Estate planning is important because, no matter how young you are or small your estate may be, it allows you to ensure that your property will go to the people you want, in the way you want, and when you want. Making these decisions in advance will go a long way towards avoiding family conflict and costly legal proceedings.
If you postpone planning, you run the risk that your child’s inheritance could be mismanaged or lost. Your child could be financially exploited. An estate plan can protect your children from bad decisions, outside influences, creditor problems and divorcing spouses. Further, if you have a disabled child, an outright inheritance may disqualify him or her from receiving many public benefits. A proper estate plan can provide benefits to your disabled child but not cause him or her to be disqualified for most public benefit programs.
In Massachusetts, a minor child who receives any property through an estate is entitled to receive his or her full inheritance at age eighteen. When a parent dies, a conservator is appointed by the Probate Court to manage funds that belong to a minor or a person with a disability. When the child reaches eighteen, the conservator must hand over the funds. If you want to restrict your child’s access to the money until he or she reaches a more mature age (such as 25 or 30), you must use proper planning to delay the distribution of your child’s inheritance.
When both parents die, or if one parent dies and the surviving parent is absent or unavailable, the court will appoints guardian and conservator to act as a surrogate parent until the children reaches the age of eighteen. The guardian’s job is to raise the children and make decisions for them regarding their education, religious training and medical care. The conservator’s job is to handle the children’s funds until they reach eighteen. Without proper planning, the person the court appoints to raise your children may not be the person you would have chosen. The result could be that the person you least want to raise your children or manage their funds ends up in control.
If a single or divorced parent dies, the surviving parent is usually given custody of the children unless that parent has legally abandoned the children or is clearly unfit. If there is no estate plan, that parent may also be appointed to manage their inheritance. For some parents, this can be anxiety provoking, especially if there is drug or alcohol abuse, mental illness, gambling, or creditor issues. Although there may not be much you can do to prevent your former spouse or partner from raising your children, you can prevent him or her from getting control of your children’s inheritance.
There is also a possibility that the court could appoint a stranger to manage your estate. Most people do not like the idea of someone they do not know going through their personal effects after they are gone. In addition, if a stranger were appointed to oversee your children’s inheritance, he or she would be unfamiliar with your family values and may not use the funds for the benefit of your children as you would if you were still alive. With a proper estate plan, you can put a person you trust in charge of handling your affairs and the affairs of your children.
Without a proper estate plan, the state will determine who receives your property at the time of your death. This means that your spouse is not entitled to receive all of your separately owned property. Your spouse is only entitled to one-half of such property and your children are entitled to the rest of your individually owned property. This may leave your surviving spouse without enough money to live comfortably. In addition, Massachusetts’ intestacy rules are inflexible and make no exceptions for disabled persons or those in unusual need.
On death, a person’s separately owned assets must pass through probate. Probate is simply a means to transfer ownership of property upon death. However, the probate process can be lengthy and expensive. Probate proceedings generally take at least one year to complete and the cost of planning to avoid probate may be less than the cost of probate proceedings. Additionally, probate administration can often be inconvenient for many people. There are accounts to keep, hearings to attend, property to distribute and a myriad of other details associated with a person’s duties as a personal representative.
Depending upon the amount of assets you own at the time of your death, federal and state estate taxes could be imposed on your estate. Such taxes could significantly reduce the amount of money you can pass to your survivors. With a proper estate plan, you can minimize or even eliminate estate taxes and leave more funds to your heirs.
Lastly, a proper estate plan allows you to choose who would act for you in the event you become incapacitated rather than allowing a court to make that determination. If you later lose the ability to handle your affairs, you can avoid the need to seek the appointment of a guardian or conservator, which is often a time consuming and costly process. You also stay in control by appointing someone you trust to manage your personal and financial matters.
Regardless of whether you are young, don’t have much or are single, you need to have an estate plan. It is the only way you can make sure that your family is cared for in the best manner possible when you are gone or are temporarily or permanently disabled.
THE LAW OFFICE OF STEPHANIE KONARSKI
36 North Bedford Street, East Bridgewater, MA 02333
Phone: (508) 350-0120 Fax: (508) 350-0121
Email: stephanie@konarskilaw.com
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