For more commonly asked questions and answers check out our Q&A Series blog here.
What and how do you charge?
Every client is different. We try to adapt that plan to that client and [his or her] family and [his or her] assets and [his or her] circumstances, but one of the things that we do a little differently is that we don't bill hourly for the estate planning. We find clients like that better because with hourly you don't know what the bill is going to be until the plan is done.
[At other firms,] you call with questions and you get a bill in the mail for a phone call and it kind of discourages people from calling their attorney.
So what we do is we bill by flat-fee. We look at a situation and—once we have a handle on the overall big picture—we make some recommendations: Here's what we think you should do; here's what it would cost. It's a "yes" or "no" to get started. [The price] doesn't change, and there are no surprises.
How do you charge? from Surprenant & Beneski on Vimeo.
Since our legal services are personalized for each client, it’s only after we have a feel for your needs that we can determine what level of planning, and therefore what fee level, best fits you. Unlike traditional estate planning attorneys, who charge by the hour, we charge flat fees—that way there are never any surprise bills even if you need extra time or attention. Our goal is not to charge clients for every minute that we spend with them. Our goals are to put a plan together that’s tailored for you and your family, and to walk you through an easy, smooth, comfortable process. Since your goal is likely to protect your whole family wealth, our services are truly an investment, not a cost. Click Here to see our 3 levels of planning.
Should I choose an attorney who is in my area?
You don't absolutely need to choose one in your area, but it's better. The reason is, you want someone who is geographically close enough that you can see them every once in a while to make sure your plan's still working for you. We have offices in New Bedford, Hyannis, and Easton/Brockton. [We] serve clients all over those areas and we try to keep up on their plans.
We offer a free three-year review, invite clients in every three years to make sure their plan's still working for them. So, we don't want to have them drive halfway across the state or the country to do that. So, it is better if you're close.
Should I choose an attorney in my area? from Surprenant & Beneski on Vimeo.
It’s not absolutely necessary, but it is ideal. The biggest reason is that you can meet with them face to face. Creating an estate plan isn’t a one-time transaction. Because your plan needs on-going maintenance, you should choose an attorney that you can establish a long-term relationship with. Someone you like, who will get to know you and who will be a trusted advisor for you and your loved ones in times of need.
What is a trust?
A trust essentially is an agreement between two people to hold money for the benefit of someone else—for the benefit of a beneficiary. So it's a document, a legal document.
We use the analogy that it's like a basket, and in most cases the trust isn't working for you unless you actually place some of your assets into the basket. We call that "funding the trust."
And there's just a wide range of different types of trusts. There are revocable trusts and irrevocable trusts. People do trusts for different reasons and therefore, we draft them differently. People do trusts to avoid probate; to wipe out or minimize estate tax; to protect assets from the cost of long-term care; to protect the assets from their children’s creditors, or divorce; or for special needs children and special needs planning.
But it's essentially an agreement between the grantor, the person who puts money into the trust; and the trustee, the person who is going to hold the money—and in some cases [the grantor and the trustee] can be the same person—and the beneficiary, the [person] who [is] going to ultimately get the money.
It's essentially an agreement.
What is a trust? from Surprenant & Beneski on Vimeo.
A trust is a very powerful estate planning tool that can help avoid the time and expense of a court supervised probate, provide estate tax planning, and in some circumstances, protect assets from lawsuits and divorce. A trust is a legal arrangement memorialized by a legal document containing instructions and guidance on how it works. Since a trust is nothing more than a collection of words on paper, it needs a person to actually carry out its instructions. This person is called the Trustee and they are charged with managing the trust assets for the beneficiary and following the trust’s instructions for allowing the beneficiary access to or use of the assets. The beneficiary is the person who is entitled to use or receive the trust assets.
Trusts come in two varieties – revocable and irrevocable. The revocable trust is the cornerstone of many foundational estate plans, while the irrevocable trust is used for more advanced planning such as Medicaid Planning or Estate Tax Planning. A well-drafted revocable trust allows the trustmaker (also called the Trustor, Settlor, or Grantor) to hand-pick the Trustee who will manage the trust assets for the trustmaker if the trustmaker becomes incapacitated.
How do I know if I should work with a lawyer?
Well, it really depends on what you're planning for. [Parents] with minor children are going to want to do some planning to make sure that they set up the guardians and conservators of their children if something happens to them, to make sure the children are never taken into protective custody, and to make sure the next caretaker has some guidance into how they'd like the child to be raised.
People without minor children start planning to eliminate or minimize their estate tax. So, that one sort of depends on the size of your estate and the exemptions at the time. Some people start planning to avoid probate—which can be done at any time—or to protect assets for their children.
Some people start planning to protect assets from the cost of long-term care. That one, in most cases, you need to start it five years before you need the long-term care. So the difficulty there is we never know when we're going to need the long-term care. So, most people start thinking about that at around age sixty.
When should I start planning? from Surprenant & Beneski on Vimeo.
You would benefit from working with a lawyer if:
- You own more than just personal belongings, such as cars, clothing, jewelry or furnishings.
- You want to ensure that the people you love will have a trusted advisor to turn to when you are gone.
- You want to avoid probate or estate taxes or protect your children’s inheritance.
- You want to guarantee your plan will work when your family needs it.
Should I work with a Personal Family Lawyer™?
If you decide that you would benefit from working with a lawyer, your next decision is what kind of lawyer? – a traditional estate planning lawyer or a Personal Family Lawyer™? Depending on what you decide, the experience will be very different.
A traditional experience often goes something like this: You meet with a lawyer who makes things seem complicated or confusing. The lawyer prepares your documents for you. You sign them and put the binder on a shelf at home. While the documents probably will help your estate avoid probate and estate taxes, it likely leaves assets unprotected and doesn’t adequately protect your kids. If you need to ask questions or decide your plan needs changing, it will be done at an hourly rate.
A Personal Family Lawyer™ works more like this: You create a long-term relationship with your attorney who can provide a lifetime of guidance for you and your loved ones. Your attorney gets to know you, your needs, goals and values and creates a plan with you that is tailored just for you. The plan ensures your children will be taken care of in the best way possible, and that they’ll receive whole family wealth, including your financial, human, intellectual and spiritual assets. You’ll always be able to ask questions and make changes quickly and easily to your plan, and fees are on a flat-fee basis, so there are never any surprises.
Legal Disclaimer: The legal information presented on this web site is general in nature and applies only to matters governed by the laws of the Commonwealth of Massachusetts. Nothing on this web site is intended to be or may be construed to be legal advice. No attorney client relationship will exist with Surprenant & Beneski, P.C.. unless we so agree in writing after personal consultation. Please contact us for a consultation on your particular legal matter. This web site is not intended to and does not solicit clients for representation in matters outside of the Commonwealth of Massachusetts.
What are the basic estate planning documents?
Well, there are really five basic estate planning documents that everyone should have to protect [him or herself]. I'll just list them first. They are the Will, or the Last Will and Testament; the Durable Power of Attorney, number two; number three is the Health Care Proxy; number four is the Living Will; and number five is a HIPAA Release.
And just to briefly go through them one by one: Everyone knows what a Will is. That's the document that divides your assets up when you pass, and the probate court process. You should keep an eye on what's going through your Will and what's not. Some people have a fantastic Will that says, "My property goes to my five children equally after my spouse," and they don't realize that, because of the way it's titled or the beneficiary designations, that all the property is actually going to the oldest son, or someone that they've named.
So, it's important to look at that and make sure if you want things to go through your Will, they're going through your Will.
The second document is the [Durable] Power of Attorney, and that is you naming who you want to make legal and financial decisions for you if you can't make them for yourself. So you haven't passed, but you have Alzheimer's, or dementia, or stroke, or heart attack. You always want to have a backup to your original person, in case you are in the same car accident.
And the Health Care Proxy, very similar, you're naming who you want to make medical decisions for you if you can't make them for yourself.
The fourth document is the Living Will and that is just guidance to your kids, or whoever is going to be making your medical decisions. It's a nice gift to the family, for them to able to look at a document and say, "Here's what Mom wants me to do," or "Here's what dad wants me to do," and to show the other siblings, to try to keep the family harmony when those very difficult decisions are being made.
And the last of the five basic documents is the HIPAA Release, that's the Health Insurance Portability and Accountability Act. It's a privacy law that makes it so doctors and hospitals can't release your information without your permission. Sometimes you're going to want your wife or your kids to be able to call the doctor or the hospital and discuss your care, or call the ambulance billing company, or call Blue Cross Blue Shield or whoever your health insurance provider is. And the HIPPA release, put together now while you have mental capacity, will allow them to do that.
SAQs (Seldomly Asked Questions)
Intro Video for SAQs
Is it best to leave assets to one person with the understanding that they will divide those assets among the others?
Generally, no. It's not that your child is not going to do what you want them to do, or is dishonest, or is going to change the plan—although we see that occasionally. It's more that things can happen to derail that informal plan. Now, we have some people who come in and say, "I have my oldest son joint on all of my bank accounts." So the oldest son is going to get everything and Mom assumes that he's going to split it up with his siblings after Mom passes—and he may.
But there are things that can derail that. Like if he's in a divorce; or he gets into a car accident and has a creditor; or passes and those assets immediately go to his wife or his children through his Will or estate plan and we lose them. And that's not a place that Mom intended [the assets] to go.
One example is in the context of special needs. We see families a lot of times [that] will say, "I have a special needs child. I don't want to leave assets to him or her directly. It may knock them off their needs-based benefits. So I'm going to leave them to oldest son or daughter, the 'good' child, and he or she will take care of my special needs child."
And that may work, but it may be complicated, as we've discussed. The better way to do that is to leave those assets for the special needs child in a Special Needs Trust, and name the other child as the trustee—in charge of the purse strings. That way, if something happens to the trustee—to the oldest child let's say, if they get a divorce; or a car accident; or a failed business; or credit card debt; or they pass away—there's a successor trustee. Someone else steps in and takes the reins, and the plan continues, to make sure that they stay on their benefits and you don't need to disinherit that child.
Have the Obama taxes of 2010 protected me from estate tax?
Maybe not. The new Obama tax law changes passed in December of 2010 expand the federal estate tax exemption to $5 million per person. And with spouses, it's portable; meaning if you do it right, you can use both exemptions. So effectively $10 million of federal estate tax exemption. The difficulty is that law is scheduled to sunset as of January 1, 2013, and go back to a $1 million federal estate tax exemption at a 55% rate.
So people need to keep an eye on that, and it may change several times in their lifetime. We don't know where it's going to go; it depends on who's in the White House and who's in Congress. So, you want your estate plan to be flexible, and to expand and contract with whatever the federal estate tax exemption is.
And for those of us in Massachusetts, we also have to keep an eye on the Massachusetts estate tax. That exemption is a million dollars, and if your estate is over that, you're going to pay—your estate is going to pay—a state tax. So we need to keep an eye on both the federal and the Massachusetts exemptions.
Will gifting assets to my children affect my Medicaid?
We have to be very careful with gifts. Not just because of the gift tax rules, but also because—in Massachusetts—of the MassHealth rules, or the Medicaid rules. One of the things that my office does is [it tries] to protect the assets in the event of long-term care. And sometimes we're trying to access Medicaid or MassHealth, and their rules are that if you make gifts within five years of applying for Medicaid or MassHealth, you are going to be penalized.
In other words, they'll set a period of time where they won't pay for your stay, depending on the size of the gift. The problem is, we don't know when we're going to need long-term care. So for gifts, if you can get through the five-year clock, you're okay.
We generally don't recommend that you make outright gifts to your children. We'd rather see those assets gifted—if they are to be gifted at all—in a particular type of trust.
Is the death benefit of my life insurance a part of my taxable estate?
Yes, it is. A lot of people don't realize when they're looking at the size of their estate—for estate tax purposes—that the death benefit on your life insurance is a part of your taxable estate. So if you have a life insurance policy that pays half a million dollars to your spouse, that amount of money is within your taxable estate.
In other words, the federal government and the Massachusetts government is going to count that when they are determining your tax—unlike MassHealth, which will look at the cash value. So you want to look at your assets closely and make sure we have an accurate picture of what your taxable estate—versus what your countable assets are—for Medicaid planning.