The DJT Blog

In recent years, a number of non-lawyers have started offering Medicaid (Longterm MassHealth in Massachusetts) planning services to seniors. While using one of these services may be cheaper than hiring a lawyer, the overall costs may be far greater. The person offering such services may not have any legal knowledge or training. Bad advice can lead seniors to purchase products or take actions that won't help them qualify for Medicaid and may actually make it more difficult. The consequences of taking bad advice can include the denial of benefits, a Medicaid penalty period, or tax liability. Additionally, our experience, having provided services in this area for over 30 years, has shown these non-lawyers have consistently failed: To diligently and comprehensively identify all the assets of an applicant before applying. Do not explain adequately, movement of the applicants’ funds over the five year lookback, which is necessary for the applicant to be accepted by Medicaid (MassHealth). Most do not offer planning advice. In contrast as an attorney, my priority will be to determine what money can be saved, used within the rules and how especially to handle real estate that the applicant has an ownership interest in. Such advice could preserve their home for their spouse and other beneficiaries and save the applicant or their family thousands of dollars, far exceeding the cost of such planning or services for the application that an attorney would charge. If they do provide advice, it could be bad advice, costing the applicant to lose an eligibility date or eligibility all together. A loss of even one month of eligibility could cost the applicant or their family as much as $20,000. As a result of problems that have arisen from non-lawyers offering Medicaid planning services, a few states (Florida, Ohio, New Jersey, and Tennessee) have issued regulations or guidelines providing that Medicaid planning by non-lawyers will be considered the unauthorized practice of law. For example, in Florida, a non-lawyer may not render legal advice regarding qualifying for Medicaid benefits, draft a personal service contract, or determine the need for or execute a trust.  Applying for MassHealth is a highly technical and complex process. It is especially difficult for long term care benefits like coverage for nursing homes. A lawyer knowledgeable about Medicaid law in the applicant’s state can help applicants navigate this process. An attorney may be able to help your family find significant financial savings or better care for you or your loved one. This may involve the use of trusts, transfers of assets, purchase of annuities or increased income and resource allowances for the healthy spouse. In Massachusetts particularly, the application process, although conceptually straightforward, is not. Too often a comprehensive application submitted still ends up on an appeal to the Board of Hearings, which is handled by attorneys for the Commonwealth.

When I give Seminars on Trusts, they are long, detailed and I think very helpful to people who want to learn about Trusts. But I almost never cover enough information on your different choices for Trustees and the responsibilities of the Trustee. Like any estate documents they are only as good as the fiduciaries named in them. For a trust the fiduciary is called a Trustee. Trust Administration Basics A trust is established through the creation of a trust agreement. Within the trust agreement, the Donor or Grantor (creator) of the trust must appoint a Trustee. A Trustee can be any qualified adult, including a friend, family member, or professional (such as an attorney). The Donor can also appoint more than one Trustee, making them Co-Trustees or appoint an entity, such as a bank, to be the Trustee. The Trustee’s overall job is to guard the trust assets and oversee the administration of the trust. Administration the trust, however, involves numerous duties and responsibilities, including: The Donor or Grantor of the trust creates the trust terms, and those terms dictate how the trust should be administered. The Trustee needs to have a clear understanding of those terms and is legally required to follow them without deviation unless a term is illegal, impossible, or unconscionable. The Trustee is required to understand the trust purpose, as outlined in the trust agreement, and to make decisions with that in mind. A Trustee cannot allow his/her personal opinion to get in the way while administering a trust. One of the most important aspects of a Trustee’s job is protecting the trust assets. The Trustee is also responsible for investing the trust assets to help the principal grow. Unless the Donor specifically directs the Trustee to make riskier investments, all investments should be low risk and protecting the trust principal should take precedence over growing the trust assets. The Trustee has a duty to keep trust beneficiaries apprised of trust business and to communicate with beneficiaries as necessary. The terms of the trust agreement will dictate how the distribution of trust assets should be handled. The Trustee, however, is responsible for making sure those terms are followed and that the beneficiary receives the distribution according to the terms of the trust agreement. The trust agreement may give the Trustee the authority to make discretionary distributions. If a beneficiary needs funds prior to a scheduled distribution, for example, the Trustee may have the authority to grant that request. A Trustee should keep detailed records of all trust business, including distributions, payment of trust bills, and time spent administering the trust because those records may be needed to defend the trust, justify trust expenses, or even prevent the Trustee from being held personally liable for mistakes made during the administration of the trust. Because a trust is a separate legal entity it may be subject to taxation. Whether the trust must file a tax return and/or pay taxes will depend on the type of trust, the value of trust assets, and other variables; however, the Trustee of the trust is responsible for determining if any taxes are due and who or what should be paying them. If the trust has an EIN then the Trustee must also file the appropriate tax returns and pay or redirect any taxes due. The Trustee must provide an accounting annually to all qualified beneficiaries. Factors to Consider When You Choose Your Massachusetts Trustee A Trustee is in a fiduciary position, meaning that the utmost care must be taken to protect the trust assets and that all decisions must be made with the best interests of the beneficiaries in mind. A Trustee is also required to juggle a considerable number of duties and responsibilities while administering the trust. All of this should be taken into consideration when appointing a Trustee to limit the likelihood of costly mistakes being made by the Trustee. Before appointing a friend or family member based solely on your relationship with that person, consider whether that person has the following essential characteristics: The Trustee you appoint will be responsible for managing and investing the trust assets. Ideally, your Trustee should have a background or education in finance. By the same token your Trustee must understand the trust terms and the state and federal laws that are applicable to the administration of the trust. That makes someone with a legal background an ideal candidate for the position. Your decision should not be based entirely on the fact that you trust someone; however, being trustworthy is certainly a necessary characteristic for a Trustee given that the Trustee will control the money and assets you use to fund the trust. The Trustee is also responsible for distributing those assets to beneficiaries and paying trust bills, including his/her own fee for acting as the Trustee. Your Trustee may not agree with the terms of the trust agreement, but that cannot interfere with his/her job as Trustee. A Trustee is legally required to administer the trust and make discretionary decisions with the stated trust purpose in mind and by using the trust terms created by the Donor without regard to the Trustee’s personal opinion. Consider whether your prospective Trustee will likely create a conflict. If he/she is a member of the family, for instance, will appointing that person as your Trustee create a conflict within the family? Are other family members beneficiaries of the trust, putting the Trustee in a potentially awkward position? What about business dealings that could create a conflict for the Trustee? Whenever possible, avoid appointing a Trustee who will likely create a conflict. People frequently make the mistake of assuming that someone is willing to serve as the Trustee of the trust they create. With that in mind, be sure to discuss the position with a prospective Trustee before appointing him/her to the position. Along with making sure that a prospective Trustee is willing to serve, take into consideration whether the person will realistically be available to fulfill the duties and responsibilities involved in administering the trust. Consider where the person lives or is likely to live in the future as well as his/her existing family obligations. Finally, consider the person’s age and health when deciding if they would make an ideal candidate for Trustee . There are many considerations to think about if you have co-trustees. Often co-trustees are a family member/friend and a professional like an attorney or accountant. There are many good reasons to use a professional trustee with or without a co-trustee. These considerations are different for everyone and should be discussed at the time of creating the trust.

1577 Spring Hill Road, Suite 310, Vienna, VA 22182 | 703-942-5711 | naela@naela.org | www.NAELA.org National Elder Law Month – May May is National Elder Law Month, a time designated by the National Academy of Elder Law Attorneys (NAELA) which I have been a member for over 25 years, to raise awareness about the legal, health, social, and financial issues faced by older adults and the resources available to support them. As a member of NAELA — the leading professional association dedicated to improving the quality of legal services provided to older adults and individuals with disabilities — I recognize the valuable public service that Law Office of Dale J. Tamburro provides to the residents of towns and cities that I provide seminar and workshops at. In light of our shared commitment to community support, I would like to invite you my seminars in May and June. These events are designed to educate the public on various topics related to elder law. In May we are focusing on Aging in Place, what to consider if you choose to stay home and alternatively if you decide to downsize what are the most important issues to be concerned with. National Elder Law Month is the perfect time for us to work together in raising awareness about these important issues and ensuring that older Americans, their families, and caregivers have access to the information they need. I would love the opportunity to discuss how we can partner on this initiative. Please let me know if you are interested or if you would like more details. I look forward to the possibility of working together to serve our community. Sincerely,  Dale J. Tamburro

Owning a vacation home is a special privilege—but deciding what happens to it after you’re gone takes careful planning. Many parents hope to keep the home in the family, but doing so can be more complicated than expected. While meant to be fun and relaxing places to get away from everyday life, vacation houses can cause problems between siblings after their parents pass away. Some siblings may want to use the house, while others may need cash and want to sell. Disagreements can also arise over maintenance costs, taxes, and scheduling use of the home. One common option is to leave the property to your children in your will. However, if they inherit it equally as joint tenants or tenants in common and one sibling wants out, that sibling can force a sale if the others can’t afford to buy them out. Before deciding to pass the home on directly, consider holding a family meeting. Ask your children if they all want to keep the property and discuss logistics such as upkeep, taxes, and scheduling. Putting a written agreement in place, including a buyout plan, can help avoid future disputes. The buyout amount could be less than market value, and payments can be made over time; it's really completely up to the family. Other Options : Instead of giving the home outright, you could place it in a trust or a Limited Liability Company (LLC). LLCs are increasingly being used for vacations homes. Using an LLC allows parents to transfer interest in the LLC to their children while still retaining control. Parents can use the annual gift tax exclusion to slowly gift their children additional interest in the LLC each year. The LLC agreement can designate a property manager, provide instructions on maintenance costs and property taxes, and include buyout options. Property in an LLC is also protected from creditors.  Another option is a Qualified Personal Residence Trust (QPRT), which allows parents to live in the home for a set number of years, after which ownership transfers to the children. QPRTs can offer significant tax savings, but they are complex and must be set up carefully to be effective.

CHOICE OF TRUSTEE One of the most difficult and important tasks in preparing a trust for an individual is the selection of a trustee or trustees to manage the trust. Proper management of the trust can make a huge difference in the beneficiary's quality of life for years to come, if not for her entire life. Generally, there are three categories of trustees. Family/friends, Professional Trustees and Professionals serving as trustees (i.e... Attorneys and Accountants). Here are seven issues I have asked them to consider in making their decision: Temperament. Personalities to avoid as Trustees include emotional, confrontational, and dogmatic. Family and friends might sound good at first but if there is a potential for conflict of interest or excessive emotions you want to weight the value of retaining family harmony. Cost. Many people fear using a professional trustee -- trust companies, banks, attorneys, accountants -- due to the cost. Professional trustees usually charge between 1.0 and 1.5% of assets under management, the fee decreasing as the trust funds increase. Over time, these costs can add up, but not nearly as much as the cost of bad management. To put these costs in perspective, they are often the same or less as financial advisors or mutual fund companies charge, and they do not take on any of the fiduciary responsibilities of trustees. Alternatively, many attorneys’ fees will be the same as their hourly fees for any client. Number. In some case, clients are comfortable simply naming their son or daughter as the sole trustee but are nervous about what that might do to their relationship with other family members. Another trustee (co-trustee) would allow them to share decision-making and responsibility (and blame, perhaps), as well as the workload. It would also provide redundancy if one of the trustees was unavailable for any reason. While it makes a lot of sense to have more than one trustee, more than three starts to get cumbersome. While any single trustee can act for the trust in terms of writing checks and directing investments, they must be carrying out the decisions made by all the trustees. Keeping everyone in the loop and making joint decisions all the time can be difficult if too many people are involved. Stability . Trusts can last a long time. Will the person you appoint be able to provide the necessary attention to the trust for years or decades? Will they be able to keep up with the often-tedious jobs of paying bills, filing tax returns, and preparing accounts? Since we cannot be certain of the answer to this question if when appointing an institution -- banks get bought and sold, sometimes with ill effect on their trust departments -- the trust must include a mechanism for changing trustees. Financial acumen. The trustee will need to manage trust investments and spending, taking into consideration the needs and interests of both current and future beneficiaries. Trying to balance their current and future needs can be difficult. They may have $1 million in trust, which seems like a lot of money (perhaps not what it used to be), but to make sure that the fund keeps growing with inflation, they need to limit their trust withdrawals to $30,000 to $40,000 a year. This may seem incongruous with so much money invested, but otherwise the buying power of the trust will diminish and ultimately the trust could fall into a "death spiral" as the beneficiary must dip into larger and larger amounts of trust principal to make ends meet. Organization. In addition to all of the factors mentioned above, at least one of the trustees needs to be very well organized in order to meet all of the trustee responsibilities -- making distributions, providing account statements to beneficiaries, reviewing investments, filing timely tax returns. Personal touch. While cost is one reason many clients avoid using professional trustees, another is fear of working with an institution rather than an individual who personally knows the beneficiaries' situations and needs. This can be especially off-putting if the institution has experienced significant turnover in personnel. We've had cases where a parent chose a local banker to serve as trustee only to have that bank bought by a statewide bank which was bought by a regional bank which, ultimately, was bought by a national bank. In the end, the children were dealing with trust officers in another state. This is another reason it's important for all trusts to have a mechanism for changing trustees. As you can see, neither the choice of trustee nor the chosen person's decision to accept the appointment, should be taken lightly. Each client’s decision will be made based on his unique situation, including the available family members and friends, the likely longevity of the trust, the amount of assets under management, and other factors. We find that the combination of a professional trustee who can take care of the administrative side of the trustee's role and a family member who can bring the personal touch often works best. In a practical sense, the professional trustees are more often and attorney because many of the institutionalized trusteed are either cost prohibited or decline to serve because the trust assets are too small. Professional Trustees For large sized trusts (commonly of $1.5 Million in non-real estate holdings), due to the complications of the trustee's role, we strongly urge clients to consider professional trustees such as trust companies, and banks. They are equipped to handle the investment, accounting and tax sides of trust operations and can do so with little risk or difficulty. They should be better equipped to fend off inappropriate requests for distributions and to deal with conflicts of interest. On the other hand, many professional trustees are ill-equipped to deal with the issues presented by beneficiaries with special needs, whether they be eligibility for public benefits or responding to sometimes frequent requests for distributions for unusual purposes. They may be more comfortable simply managing trust assets. Anyone selecting a professional trustee must ask about the prospective trustee's experience with special needs trusts and their methods for responding to these questions. When a large institution is serving as trustee, an inexperienced trust officer may be assigned to the account. He may have little experience dealing with special needs issues. And the person assigned may change over time as employees come and go and, in the case of many banks, as the identity of the bank itself changes from one to another. This can be extremely frustrating for beneficiaries and their families. Attorneys as Trustees For trusts of any significant net worth you can consider using a professional trustee such as an attorney. Attorneys don’t charge as much as institutionalized trustees and will handle much smaller trusts. Attorney also may have some history with the family especially the grantors which may aid the attorney in understanding the grantor’s purpose of having the trust. Attorney’s can also serve as a co-trustee with a family member and allow for the separation of work between trustees. Family Trustees Choosing family members and friends as trustees also has advantages and disadvantages. The advantage is that these are people who know and care about the beneficiary and may be able to you the trust funds to provide the greatest benefit for the person with special needs. Many clients are reluctant to give up control to an unknown third party. A further perceived advantage is that family members normally don't charge for their services. The reality, however, is that trustee fees - typically about 1 percent of trust assets per year, with a minimum for smaller trusts - is very reasonable given the services provided. The risk that a family member trustee will make mistakes or not be able to follow through on the basic trustee responsibilities of prudent investment and accounting are so great that the trustee fee can simply be seen as reasonably-priced insurance. Even the most skilled and responsible family member with the best of intentions may not be able to follow through on all the trustee details given the press of other matters in her life. In short, to appoint a family member is both a large compliment and placing a large burden on her shoulders. Co-Trustees Clearly, there are problems with both family trustees and professional trustees. One solution which we have used with success in our practice is co-trustees - both a professional and family member trustee working together. This can be the best of both worlds. Everyone can rest easily knowing that the basic trust functions will be carried out by the professional trustee. But the family member trustee will be on the scene to make sure that the trust is used to best serve the beneficiary. So, You've Been Appointed Trustee, Now What? You have been asked to serve as trustee on the trust of a family member. This is a great honor meaning that the family member trusts your judgment and is willing to put the welfare of the beneficiary or beneficiaries in your hands. However, it is also a great responsibility. You need to go into it with your eyes wide open. Fiduciary Responsibility. As a trustee, you stand in a “fiduciary” role with respect to the beneficiaries of the trust, both the current beneficiaries and any “remaindermen” named to receive trust assets upon the death of those entitled to income or principal now. As a fiduciary, you will be held to a very high standard, meaning that you must pay even more attention to the trust investments and disbursements than you would for your own accounts. May I read the trust? The trust document is your instruction manual. It tells you what you should do with the funds or other property you will be entrusted to manage. Make sure you read it and understand it. Ask the drafting attorney any questions you may have. The Trust’s Terms. Read the trust itself carefully, both now and when any questions arise. The trust is your road map and you must follow its directions, whether about when and how to distribute income and principal or what reports you need to make to beneficiaries. What are the grantor's goals? Unfortunately, most trusts say little or nothing about their purpose. They give the trustee considerable discretion about how to spend trust funds with little or no guidance. Often the trusts say that the trustee may distribute principal for the benefit of the surviving spouse or children for their "health, education, maintenance and support." Is this a limitation, meaning you cannot pay for a yacht? Or is it a mandate that you pay to support the surviving spouse even if he could work and it means depleting the funds before they pass to the next generation? How are you to balance the needs of current and future beneficiaries? It is important that you ask the grantor while you can. It may even be useful if she can put her intentions in the form of a letter or memorandum addressed to you. Investment Standards. Your investments must be prudent, meaning that you cannot place money in speculative or risky investments. In addition, your investments must take into account the interests of both current and future beneficiaries. For instance, you may have a current beneficiary who is entitled to income from the trust. He or she would be best off in most cases if you invested the trust funds to generate as much income as possible. However, this may be detrimental to the interest of later beneficiaries who would be happiest if you invested for growth. In addition to balancing the interests of the various beneficiaries, you must consider their future financial needs. Does a trust beneficiary anticipate buying a house or going to school? Will she be depending on the trust income for retirement in 15 years? All these questions need to be considered in determining an investment plan for the trust. Only then can you start considering the propriety of individual investments. Accounting. One of your jobs as trustee is to keep track of all income to, distributions from, and expenditures by the trust. Generally, you must give an account of this information to the beneficiaries on an annual basis, though you need to check the terms of the trust to be sure. In strict trust accounting, you must keep track of and report on principal and income separately. Taxes. Depending on whether the trust is revocable or irrevocable and whether it is considered a “grantor” trust for tax purposes, the trustee will have to file an annual tax return and may have to pay taxes. In many cases, the trust will act as a pass through with the income being taxed to the beneficiary. In any event, if you keep good records and turn this over to an accountant to prepare, this should not be a big problem. Delegation. While you cannot delegate your responsibility as trustee, you can delegate all the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation. With such professional assistance, the job of trustee need not be difficult. However, you still need to communicate with those you hire and make any discretionary decisions, such as when to make distributions of principal from the trust to one or more beneficiaries. Distributions. Where you have discretion on whether or not to make distributions to a beneficiary you need to evaluate his current needs, his future needs, his other sources of income, and your responsibilities to other beneficiaries before making a decision. And all these considerations must be made in light of the size of the trust. Often the most important role of a trustee is the ability to say “no” and set limits on the use of the trust assets. This can be difficult when the need for current assistance is readily apparent. Fees. Will I be compensated? Often family members and friends serve as trustees without compensation. However, if the duties are especially demanding it is not inappropriate for them to be paid something. The question then is how much. Professionals generally charge an annual fee 1 percent of assets in the trust or on an hourly basis or some combination. So, the annual fee for a trust holding $1 million would be $10,000. Often, they charge a higher percentage of smaller trusts and a lower percentage of larger trusts. If you are doing all the work for a trust including investments, distributions, and accounting, it would not be inappropriate to charge a similar fee. However, if you are paying others to perform these functions or are acting as co-trustee with a professional trustee, charging this much may be inappropriate. A typical fee in such a case is a quarter of what the professional trustee charges, or .25 percent (often referred to by financial professionals as 25 basis points). In any case, it is important for you to read what the trust says about trustee compensation and discuss the issue with the grantor. If after asking these questions you feel comfortable serving as trustee, then accept the role. It is an honor to be asked and you will provide a great service to the grantor and beneficiaries. This can serve as only an introduction to your duties and responsibilities as trustee.

Credit Shelter Trusts for Massachusetts Residence Credit shelter trusts are a way to take full advantage of Massachusetts estate tax exemptions. Being a Massachusetts resident we have been very lucky in terms of the appreciation of our real estate and many of my clients don’t realize that they are “millionaires” just by starting to look at their “worth” from their real estate. Massachusetts Estate Tax Laws have two major differences from the Federal Estate Tax Laws. An Individual who passes away has a $2.0M Exemption before their estate/beneficiaries will owe an estate taxes. The FEDERAL lifetime gift/estate tax exemption is $13.99 million in 2025. The lifetime gift/estate tax exemption is projected to be $7 million in 2026. Massachusetts does not allow for “portability”. The Federal law does. Portability means that spouses may share in their individual exemption, essentially doubling it. So presently a married couple could exempt up to $28M if one of them died in 2025. To have portability requires that the surviving spouse, elects it by filing a Federal Estate Tax Return for the deceased spouse even though no tax may be due). In Massachusetts the best way to replicate the benefit of portability is the use by both spouses of separate credit shelter trusts. The way to preserve both spouses' exemptions (so potentially $4.0M vs $2.0M) has been to create a "credit shelter trust" (also called an A/B or bypass trust). Simplistically if a couple is worth $3.0M or $4.0M when the first spouse dies and after the surviving spouse is worth $3.0M or $4.0M then when the second spouse dies (assuming the same net worth) the estate tax would be $99,600 for $3.0M and $182,500 for $4.0M. By using these credit shelter trusts, which are unique to married couples, they will use $4.0M in exemptions instead of only having the benefit of $2.0M when the second spouse passes. Standard estate tax planning is to split an estate that is over the prevailing state or federal exemption amount between spouses and for each spouse to execute a trust to "shelter" the first exemption amount in the estate of the first spouse to pass away. While the terms of such trusts vary, they generally provide that the trust income will be paid to the surviving spouse and the trust principal will be available at the discretion of the trustee if needed by the surviving spouse. Since the surviving spouse does not control distributions of principal, the trust funds will not be included in her estate at their death and will not be subject to tax. This way, in Massachusetts the couple can protect up to $4 million from estate taxation while still making the entire estate available to the surviving spouse if needed. The rising federal estate tax exemption means that many older trusts drawn up for married couples contain outdated estate-splitting provisions that may cost them dearly in state or federal taxes, or both. As recently as 2020, if you have retirement funds landing in a trust after your death, it is almost a guarantee the language in your trust will not be up to date unless it was amendment after January 1, 2020. Couples would do well to have their revocable trusts that contain credit shelter provisions reviewed by a competent professional. If you're interested in learning more about CST, contact our office today !

Which Legal Planning Documents Do You Really Need For an Appropriate Estate Plan? Whether you are married with children or a single adult, you should have an Estate Plan to protect your assets, loved ones and personal care in the future. What legal documents do you need to have an appropriate Estate Plan? Everyone is different and estate planning is unique to everyone, so it is difficult to generalize. However, most of us need the first four of the fundamental legal documents referred to below. More and more of us need a Trust of some kind but the specifics of why you need a trust and what kind of trust requires more discussion: Durable Power of Attorney Health Care Proxy A Will HIPAA Release Living Trust Credit Shelter Trust Version if you are married and have a net worth in excess of $2,000,000 combined. Joint Marital Revocable Trust if net worth is less than $2,000,000 Individual Revocable Trust if not married. (Primarily for Long-term Care Protection you would consider an Income Only Irrevocable Trust ) (Another trust called an Irrevocable Life Insurance Trust(ILIT) is used solely so the death benefits are not included in your Estate for Estate Tax Purposes) A Durable Power of Attorney The Durable Power of Attorney is a written document which allows you (the Principal) to designate someone you trust (the Attorney-in-Fact) to make Personal, Business and Financial decisions for you in the event of illness or incapacity. The Durable Power of Attorney allows you to name someone who could take over your personal finances, pay your bills, sign a deed or bill of sale, sign you in or out of a hospital or rehabilitation hospital, make gifts, deal with the IRS, deal with your insurance company or stockbroker, purchase an annuity or engage in Medicaid or long-term care planning on your behalf. A well-drafted Durable Power of Attorney will enable your Attorney-In-Fact to do anything you could as if you were personally present. A Durable Power of Attorney can be broadly defined, or it can be very specific. It depends upon what one wants or needs. A Durable Power of Attorney does not necessarily take effect at the time of signing. A Power of Attorney can "spring" into effect only upon the principal's incapacity or disability whether sudden (an accident or a stroke) or gradual (Alzheimer's disease or mental weakness/illness). A Durable Power of Attorney should be signed while one is in good health. It is preferable to have discussed the Durable Power of Attorney beforehand and make sure the Attorney-In-Fact named in the document agrees to serve and understands what he or she is expected to do. A Durable Power of Attorney needs to be witnessed and be signed in the presence of a Notary Public. A Durable Power of Attorney has its drawbacks. If it is too old a bank or investment company may not accept it. If it does not reference the particular use that you need it for, its intent may also fail. Even if you have a Durable Power of Attorney, you should have it reviewed every three years to see if it is still sufficient. Health Care Proxy A Health Care Proxy is a relatively straightforward legal document that one signs designating another person to make any and all care decision for him/her in the event of illness or incapacity. The person who is appointed is called a health care agent. The agent is authorized to act only if the attending physician determines in writing that you lack the capacity to make or communicate health care decisions. The decision-making authority includes the authority to make decisions about life sustaining treatment. Again, similar to the Durable Power of Attorney a properly drafted Health Care Proxy will have sufficient detail to cover most if not all consequences. A general announcement naming someone to make all medical decisions for you is not sufficient. A Will A Will is a document which, among other things, directs how your property will be disposed of after your death. It is also used to name a Guardian for your minor children in the event of a simultaneous death. The Will also allows you to choose the person or persons who you want to manage your Estate. If you do not have a Will, your property will be distributed according to the Statutory Laws of the Commonwealth, which may or may not be in accord with your wishes. Additionally, virtually anyone, including your creditors, could petition the Probate Court for permission to administer your estate if you have not appointed an Executor through a Will. The use of a Will is part of the Probate Process it DOES NOT AVOID PROBATE. HIPAA Release A signed HIPAA release form must be obtained from a patient before their protected health information can be shared with other individuals or organizations, except in the case of routine disclosures for treatment, payment or healthcare operations permitted by the HIPAA Privacy Rule. A HIPPA Release would allow your spouse, children or whomever is named in it to converse with your doctors about your condition. It does not allow them to make any health decisions, those are left to the person named as your Health Care Proxy. A Living Trust (revocable) A Living Trust is a document by which a person legally transfers ownership of certain property to another party to be held and managed for his or her benefit or for the benefit of others. The person who establishes The Trust is the Donor. A Living Trust, so called, is a trust that is established and takes effect while one is alive as opposed to a Testamentary Trust which is established in a will and only comes into being upon death. A Living Trust is often times revocable - meaning - the person who created it can revoke it. It also can be amended from time to time as situations and circumstances change. By placing property in a Trust, a Trustee is legally responsible for management of the Trust property. A Trust serves to avoid Probate upon the death of the Donor, as the Trust Assets are not in one person's name at the time of death. Unlike a Will, a Living Trust need not be filed with the Registry of Probate. One similarity of a Will and Trust is that the Trust can provide to whom the Trust assets will go upon the death of the one who created the trust (the Donor). One of the differences between a Will and the Trust is that the Will takes effect when you die. The Living Trust, on the other hand, can be established while you are alive, and the Trustee will hold your assets and manage them during your lifetime. The Executor of your Will can only distribute your assets to your heirs at the time of death. The Trustee can manage the Trust in both instances - while you are alive and following your death. A Living Trust provides needed flexibility to deal with changes over the years. It provides, as does a Will, a means to provide protection for handicapped, disabled, or mentally challenged family members or loved ones. It can protect a financially irresponsible beneficiary. It allows one to make specific arrangements for children or grandchildren from a prior marriage. A Trust can also be used to avoid or reduce estate taxes. EXAMPLES: I am asked for generalities: I don’t like generalities because each person, each couple are unique in my mind and the difference between being a document drafter and someone who provides an estate plan is understanding the individuality of your clients. However, examples sometimes help make things easier to understand. Anyone over the age of 18 should have a Health Care Proxy. Anyone one who is married should have a Health Care Proxy and Last Will and Testament. Anyone who owns a house or has a retirement account should have a Durable Power of Attorney. It is that simple. A single person or a widow or widower who have never had a trust will not need a credit shelter trust. They may or may not need a revocable trust or an irrevocable trust or both. This is what having an hour discussion is all about. But…. If you want to have complete unfettered control of what is held in trust, you do NOT want an irrevocable trust, you want a revocable trust. If you want to protect the assets of the trust from creditors or to qualify for MassHealth/Medicaid you do NOT want a revocable trust, you want an irrevocable trust. If you want to control some assets and protect other assets you might want one of each kind of trust. Both kinds of trusts will aid you in the management of the assets if you were disabled and to avoid the probate process if you have passed away. Again, be careful to not assume what I just described is for you. What you might hear in a seminar or a class, whether with me or another speaker is not designed to define what you need. It is a guide. It is essential that have a one on one with an estate planning attorney to create a plan that is distinctive for you. For more information on drawing up a Will, Durable Power of Attorney, Health Care Proxy, or Living Trust, contact your local attorney. For more information on The Law Offices of Dale J Tamburro, please visit our web site at www.tamburrolaw.com , email us at Dale@Tamburrolaw.com or call us directly at 617.489.5919.

Why Your Unique Family Requires a Customized Estate Plan

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