Attorney At Law

Est. Planning Documents

What are common estate planning documents?


(1) A Will transfers your property to people and charities of your choice. The Will names someone to be your Executor and a Guardian of your minor children. A Will becomes effective when you die but only after it is admitted to probate. 

(2) A Revocable Trust can be used to hold and manage your assets during your lifetime and avoid probate administration upon death. You select the person or persons you want – usually yourself-- as the Trustee(s) to manage your assets while you are alive and a Successor Trustee to step in when you become incompetent or die. The Trust becomes effective immediately, continues in force during your lifetime and remains in effect after your death. While you are alive and so long as you are competent, a Revocable Trust can be changed at any time. 

(3) A Health Care Proxy names someone to make medical decisions if you are no longer able to communicate your wishes. The Proxy authorizes a person of your choice to make end-of-life decisions. 

(3) A Durable Power of Attorney names someone to handle your financial matters if you can no longer do so. If you do not already have a Durable Power of Attorney and you become seriously disabled, someone would have to go to Court to be named as your Conservator or Guardian to mange your financial affairs. 

(4) A Crummey Trust is frequently established for minor children and is funded with the annual gift tax exclusion (currently $14,000/year). The trust is irrevocable and transfers assets to children tax-free. It is called a Crummey Trust after the individual who successfully defended the use of this technique when challenged by the Internal Revenue Service. 

(5) An Irrevocable Life Insurance Trust permanently removes life insurance proceeds from your estate and reduces estate taxes that would otherwise be due. 

(6) A Qualified Personal Residence Trust is funded with your primary or vacation home. You transfer your real property to the trust for a term of years and if you survive the term, the property passes to your designated family members at a substantially reduced value. Not only can you give your valuable real estate to your family at a discounted value but you remove future appreciation in its value from your estate. 

(7) A Supplemental Needs Trust is for disabled children or adults. It protects the money in the trust for the benefit of the beneficiary in a manner that will not interfere with government benefits. 

(8) A Charitable Remainder Trust is an irrevocable trust that is usually funded with highly appreciated assets. The Trustee may sell the appreciated assets and not pay any capital gains tax. During your lifetime the Trustee will pay you (and other individual beneficiaries, if you wish) a percentage of the annual trust income. Upon the death of all the individual beneficiaries the trust assets pass to a charity of your choice. This type of trust both allows you to benefit from a larger income stream during your lifetime than you would have otherwise been able (because the proceeds are not reduced by taxes) and to satisfy your charitable goals upon death.

(9) A Prenuptial Agreement is important for people entering a marriage with pre-existing, substantial wealth, couples who have been married before, or couples who have children from a previous marriage. They are also important for same sex couples who marry in Massachusetts and later move to a state which may not recognize their marriage.  A prenuptial agreement is a road map for what happens if a couple divorces or dies. Rather than depending on the courts or on laws that may not reflect what you want, you can reach an agreement before you marry that more accurately reflects how you want your assets to be divided upon death or divorce.  Property that belongs to one party entering a marriage remains that party's separate, non-marital property. Other issues that can also be covered are alimony and division of marital assets (property acquired after the marriage). 

(10) A grantor retained interest trust ("GRAT") can be a powerful tool for investors who wish to transfer wealth, particularly assets that may appreciate rapidly, to family members or others at a reduced gift tax value. The IRS values a gift contributed to a GRAT using an interest rate that is keyed to prevailing interest rates at the time the trust is funded. If, when the trust ends, the trust has outperformed the IRS rates, the excess value will pass to the trust beneficiaries completely tax-free. When interest rates are low, appreciating assets in a GRAT are more likely to produce an excess return. This is an excellent estate planning tool for an investor with assets that are likely to out perform the market.

These are just some of the estate planning techniques that are available.