Frequently Asked Questions
General Estate Planning
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The IRS defines the estate tax as a tax on your right to transfer your property at your death. More bluntly, it is a tax on the total value of your net worth.
The federal estate tax is only triggered for those with substantial wealth, but at a rate of 40%. However, the Massachusetts estate tax is triggered at a much lower threshold, and impacts middle-class families, with rates that top out at 16%.
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Probate is the court-supervised process of transferring assets after someone has passed away. Most people prefer to avoid probate due to the delays, expenses, and privacy intrusion involved. Probate can be avoided with comprehensive estate planning. Avoiding probate is not the same thing as avoiding taxes. You could have a probate estate without a taxable estate. You could also have a taxable estate without a probate estate.
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Whether you are making an estate plan for the first time or updating an existing one, Old Colony Law’s process typically looks like this:
Consultation - An initial meeting to discuss your wishes, concerns, assets and other relevant factors.
Engagement formalization - After the consultation, if we decide to work on your estate planning together, we will formalize our engagement by executing an engagement letter.
Document Drafting - We begin drafting the framework of your legal documents, like your Will, Trust, Power of Attorney, legal memoranda and other legal documents that will be a part of your estate plan.
Review Meeting - We meet for a second time to walk through your draft documents together and discuss your plan in more detail.
Finalization - Following the Review Meeting, we will revise your draft documents, and work together to address any remaining open questions and issues.
Implementation - We will meet for a third time to execute your documents. From there, we keep your file open for 60 days. During this time, we will record deeds, update beneficiary designations, and do what we need to do to ensure your plan works as intended.
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Estate planning is not typically a one-time event. As changes to your wishes, your circumstances and the law occur, changes to your estate plan may be in order. Births, deaths, marriages, divorce, medical diagnoses, asset acquisitions, could trigger the need for a change.
For some people, it is advisable to review their estate plan at least annually. For others, once every several years is sufficient. Part of the estate planning process is creating a plan for periodic review.
Asset Protection & Consequences of Inaction
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Asset Protection is the process of using the law to reduce the risk of loss due to lawsuits, creditor claims, bankruptcies, accidents, and disasters. Asset Protection may be bolstered in the estate planning process with proper trust planning.
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Without an estate plan, your assets may be subject to probate, which can be time-consuming, expensive, and expose your estate to creditors. Additionally, the government will determine how your assets are distributed upon your death. Failing to plan may increase the likelihood of disputes (or innocent confusion) among loved ones and may result in a child’s spouse grabbing your child’s inheritance in a future divorce.
A lack of asset protection can be problematic even before death. For example, if you become incapacitated without proper legal planning, a court may appoint someone unfamiliar to oversee your financial affairs and make medical decisions on your behalf. The estate planning process can also be helpful in protecting assets if you’re a business owner or a professional at a high risk for litigation.
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Estate planning provides an excellent opportunity to build a lasting legacy. By leaving assets to charity, you can continue to support the organizations that you value most, even after your death. Old Colony Law assists clients with understanding their charitable giving options both locally and nationwide.
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If you fail to create an appropriate plan with the proper components, such as a special needs trust or supplemental needs trust, your child may be at risk of losing eligibility for essential government benefits like Supplemental Security Income (SSI), and Medicaid. Without proper planning, a direct inheritance could disqualify your child from these programs, which could compromise their long-term care and financial stability. By setting up a special needs trust, you can ensure that their inheritance is managed in a way that preserves their eligibility for benefits while providing for their additional needs.
Common Misconceptions
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It could be. However, proper estate plan requires more than just merely having a sill or filling in the blanks. For most individuals, an online will is probably not sufficient to protect their assets from probate or to address tax-related issues. Online tools often contain vague terminology intended to apply broadly, and not to specific individuals or specific jurisdictions. Even if someone ultimately gets an online will, there still needs to be a complete estate plan; a will is just one document, not a plan in and of itself.
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Yes. Even those without children generally prefer to avoid probate, taxes, and privacy intrusions. Those without children may still be concerned about protecting an inheritance for a spouse or other loved one or making charitable donations.
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Estate planning is essential for everyone, regardless of wealth. To engage in estate planning is an exercise of your property rights. If you are not wealthy, that just means you probably will not have as many tax-related issues to address. However, estate planning is still necessary to ensure that your assets are protected, your wishes are honored, and your loved ones are taken care of.
Business Considerations & Estate Planning
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Proper estate planning can protect your business from probate and reduce potential estate taxes. We help business owners integrate their business assets into their overall estate plan, ensuring seamless management and transfer of ownership.
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When a business owner dies, what happens to the business depends on the owner’s estate plan and whether there is a business succession plan. A business could simply terminate upon death, be owned by the owner’s estate, be passed on to family members, or, in the case of businesses with multiple owners, pass to other business owners.
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Yes, we can assist in business succession planning to ensure a smooth transition of ownership or leadership. A business may be transferred over time as part of a multi-year process as part of a tax avoidance strategy. Other assets may be used if you have multiple beneficiaries but not all have an interest in running or owning the business.
Working with Old Colony Law
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The timeline generally varies based on an individual’s needs or urgency. Typically, the process is completed within a month or two of the consultation. However, we are also able to engage in crisis planning when time is of the essence. We re also able to slow down the process if we need to sort through any ancillary issues.
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The cost of estate planning varies depending on the complexity of your needs. We will need to learn more about your wishes, your circumstances, your assets and your family. We almost always perform estate planning legal services on a flat-fee basis. You will know exactly how much your estate planning will cost when you leave your consultation.
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Old Colony Law’s estate planning process is efficient and effective. Our process typically involves a consultation, review meeting, signing ceremony, and asset titling assistance.
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At Old Colony Law, we create a wide range of estate planning documents to meet your needs. We start with essential documents such as Wills, Revocable Trusts, Powers of Attorney, Health Care Proxies, and Digital Asset Releases. For more complex situations, we also craft specialized trust documents, including:
Insurance Trusts
Estate Tax Reduction Trusts
Education Trusts
Grantor Retained Annuity Trusts
Charitable Trusts
Our goal is to ensure that your estate plan reflects your unique circumstances and wishes, and provides comprehensive protection for your assets and family.
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Please visit our Resources Page for more information. You are also welcome to schedule a brief phone call with us to learn more about estate planning and our capabilities.
Ready to Take the Next Step?
We understand that estate planning can feel overwhelming, but you don’t have to navigate it alone. At Old Colony Law, our dedicated team is here to guide you through every step of the process, ensuring that your unique needs and wishes are met. If you have additional questions, we welcome you to contact us. If you’re ready to start crafting your estate plan, please schedule a consultation. Let us help you safeguard your legacy and provide peace of mind for you and your loved ones.