Your Assets and Your Estate Plan

Developing an estate plan commonly means working with a qualified estate planning attorney to develop and implement legal documents to further asset protection and legacy goals. Estate planning also includes working with your attorney to analyze your assets, and how each type of asset you may own potentially affects you and your estate plan.

While there is never a “one-size-fits-all” option for estate planning, estate planners can help clients to minimize probate, estate tax, and long-term care concerns, quell issues relative to family dynamics, and offer peace of mind to their clients.

Your estate is comprised of every asset you own, either individually, or with other people. Every type of asset has its own character, and planning techniques can vary based on what your asset is and how it is owned.

There are two major misconceptions amongst clients who are beginning the process of developing an estate plan. First, it is often believed that having a will in place “avoids probate.” This is incorrect. A will is merely a set of instructions for the probate court, and your Personal Representative (formerly known as “Executor”), to follow. The will is not operative until it has been submitted to, and approved, by the probate court, in a process known as probate.

The second common misconception is that an estate is controlled entirely by a will. In reality, only “probatable” assets are controlled by the will. In simple terms, a probatable asset is any asset an individual owns in their name alone when they pass away.

Non-probatable assets are not controlled by the will, rather they pass by operation of law, and are not subject to probate. Non-probatable assets include assets held in trust, assets with joint owners, and assets with transfer-on-death or beneficiary designations. Even if a will devises a non-probatable asset to an heir, the beneficiary designation, joint ownership, or trust, will take precedence over the will.

Complications can quickly arise for estates due to assets unintentionally being titled in a way that avoids, or requires, probate. Working with an attorney to determine how assets are owned and if the ownership and beneficiaries are up to date is an essential component of the estate planning process.

For instance, adding a child as a joint owner on an account leaves that account vulnerable and subject to any potential creditor issues, bankruptcy, or divorce that child may experience, after all, your money is their money now. Additionally, that child would inherit that asset unto themselves and not be required to distribute any of the funds to siblings or other heirs.

Issues may also arise with beneficiary designations. Failure to add contingent beneficiaries on policies, not updating beneficiaries to reflect changes in family circumstances, such as a marriage or birth of a child, can all cause unintended or inequitable distributions inconsistent with the intent of the decedent. Massachusetts automatically revokes an ex-spouse as beneficiary under policies, but if the financial institution was unaware of the divorce, they may distribute the funds to an ex-spouse, leaving a decedent’s family with a long and expensive legal battle to recoup the funds.

Tangible property, such as jewelry, furniture, pictures, etc. should also be specifically listed if there is not agreement within the family. Often, a contest develops when the heirs cannot decide on the distribution of these assets, so be sure to be clear on ‘who gets what’….

Deeds should also be reviewed to ensure the ownership of property reflects intent. Property owned by one spouse will require probate if the other spouse’s name does not appear on the deed. Further, even if both spouses are named as owners, the tenancy, or the way in which the ownership is defined, may not reflect to wishes of the parties, and may lead to unnecessary probate proceedings.

Blended family situations can be especially precarious when preparing an estate plan, as, without a will in place, a second spouse may not be entitled to the entire estate of their predeceased spouse, forcing the sale of the martial home, or children from previous relationships may be unintentionally cut out of their parent’s estate.

Changing the character of ownership of an asset can also have serious capital gains and estate tax consequences. It can also significantly affect eligibility for long-term care assistance for five years from the date of transfer.

There are many ‘do it yourself’ wills or on-line documents that may be obtained.  Many do not conform to the requirements of a valid will in Massachusetts, and often, the documents are not completed properly or signed in accordance with the law, so these attempts to write a will are deemed invalid.

Depending on the nature and character of your assets, an experienced estate-planning attorney can work with you to develop strategies to avoid probate, without conflicting with other estate planning objectives, like limiting liability for Massachusetts Estate Tax and long-term planning for nursing home care.


Amanda R. Carpe, Esq.