A nice day today, eh?
Why people do estate planning
You NAME a person to handle things
Your assets don't automatically jump from your (dead) name to another person. A person is almost always needed to assist. If you die having signed a will, your will contains that persons name. Or names.
In a Will, the person is called the 'Personal Representative'. Before 2010 MA law changes, this title was the 'executor.'
With a Will, the probate court actually makes the final selection. As we say, 'you nominate and the court appoints.' It's one aspect of Massachusetts probate law.
A MA revocable trust works differently
Differently, because in a trust you actually appoint the person to take over for you. That person is called the 'Successor Trustee'. When you use a Living Trust, there's no need for a probate court to appoint the person because you do it. Yourself. Without a court getting involved.
WHO gets your assets
As I wrote yesterday, if you die without leaving a will or a trust, MA law determines who will get your assets. This MA law is the 'Intestate Statute.' This law lists your nearest relatives. And that's where it goes.
Until 2010, Massachusetts law was that if you died married and had joint children, a part went to EACH. Not all to your spouse.
For many people, they didn't want it divided like this. Because the spouse needed it all. So, you could (and would) sign a will or trust to change from the default law. And it could all go to the spouse. The Will controls over the default law.
About 2010 the MA legislature changed the MA law.
Now, if you:
THEN it all goes to the spouse. That's the newer law.
BUT if either spouse had children that were not joint between them, a complicated set of rules now apply. This area of law has grown complex --- due to societal changes in marriage patterns and children.
By having a will or a trust, you can dictate who gets your assets, within some limits. By the way, the law continues to protect a spouse from receiving zero. But the law continues to allow leaving out a child on purpose.
You can say WHEN the beneficiary receives the assets
Some people you leave money to are decent at handling money.
But some beneficiaries are too young or too old to handle the assets you leave them. Or they may have issues or problems that may get in the way.
Instead of leaving zero to a loved one with a problem, you can add a trust clause to better handle the money. To direct the money be used for them over a period of time.
This provision is called a 'subtrust.' The subtrust is more detailed than you'll typically find in a simple will.
MA estate attorneys know how to do this. They do it everyday.
In a subtrust, you direct the Successor Trustee to hold the money for the beneficiary's benefit. The Trustee decides when and how much. And gives money from time to time to beneficiary. Or pays some bills for them - say roof over head. Think food. Think education. Think no drugs.
You determine how long this situation will continue. The subtrust terminates when a beneficiary reaches a milestone. Perhaps reaching an age of 30. Or sobriety.
The Successor Trustee then distributes it. Maybe to one person or more than one. No longer in trust. Life goes on.
If the first Successor Trustee can no longer function, due to their own death or disability, another one takes over. You can make a list in your trust of future trustees, in order.
Lowering costs after your death
Some people know that your family may need to complete a court process after your death.
It's called probate. It's the process by which a court declares your will official and effective. Probate means 'to prove.' Probate means to prove the will is valid.
Some people think it's too expensive, complicated, and time-consuming. They don't know why it exists. Probate can be a delay and sometimes a real problem.
Other times a delay is no big deal and not horrible. It depends on the situation.
Dealing with a probate court can be a hassle. Going inside a courthouse can raise tensions. People may associate a courthouse with legal fights. By the way, it's always easy to get through by phone to a probate court. Staff is extremely limited for the tasks they must do.
Most families can live without the added pressure. Particularly after a loved one's death.
Some people confuse the exactness and amount of details needed for a probate process with the real, more general need to gather details after death. Details needed with or even without a probate court process. We've handled about 200 post death engagements since 1993. We've been through both probate and no-probate cases. We've seen the difference between a will and living trust after death.
In sum, probate or not, there's details galore. But probate adds to it.
Yet 'avoiding probate' should not be the only reason to do estate planning. There are more, better reasons to get estate planning done.
I'm Joel Bernstein, an estate planning attorney with over 30 years of experience. I use plain English to help you understand wills, trusts, and the other documents you need to protect your loved ones and your estate.
Most middle-aged people aren’t ready for their inevitable death. We make estate planning simple, affordable, and quick. So people can live in peace, knowing their affairs are in order.