People often ask “Why do I need a trust?” Some folks think they can get by with a simple will. Here is why you probably need more than that:
- Estate tax savings. Depending on the size of your estate and your state’s tax laws, there may be a significant tax advantage to including trusts as part of your estate plan.
- Probate avoidance. If you fund your trust during lifetime, you will avoid probate. Avoiding probate means your family will not have to go to court to authenticate your will after your death in order to access your assets. It saves time and money.
- Planning for incapacity. Another benefit to funding your trust during life is that your successor trustee can access the assets for your benefit if you become incapacitated. If you are in the hospital or a long term care facility, who will pay your bills and manage your assets? If your trust is funded, the successor trustee can do that. Otherwise, your family may have to go to court to have a conservator appointed to oversee your assets.
- Limiting children’s access to their inheritance. If you have minor children, you want to make sure their inheritance is
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According to the Massachusetts divorce statute:
Judgments of divorce shall in the first instance be judgments nisi, and shall become absolute after the expiration of ninety days from the entry thereof, unless the court within said period, for sufficient cause, upon application of any party to the action, otherwise orders.
A “judgment nisi” means a judgment that comes into effect on a specified date unless within a certain time period cause is shown why it should not go into effect. For spouses getting divorced in Massachusetts, the nisi period results in the parties remaining married for 90 days after the Judgment of Divorce is issued. So what exactly is the reason for the nisi period?
The nisi period is a waiting period designed to allow parties to change their minds about the divorce, even those who have gone through protracted litigation and a trial. For couples who file an uncontested Joint Petition for Divorce pursuant to G.L. Chapter 208, Section 1A (instead of a contested action initiated under Section 1B), there is an additional 30 day waiting period between approval of their settlement agreement and the issuance of the Judgment of Divorce, elongating the wait to be single to … Keep reading
The First Crime in Space! Recent headlines from The New York Times and other prominent news agencies drew in readers stating that the first crime in space had allegedly been committed. The articles went on to discuss the thorny privacy and jurisdictional issues given that NASA was involved and the crime was purported to have occurred on the International Space Station, where astronauts from the United States, Russia, Japan, Europe and Canada orbit the Earth. At its heart, however, the supposed first crime in space is a bitterly contested domestic relations matter involving income, assets, custody of a child, and de facto parent status.
Summer Worden and Anne McClain (a decorated NASA astronaut who was tapped for the first all-female spacewalk, and is in consideration to be the first woman on the moon) were married in 2014. Ms. Worden has a son, who was born approximately one year before the parties met.
By 2018, the parties’ relationship had broken down, and Ms. McClain, who had no legal status as a parent to Ms. Worden’s son, approached a Texas Court asking for shared parenting rights to the child and “the exclusive right to designate the primary residence of the child.” … Keep reading
On July 8, 2019, the Massachusetts legislature approved changes to the law surrounding orders for health insurance coverage in cases where child support is ordered. The statutes impacted include G.L. c. 208 (the divorce statute) and G.L. c. 209C (for children of unmarried parents). The law, entitled An Act Making Appropriations For The Fiscal Year 2019 To Provide For Supplementing Certain Existing Appropriations And For Certain Other Activities And Projects, provides for, among other things, the following:
- If the Court enters a child support order, either parent may be ordered to maintain health insurance coverage for a child if such coverage is available at reasonable cost and is accessible to the child. Under the previous law, only the parent paying child support could be ordered to maintain coverage for a child, unless the parties otherwise agreed.
- Health care coverage is deemed to be reasonable in cost if the cost to the party ordered to provide health care coverage does not exceed 5% of the gross income of that party. Further, private health insurance shall be deemed not available at reasonable cost to a parent whose gross income does not exceed 150% of the federal poverty guidelines for the family
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As you know from my prior posts, I appreciate the interplay between divorce and estate planning. I enjoy working on cases where both worlds collide, and have been fortunate to be involved in some very interesting cases, which have involved irrevocable trusts.
A common misconception relating to irrevocable trusts is that they can’t be altered. This is not actually the case in many circumstances, and is important to remember, especially when family circumstances change, such as when a divorce arises.
A trust is irrevocable because either the donor (the person who established the trust) has died, or because the trust’s terms make it irrevocable. Changing an irrevocable trust can sometimes be done through a process known as decanting. When a trust is decanted, it is replaced by a new trust and the assets of the original trust are transferred to a new trust.
The Rhode Island decanting law lays out some specific requirements for an irrevocable trust to be decanted. Some of those requirements include the following. First, the terms of the original trust must allow for the trustee to make principal payments to one or more beneficiaries. Second, the trustee must exercise the power to decant via a … Keep reading
Ah, home sweet home. Home is your happy place where you can rest and unwind. It is the place you selected to start your family and where you and your family make memories. There is justifiably so much sentimental value tied up in the marital home, which is why deciding on the final disposition of the home is one of the most daunting, but important decisions to make during the divorce process.
If you’ve owned a home in Massachusetts for more than a few days, chances are that it has gone up in value since you purchased it. Massachusetts has seen its median sale price for homes skyrocket by over twenty percent in the past five years, with total appreciation rates of nearly thirty percent during that same period. So, in addition to that sentimental value, it is also likely that your home has a lot of market value, which can be both a gift and a curse in the context of a divorce proceeding. Sure, more money is great, particularly when each party is (in)voluntarily reducing her/his total net worth by roughly half in the divorce, but these high values of real estate often dwarf the rest of … Keep reading
The federal estate tax (sometimes called the death tax) is a one-time tax that is imposed at death. If you die with a certain dollar amount of assets, an estate tax return may be required and a tax may be due. If a return is required, it is due 9 months after the date of death.
Sometimes clients confuse the estate tax with an income tax, but it is not a tax on income. It is a transfer tax. Essentially, it is a tax on the wealthy imposed at death.
When does it apply?
In 2019, a federal estate tax is due for all estates with assets of $11,400,000 or more. If you die with a gross estate under $11,400,000, no estate tax is due. If your gross estate is over $11,400,000, you pay a tax on the overage. In general, the tax rate is between 18% and 40%, but it gets to 40% pretty quickly.
The large exemption amount is due to the recent changes in the tax laws that took effect in 2018. The federal estate tax amount used to be $5 million adjusted for inflation. It is now $11 million adjust for inflation so it increases … Keep reading
In addition to irretrievable breakdown the marriage, which I explored in my last post, a party seeking a divorce in Massachusetts can do so under one or more of the fault grounds, which require proof of specific facts to warrant a divorce.
The fault grounds under M.G.L. c. 208, sec. 1 and 2 are:
- Cruel and abusive treatment – To be granted a divorce on the grounds of cruel and abusive treatment, a spouse must prove that the other party acted with such cruelty as to cause injury to life, limb or health, or to create a danger of such injury, or to create a reasonable apprehension of such danger. Cruel and abusive treatment can be found based solely on the use of cruel and abusive words if those words create a reasonable apprehension of violence, or tend to wound feelings to such a degree as to affect the health of party, or create a reasonable apprehension that a party’s health might be affected. Cruel and abusive treatment is an often cited ground for divorce.
- Adultery – Unlike cruel and abusive treatment, seeking a divorce on the grounds of adultery is not seen often. The reason is that
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As we enter the “dog days of summer” and New England braces for a serious heat wave over the next few days, I can’t help but think about the importance of summer parenting plans. Summer is when most parents try to maximize the time they spend with their children. Free from the demands of school, homework, and most extracurricular activities, summer is an optimum time to enjoy quality time with children, especially school aged children. I recently saw a quote that said “there are only eighteen summers in childhood . . . How will you make this one count?”
As summer time with children is so fleeting and precious, summer parenting time can become a hot button issue in a divorce. When crafting a summer parenting plan, the best interest of the children should be at the forefront in setting the parenting schedule, and this generally entails maximizing the children’s time with both parents.
Summer parenting plans can take on many different forms. Some parents share time equally in the summer with their children. Some parents continue to observe the school year parenting plan with slight tweaks to allow for long weekends or vacation weeks. There are a myriad … Keep reading
To the recent high school graduates from the class of 2019, congratulations! For the parents (particularly divorced or divorcing parents) of the recent high school graduates from the class of 2019, I hope you’ve saved some money.
High school graduates are going off to college at increasingly high rates. Unfortunately for parents and students, the cost of tuition, room, and board for colleges and universities has skyrocketed within the past decade. Some schools are now topping out at a whopping $70,000 per year for these costs. I apologize in advance to our readers who expected a quip about the recent college bribery scandal; as a proud alum of the University of Southern California (was not on the crew team), I will limit this discussion to the publicized retail cost of colleges and universities. Go Trojans!
For family law attorneys, the issue of college costs is invariably at the forefront of our minds when dealing with any case involving children of college age and younger. Even divorce agreements in which a child is only a toddler will often mention at least some aspirational language regarding the parents’ mutual desire. Such as for little Jimmy to “have the opportunity to attend … Keep reading