Over the last several years, legal services have been developing online as a response to people not wanting to spend money on attorney’s fees. Although people wish to avoid these fees, in some cases, the fees are only a fraction of what would ultimately be paid as a result of incomplete planning.
What these online services offer individuals is what is considered within the legal field as “Boiler Plate” documents which are basic templates of documents that would be suited to fulfill many needs at once. This may sound like an ideal solution to spending money on legal fees, but in reality dealing with the potential consequences of using these documents could be more costly than the fees themselves.
Although the current attorney’s fees may be more than an online fee, it could save both the client and the client’s family in the long run. A judge in Florida best summed up this situation. She stated in a case involving one of these documents prepared by an online service, that an individual could end up “…penny wise and pound-foolish.”
The court further stated:
“I therefore take this opportunity to highlight a cautionary tale of the potential dangers of utilizing pre-printed forms and drafting a will without legal assistance. As this case illustrates, that decision can ultimately result in the frustration of the testator’s intent, in addition to the payment of extensive attorney’s fees – the precise results the testator sought to avoid in the first place.”
In that Florida case, a woman had an online legal document service prepare her estate planning documents. What she did not realize is that the document failed to carry out her wishes the way she intended. In essence, the Will she prepared online distributed only a portion of her property to her intended beneficiaries and the remainder of her estate was left to individuals she did not intend to inherit her property.
This case resulted in both the client and her intended beneficiaries being deprived. The client was deprived because her last wishes were not carried out the way she envisioned and the intended beneficiaries did not receive the intended inheritance and were subject to additional legal fees with litigating the matter.
One analogy that comes to mind is that a person can go online and find out how to perform surgery on oneself, however he most likely would rather have a licensed physician perform the surgery as they are better trained and have the required skill set to evaluate certain situations. Think of an attorney as a legal surgeon. An attorney is able to create the document and fine tune it to the client’s specific needs and desires.
So at what point should someone reconsider being a penny wise and a pound foolish?
We are excited to announce the installment of a new Client Portal. This will allow us and our clients to easily transfer documents to each other and will allow clients to have up to the minute access to their files. If any current clients wish to opt into this service please contact email@example.com and let us know!
Have you looked at mom and dad’s health care proxy lately?
We assume that when mom and dad go to their lawyer to get their estate in order, that there is nothing left for us to do at that point. Unfortunately, this is a common error.
All too often, people create a health care proxy or a durable power of attorney, but they leave no instruction to the named fiduciary as to what is expected of her. In fact, many people are not even aware that they are even responsible for making the hard choice of whether to pull the plug on mom or dad.
That is why it makes sense to at least have a conversation with mom or dad periodically and just ask, “hey, out of curiosity, I just uploaded my health care proxy to the cloud so my spouse and I can easily access it when we need it. Where is your health care proxy, and who did you name in it?”
While this conversation opener is not the best for everyone, it is still important to understand that a conversation about where the health care proxy is and what it says is crucial. Also, don’t stop there. If the mood allows for a discussion as to what kind of quality of life mom and dad would like to have if there was no chance of living, then engage in that opportunity. Making the decision to pull the plug on mom or dad can be that hardest thing you have to do, but having their input ahead of time can help alleviate the concern and give you some peace of mind if the time comes.
When is the reading of the Will?
Never. The reading of the Will is a Hollywood fiction and a dramatic plot twist in many novels.
However, today there is no gathering of the family in the lawyer’s oak filled and dusty library to discuss the final wishes of the family’s loved one. There is no morbid meeting of the decedent speaking to us from beyond the grave.
There is only the hard truth that the person we loved is now gone, and if he conducted the proper estate planning, left us with a written Will or Trust to let us know how he intended his assets to get passed down.
It is possible that the concept of the reading of the Will derives from certain points in our history where there was widespread illiteracy which could have contributed to some communities finding the need to read the Will. Also, many centuries ago it was much harder to copy documents like a Will, so it is possible that a Will was read to a group of people just because it was easier to spread the message that way.
While a reading of the will is not necessary in today’s society, there is still some benefit to discussing the contents of a Will before a person dies. In our office, we provide a family meeting where families can get together after a Will is prepared to discuss what it might look like when the person passes away. That way everyone is on the same page and there are no surprises when the person is gone.
So when you hear about a reading of the Will in a movie or a book, soak in the dramatic plot, but be mindful that it is not reality.
Estate Planning is crucial in today’s world. It allows for people to alleviate some stress from friends and family members during an extremely stressful time. A proper estate plan can ensure that the client’s wishes are carried out through a Will, Trust or other document that allows a person to express his or her wishes. In Massachusetts, one of the main reasons for a person to create a trust or estate plan is to save money on certain tax matters. However, there are various non-tax related reasons why someone should create an estate plan.
Some of the non-tax reasons to create an estate plan include:
As it can be seen, there are a number of non-tax related reasons to create an estate plan and it is important for someone who desires to accomplish any of the above items to contact a qualified legal professional for guidance on accomplishing those goals.
If a person owns life insurance policies, and/or wishes to purchase life insurance, an Irrevocable Life Insurance Trust can be used to transfer ownership of those policies into the trust (and/ or to apply for the policy), thereby excluding the value from the client's estate and from the estate.
Insurance is a unique asset in that it has “springing” value, i.e., its value multiplies greatly as a result of a person’s death. Although this has obvious financial benefits, the IRS and state tax authorities will take a significant share of this enhanced value unless the policy is sheltered in a life insurance trust. Under the estate tax rules, the proceeds of an insurance policy will be taxable at the owner’s death as long as the owner retained “incidents of ownership” over the policy. These incidents would include the power to change the beneficiary, to surrender or cancel the policy, to assign the policy, to pledge the policy as security for a loan, or to obtain a loan from the insurer. Given the broad scope of this definition, it is virtually impossible to own a policy on a person’s own life without it being subject to estate tax.
Proper funding of the trust is important, because it can be done in a way that does not result in a taxable gift to the trust beneficiaries. This is usually accomplished by the grant of Crummey powers in the beneficiaries of the trust. A Crummey power allows the trust beneficiary to withdraw up to $14,000 a year from any contributions that is made to the trust to fund the policy. In almost all cases, the beneficiary will decline to exercise the withdrawal power, knowing that it makes better financial sense to leave the money in the trust to fund the insurance. Additionally, the proper selection of a Trustee is very important.
A person should consider an independent trustee with no beneficial interest to act as Trustee in order to avoid any adverse estate tax consequences. Additionally an Irrevocable Life Insurance Trust is by its nature irrevocable, meaning that it cannot be changed. Therefore it is important that it is structured in a way that a client is comfortable with.
All too often we create a beautiful estate plan for clients just to find out that they did not complete things on their end by failing to fund their living trusts during their lifetimes. What results is a less than optimal estate plan.
Once a Living Trust is set up, a client needs to fund his Trust during his lifetime in order for the estate to avoid probate. Any assets not transferred to the trust during the client’s lifetime will be subject to probate. Any assets which are not transferred to the Living Trust and do not have beneficiary designations will be subject to probate. Although a Will can provide that assets pass into a Trust at death, those assets must pass through probate first. By funding a Living Trust during a person’s lifetime, the assets will be immediately available to the beneficiaries upon death. While a Trust can be funded at death, there are certain limitations as to what and how things get transferred. Therefore the best time to fund a Trust is during a person’s lifetime.
Funding a Trust is not difficult, but it does require some work. A client can choose to fund his Trust on his own or hire the Law Firm to handle it for them.
Moustakis Law LLC received great coverage from the Amherst Patch regarding our open house on May 25!
We have undergone some exciting changes in 2017. We have changed our name from “The Law Office of Peter A. Moustakis, LLC” to “Moustakis Law LLC”. All of our contact information will remain the same.
Also, for many years, we have referred our clients to colleagues and friends we have in New Hampshire. But we have decided that now is the right time for us to bring our unique law practice to New Hampshire by opening another location in Nashua, New Hampshire.
Moustakis Law LLC is committed to helping families through different legal matters as their lives unfold. Whether it is through the purchase of a new home, the preparation of a Will or dealing with the loss of a loved one, we are here to provide the legal counsel necessary.
We blend tradition and innovation to provide the best experience possible for our clients.
Some of the things that make us unique include: The Family Inheritance System; advising on how to use technology effectively with respect to an estate plan; and providing for the care of a pet or animal as well as children when preparing an estate plan.
Here is our new contact information:
Moustakis Law, LLC
30 Eastbrook Road, Suite 301
Dedham, MA 02026
Moustakis Law, LLC
20 Trafalgar Square, Suite 480
Nashua, NH 03063
We are excited to begin this new chapter of Moustakis Law LLC.
Peter A. Moustakis is the founder of Moustakis Law LLC
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Please note that the information contained in this blog is not an exhaustive list of the matters pertaining to the discussion. Every person has a unique situation that must be tailored with the advice of an attorney after consultation. The material published on this blog is made available by the Moustakis Law LLC for informational purposes only and should not be considered legal advice. Before you make any decision that may have legal implications, you should consult with a qualified legal professional for specific legal advice tailored to your situation. Your visiting this blog does not establish an invitation to enter into, and does not create an attorney client-relationship.