Massachusetts Financial and Estate Planning Lawyer

What is the legal side of financial planning?

Financial planning is often thought of as saving and investing. But how your property is owned, and who is named to receive it, often matters as much as how much you have. A well-funded retirement account can still go to the wrong person if the beneficiary form is out of date. A home can still end up in probate if the deed was never changed. A trust can fail to do its job if nothing was ever put into it.

Our role is legal, not investment advice. We do not sell financial products or recommend investments. We review how your property is owned and who receives it, prepare the documents that control it, and work alongside your financial advisor, accountant and insurance agent when you have them.

How your property actually passes

Many people assume their will controls everything. In reality, much of what people own passes outside the will:

Because of this, an estate plan is only as good as the account titles and beneficiary forms that go with it. A legal review brings all of these pieces into line.

Beneficiary designations

Beneficiary forms are among the most overlooked documents in a family’s finances. Common problems include:

• An ex-spouse still named on a retirement account or life insurance policy
• A deceased beneficiary with no backup named
• Minor children named directly, which can require a court-appointed conservator to manage the money until they turn 18
• “My estate” named as beneficiary, which can send the money through probate and change how it is taxed
• A family member with a disability named directly, which can affect their eligibility for public benefits
• Forms that conflict with the will or trust, leaving one child more than another by accident

We review your beneficiary designations as part of your plan and explain whether a person, a trust, or a combination should be named.

Retirement accounts

Retirement accounts are often a family’s largest asset after the home. Federal rules now require most non-spouse beneficiaries to empty an inherited retirement account within ten years, which can create a large income tax bill for children in their peak earning years. Spouses, minor children of the account owner, beneficiaries with disabilities or chronic illnesses, and certain others have different rules.

Planning choices include:

• Naming a spouse first and children as backups
• Using a trust as beneficiary when a child is young, has a disability, or should not receive a large sum outright
• Coordinating beneficiaries with the rest of the plan so each child receives a fair share after taxes

We work with your accountant or financial advisor on the tax side, and prepare the trust language when a trust is the right beneficiary.

Life insurance

Life insurance can provide for a spouse and children, pay estate expenses, or equalize an inheritance when one child receives a family home or business. But a policy you own is counted in your taxable estate. Massachusetts taxes estates of more than $2 million, and a large policy can push an estate over that line.

An irrevocable life insurance trust can own the policy so the proceeds stay out of your taxable estate and are managed for your beneficiaries under your instructions.

Massachusetts estate tax

Massachusetts has its own estate tax, separate from the federal estate tax. Massachusetts estates of more than $2 million may owe state estate tax. The value of your home, retirement accounts, life insurance and other property counts toward that total, even property that passes outside probate. The federal estate tax applies only to much larger estates.

Married couples can often reduce or avoid Massachusetts estate tax with planning, such as trusts that make use of each spouse’s credit, instead of leaving everything outright to the surviving spouse. Lifetime gifts and certain trusts can also reduce the taxable estate. When an estate tax return is required, it is generally due nine months after death.

Your home

For most Massachusetts families, the home is the most important asset, both financially and emotionally. How the deed is written controls what happens to it:

• Sole ownership usually means the home goes through probate.
• Joint ownership passes the home to the surviving owner, but can expose it to that owner’s creditors and can cause problems if the owners do not die in the expected order.
• A trust can avoid probate, plan for incapacity, and, with an irrevocable trust, help protect the home from long-term care costs.
• A Massachusetts homestead declaration can protect equity in your home from many creditors.

We review your deed and recommend changes that fit your plan.

Planning for long-term care costs

Nursing home care in Massachusetts can cost well over $10,000 a month. Medicare covers only a short stay after a hospitalization. For long-term care, families either pay privately or apply for MassHealth, the Massachusetts Medicaid program, which has strict limits on the assets an applicant can keep.

MassHealth reviews transfers made in the five years before an application for long-term care benefits. Planning early, with tools such as irrevocable trusts, gives families more options to protect a home and savings for the next generation.

Planning for incapacity

Financial planning also means planning for a time when you cannot manage your own affairs. Without the right documents, your family may need to ask the Probate and Family Court to appoint a conservator, which takes time and money and requires ongoing court reports.

• A durable power of attorney lets someone you choose manage your finances, pay bills and deal with banks if you cannot.
• A revocable trust lets a successor trustee manage trust property without court involvement.
• A health care proxy names someone to make medical decisions for you.

Life events that call for a review

Your plan should change as your life does. Review your documents, titles and beneficiaries when you:

• Marry, divorce or remarry
• Have or adopt a child or grandchild
• Buy or sell a home or other real estate
• Start, buy or sell a business
• Receive an inheritance or a large bonus
• Retire or change jobs and roll over a retirement account
• Move to or from Massachusetts
• Experience a serious illness in the family
• Lose a spouse or another person named in your plan

Even without a major change, a review every three to five years helps catch outdated beneficiaries and documents.

Blended families

Second marriages and blended families need careful planning. If everything passes outright to a surviving spouse, children from a first marriage may receive nothing if the surviving spouse later changes their own plan. Trusts, beneficiary choices and prenuptial or postnuptial agreements can provide for a spouse during their lifetime while protecting an inheritance for each person’s own children.

Business owners

If you own a business, your plan should address what happens to it if you become disabled or die. That can include a buy-sell agreement among owners, a plan for who will manage the business, life insurance to fund a buyout, and trust provisions that keep ownership in the right hands. We coordinate the estate plan with your business documents.

Families with property in other countries

How the process works

1. Free consultation. We review your family, your goals and a list of what you own and how it is titled.
2. Inventory and review. You gather deeds, account statements, beneficiary forms and existing documents, and we identify gaps and conflicts.
3. Recommendations. We explain the documents and changes that fit your goals, and the cost.
4. Documents. We prepare your will, trusts, power of attorney, health care proxy and any deeds.
5. Signing. You sign with the required witnesses and notary.
6. Funding and beneficiary updates. We give you clear instructions for retitling accounts and updating beneficiary forms, and record any deeds.
7. Coordination. With your permission, we share the plan with your financial advisor and accountant.

Documents to gather

• Your current will, trusts, powers of attorney and health care proxies
• Deeds to any real estate, in Massachusetts or elsewhere
• Recent statements for bank, brokerage and retirement accounts
• Life insurance policies and annuity contracts
• Copies of beneficiary designation forms, or a list of who is named
• Business ownership documents and agreements
• Prenuptial or postnuptial agreements
• A list of your children, grandchildren and others you want to provide for

How we help

• Free consultation. We review your goals and your property, in English, Portuguese or Spanish, and explain the cost.
• Coordinated planning. We make sure your will, trusts, titles and beneficiary forms work together.
• Tax planning. We plan to reduce Massachusetts estate tax, working with your accountant.
• Long-term care planning. We help protect a home and savings from nursing home costs.
• Incapacity planning. We prepare powers of attorney, health care proxies and trusts.
• Reviews. We update your plan when your life or the law changes.

Frequently asked questions

Do you give investment advice?

No. We handle the legal side of planning: documents, titles, beneficiary designations, trusts and tax-related legal planning. We work alongside your financial advisor and accountant.

Does my will control my retirement accounts and life insurance?

Usually not. These pass to the beneficiary named on the account or policy, regardless of what the will says. That is why beneficiary forms must match your plan.

Should I name my children as beneficiaries of my life insurance?

It depends. Naming minor children directly can require a court-appointed conservator. A trust can manage the money for them until they are older.

Does Massachusetts have an estate tax?

Yes. Massachusetts estates of more than $2 million may owe state estate tax, separate from the federal estate tax.

How can a married couple reduce Massachusetts estate tax?

Often through trusts that make use of each spouse’s credit, rather than leaving everything outright to the surviving spouse. The right approach depends on the size and type of your assets.

Should I put my children on the deed to my house?

Often not. Adding children to a deed can expose the home to their creditors, can create tax costs, and can count as a gift for MassHealth. A trust is often a better tool. Talk with us before changing a deed.

How often should I review my plan?

After any major life event, and at least every three to five years.

What if I own property in another country?

That property may follow the other country’s inheritance rules. We help coordinate your Massachusetts plan and tell you when a local lawyer is needed.

Do you work with clients anywhere in Massachusetts?

Yes. Botelho Law Group represents clients across Massachusetts.

Can you help in Portuguese or Spanish?

Yes. Our team includes fluent Portuguese-speaking and Spanish-speaking staff who work with Attorney Botelho.