Don’t hide your Will under a chair cushion like Aretha Franklin!
by Andrea Rutherford, Esq.
Estate Planning made headlines last week…
with Michigan Court upholding Aretha Franklin’s 2014 Will – even though it was handwritten (and barely legible), written on a notepad and hidden under a chair cushion. The Will differed in several respects from a 2010 version found in a safe.
The worst part of this story is that Aretha’s four kids have spent five years and nearly One Million Dollars fighting over the Will. And two of her children are reportedly not speaking to each other.
Don’t let this happen to you!
First of all, the outcome of this case would have been worse in Massachusetts or New Hampshire. Here, a Will has to be signed by two witnesses – and they can’t be relatives or beneficiaries. Since neither of Aretha’s Wills were witnessed, she would have been considered intestate, ensuring an even longer and more expensive court fight.
At Dalton & Finegold, all the Wills we draft are witnessed and notarized.
Second, keep your estate planning documents in a safe place. Or, even better, have Dalton & Finegold store your originals. We keep our clients’ documents indefinitely in secure storage. All your heirs have to do is give us a call.
Third, review your estate plan regularly. The disputed issue in the Aretha Franklin case was a provision requiring two of her sons to earn business degrees before they inherit. These kinds of clauses are not uncommon. But circumstances change and a provision that makes sense when your kids are young maybe inappropriate when they are older.
Dalton & Finegold attorneys will be happy to review your existing estate plan, prepare a summary and highlight any provisions that might be out of date.
Creating your own estate plan online can be tempting as a convenient and cost-saving option. There are many websites offering cheap (or free) estate planning documents. Don’t do it! These websites are no substitute for professional legal advice from a licensed, experienced estate planning attorney. The risks of cutting corners on your estate plan far outweigh the savings. There are many pitfalls associated with creating an estate plan yourself online. For example, your do-it-yourself (DIY) estate plan may:
Fail to meet the legal requirements: Laws regarding Wills and other estate planning documents such as Powers of Attorney, Health Care Proxies and Advanced Directives vary from one state to another. Using an online template may not ensure that your estate planning documents meet the legal requirements in your jurisdiction.
Contain ambiguity and errors: Websites offering online Wills and other estate planning documents rely on your inputting information to produce documents. This means that any mistakes or unclear language that you enter becomes part of your legal document—this can lead to confusion, legal disputes, and even court intervention.
Lack customization: DIY estate planning websites often utilize one-size-fits-all templates, which fail to consider your and your family’s unique circumstances.
Lack professional legal advice: When preparing your own estate planning documents using an online interface, there may not even be a human reviewing your plan before it is produced, let alone an experienced legal professional. Effective estate planning involves complex issues, such as asset protection for beneficiaries, tax implications, and guardianship arrangements. An estate plan produced without professional legal review may contain errors or omissions that could have long-term consequences for you and your loved ones.
Lack privacy and security: We all know that online platforms can collect, store, or sell your personal information and data, including sensitive financial information and details about your family members. Entering this information into an unsecured online platform runs the risk of this information falling into the wrong hands.
To avoid these pitfalls, consult our team of experienced estate planning attorneys to set up a complimentary consultation.
Our Estate Planning Attorneys can tailor a Trust to your family’s needs. The first consultation is always free of charge.
Decision Will Affect Mass. Property Liens
By Christopher R. Vaccaro
Special to Banker & Tradesman
Last month, the U.S. Supreme Court ruled in Tyler v. Hennepin County, Minnesota that a Minnesota county acted improperly when it seized a one-bedroom condominium for delinquent property taxes, sold the condominium for more than the amount owed, and then refused to remit the surplus to the elderly owner. The ruling is likely to affect the enforcement of property tax liens in Massachusetts.
Geraldine Tyler lived alone in her Minneapolis condominium. In 2010, her family persuaded her to move into a senior community where she would be safer, but they neglected to keep her safe from the Hennepin County tax collector. Real estate taxes on her condominium went unpaid.
Under Minnesota law, after property taxes become one year delinquent, they accrue costly interest and penalties, and the county obtains a judgment transferring limited title to the state. If the taxpayer fails to redeem the property by paying the delinquent taxes, interest, and penalties within three years, the state secures absolute title to the property. The state may keep the property for public use or sell it to a private party. Surplus proceeds from private sales belong to the county, to be shared with the town and school district. Taxpayers have no right to surpluses.
By 2015, unpaid taxes on Tyler’s condominium exceeded $2,000 and had accrued $13,000 in interest and penalties. The county seized the condominium, sold it for $40,000, and kept the $25,000 surplus representing the value of Tyler’s equity.
Tyler challenged the county’s retention of the surplus in federal court, claiming that the county violated the Fifth Amendment of the U.S. Constitution, which prohibits governmental takings of private property without just compensation, and the Eighth Amendment of the Constitution, which prohibits governments from imposing excessive fines. The district court dismissed her suit, and the appeals court upheld the dismissal. The Supreme Court agreed to hear Tyler’s case.
Citing the Magna Carta and the Fifth Amendment of the Constitution, the Supreme Court’s nine justices unanimously agreed that the county’s retention of the $25,000 surplus violated Tyler’s Fifth Amendment rights. Two justices went further in a concurring opinion, labeling the county’s action as an imposition of an excessive fine in violation of the Eighth Amendment. The other justices declined to rule on the Eighth Amendment issue, believing that the Fifth Amendment gave Tyler sufficient grounds to prevail.
Parallels to Bay State Foreclosure Rules
Massachusetts’s tax foreclosure procedure is similar to Minnesota’s. The Massachusetts statute provides that if delinquent real estate taxes are not paid within 14 days after the municipality’s demand, the tax collector may proceed to take the land for the municipality. Delinquent taxes initially accrue interest at 14 percent per year. If the taxes are not paid within 14 days after the collector notifies the taxpayer of its intention to do so, the collector may take the property and record a notice at the local registry of deeds.
After the taking, the interest rate on the delinquent taxes jumps to 16 percent per year. The collector does not need a court order to effect the taking. After the taking, taxpayers have a right to redeem the property by paying the taxes and interest, and taxpayers usually continue to possess the property, until their right of redemption is foreclosed.
To foreclose the taxpayer’s right of redemption, the municipality must file a foreclosure action in Land Court. The taxpayer’s right of redemption continues until the Land Court enters a final foreclosure judgment. If the taxpayer fails to redeem before the judgment, the municipality gains full value of the real estate, and the taxpayer retains nothing and forfeits the value of its equity. The statute lets taxpayers petition the Land Court to vacate the foreclosure judgment for up to one year after its entry, but judges have discretion to grant or deny such petitions.
The situation in Massachusetts is exacerbated when municipalities deal with private investors such as Tallage LLC, which uses subsidiaries to acquire tax titles and then foreclose on taxpayers’ rights of redemption. Registry of Deeds and Land Court records reveal that Tallage routinely purchases tax titles, secures foreclosure judgments from the Land Court, and sells the foreclosed properties in private sales for more than the amount of the delinquent taxes. The Tyler decision may end this questionable practice, which some have called “equity theft.”
In light of the Supreme Court’s Tyler decision, Massachusetts’s tax lien foreclosure procedures are difficult to defend. If the Massachusetts legislature does not change them, state or federal courts probably will.
Property Owners Subject to Septic Upgrades
By Christopher R. Vaccaro
Special to Banker & Tradesman
Changes are coming to regulations affecting wastewater management on Cape Cod and southeastern Massachusetts, but the scope of these changes and their potential impact on property owners are still taking shape.
The Massachusetts Department of Environmental Protection is responsible for regulating private on-site sewage disposal systems, commonly known as septic systems. For decades, DEP has regulated septic systems through Title 5 of the State Environmental Code. Conventional septic systems collect wastewater in watertight septic tanks where solids, grease, and fats are separated from liquids, and partial treatment of solid waste occurs. Liquids are then distributed over subsurface leaching fields, where microbial action removes some pollutants before the liquids seep into the soil and groundwater.
Nitrogen, usually in the form of ammonia, is a major pollutant found in wastewater. Septic systems are designed to use bacteria to convert nitrogen compounds into harmless nitrogen gas, a relatively inert molecule that is the primary component of the earth’s atmosphere. However, conventional septic systems only reduce nitrogen pollution by an unimpressive 5 to 10 percent. The untreated pollutants seep into the groundwater, and often into nearby wetlands. The results of incomplete pollutant reduction are notable on Cape Cod, where water quality in many harbors, estuaries and marshes is already significantly degraded, and getting worse.
To address this problem, DEP seeks to enhance pollution prevention standards on septic systems serving Cape Cod and southeastern Massachusetts, by amending Title 5 and adding new watershed permit regulations. DEP’s initiative would identify watersheds vulnerable to nitrogen pollution, and designate them as “nitrogen sensitive areas”
(NSAs). DEP has not completed its designation of NSAs, but towns on Cape Cod from Bourne to Orleans would certainly have NSAs, and much of Martha’s Vineyard, Nantucket and the western shore of Buzzards Bay would likely be included. DEP’s proposed amendment to Title 5 would require all septic systems located in NSAs, including existing systems, to be upgraded to employ “best-available nitrogen-reducing technology” within five years.
However, if a community obtains, or files a notice of intent for, a “watershed permit” from DEP, the community’s property owners would be exempt from the upgrade requirement.
Expensive New Technology Required
DEP’s website offers helpful information on different kinds of septic systems that use the best available nitrogen-reducing technology, or BAT, for short. BAT systems can reduce nitrogen pollutants by over 70 percent, a significant improvement over the lackluster performance of conventional systems.
But BAT systems are expensive, and may cost over $35,000 each. If thousands of property owners are required to install BAT systems, the overall financial burden would be exorbitant. Whether there are enough qualified professionals available to complete thousands of upgrades within five years is questionable. The upgrade mandate would also likely have an adverse effect on construction and housing costs on Cape Cod. State government would probably have to create new funding sources and loan programs for property owners to pay for upgrades.
DEP is sensitive to these concerns. The proposed regulations would offer communities a way to shift the upgrade requirement from individual property owners to the community in general, using watershed permit regulations. Under DEPs proposed regulations, communities could seek a 20-year permit to implement long-term wastewater planning for entire watersheds. This would give communities time to develop innovative approaches to better wastewater management, including possible expansions of public sewer systems. Individual property owners would not be required to upgrade their septic systems during the 20-year period that the watershed permit is in effect.
Communities seeking watershed permits would be expected to commit to wastewater management plans demonstrating that at least 75 percent of the necessary pollutant reduction levels would be achieved within 20 years. Those communities would have to provide annual progress reports to DEP, and implement adaptive management programs to produce the necessary reductions. If a community fails to satisfy the requirements of its watershed permit, DEP could terminate or revoke the permit and reimpose the Title 5 upgrade requirement on individual property owners. DEP’s initiative is clearly intended to encourage communities to take a holistic and proactive approach to wastewater treatment in NSAs, so individual property owners are not saddled with upgrade costs.
DEP held public meetings last year and in January seeking comments on its proposed regulations. While many participants at those meetings expressed concerns about upgrade costs, many others supported DEP’s efforts to improve water quality on Cape Cod. The time for comments is now over, and Cape communities will soon learn what will be expected of them to achieve that goal.
Trusts used to be for the richest of the rich. Now it seems like everyone has a Trust. So what is it? Trust me (!), the term “Trust” even intimidates law students. But the idea is actually quite simple.
History of a Trust
Trusts were invented 500 years ago by English noblemen who had wayward children. When a nobleman (called the GRANTOR in Trust-speak) died, he would leave his property to a trusted friend – often the family lawyer (the TRUSTEE) – instead of leaving it to the wayward children. The Trustee signed a written promise not to use the property for himself. Sure, he was paid a fee. But he had to use the property for the wayward children (known as the BENEFICIARIES). And the Trustee had to follow RULES left behind by the nobleman. For example, the rules might say “pay for my wayward son to go to knight school (get it? “knight school!), but don’t pay his gambling debts.”
So really, what is a Trust?
So a Trust is a written arrangement among a grantor, a trustee and a beneficiary. The Trust has legally enforceable rules and it applies to certain property.
Note that a Trust is essentially doing the same thing that a Will would do – leaving the nobleman’s stuff to his wayward children. So a trust is an alternative to a Will.
Over the centuries years, clever lawyers have figured out all sorts of bells and whistles that make Trusts more attractive than Wills. We know that a Trust can protect assets from your kids’ gambling losses. Your Trust can also protect your assets from your kids’ divorces and lawsuits. Your Trust can shelter assets from estate taxes and avoid probate. A Trust can include special plans for underage children or disabled adults. Your Trust can set aside funds for your grandchildren’s college tuition.
And over time, Trusts have become simpler, less restrictive, easier to change and less expensive to create.
Our Estate Planning Attorneys can tailor a Trust to your family’s needs. The first consultation is always free of charge.
It can be daunting when a loved one requires facility or skilled nursing care. Even more intimidating is the price tag that comes along with it! Since the month of May is designated as National Elder Law month, we are doing our part to educate seniors and their loved ones on Medicaid (here in Massachusetts, called “MassHealth”) eligibility rules and strategies to save assets from government liens and/or reimbursement.
Understanding Medicaid
Medicaid is a federally funded program to assist seniors paying for long-term skilled nursing care, and each state is allowed to put eligibility restrictions in place for the benefit. To make matters more confusing, there are different rules for individuals (single persons, widows and widowers, unmarried cohabitants) and married persons. Working with a general practitioner or an estate planner not well versed in this field could be detrimental and financially harmful for your family as there are various asset and income restrictions (depending on which program you are applying for), a five-year lookback rule and various transfer consequences to be mindful of.
We develop a personalized approach to Long Term Care
Similar to our estate planning approach, we know that long-term care planning is not ‘one size fits all’. We will meet with you to hear your specific concerns, learn about your assets, and help devise a customized plan to protect your assets and spend down your resources.
We have successfully helped families protect and preserve their legacy, all the while maintaining a level of control and use of the assets our clients are comfortable with.
Reach out for a copy of our current MassHealth Eligibility Factsheet and to schedule a meeting with one of our attorneys to learn more about your available long-term care planning options.