.

While a will and accompanying documents might be exactly what is needed to plan your estate, there are a few possible shortcomings that you should be aware of.  A will must be probated in the court system, which exposes your loved ones to the often despised public probate process.  However, depending on your particular situation, probate may not be as wicked as is rumored.  The most common complaints are the public nature, delay and cost.

Trust-Based Planning

Trusts are often more foreign or complicated to understand than wills.  However, they provide a world of more opportunities and protection than a common will.  The three most important motives for having a trust are: (1) avoiding probate; (2) creditor protection; and (3) privacy.  A trust, as a private document, does not have to go through the probate process and so there is less of a delay with the distribution of your assets.  Additionally, a trust can be drafted with creditor protection mechanisms to prevent your beneficiaries from having their inheritance compromised.  Lastly, unlike a will, a trust is not a public document, so your net worth and your decisions for who you will benefit will remain private.

Now that you know the basics, you’ll be able to participate in the holiday discussion when it turns to estate planning.

Nikki Marie Oliviera is an attorney and the first Margolis & Bloom estate planning intern.

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