Estate Planning


Estate Planning Representation from Germani & Germani Law Offices

Estate Planning

Everyone needs an estate plan. It does not matter if your estate is small or large, an estate plan is necessary.

One reason that you should have an estate plan is to make sure that your assets go to whom you want. In addition, you will be avoiding probate, which is both expensive and takes a long time. Another advantage to an estate plan is that you will be able to choose who will be a guardian to your children.

The first step in Estate Planning is to identify what you would like your ultimate outcome to be and what your financial goals are. Do you wish to avoid probate? Avoid Estate Taxes? The answers to the following questions can help you to begin the process.

What is Probate?

Explanation of Probate.

Probate is a Court process that requires the filing of your Will with the appropriate Probate Court when you die. The Court process involves the determination by the Court tha the Will presented is valid and whether the persons (beneficiaries) named in your Will shall receive the share you have designated. This process takes at least one year from the date of death. This Probate process can be avoided by the joint ownership of assets or where a beneficiary is named, such as life insurance, IRAs, and pension plans. Also, the transfer of assets to a Living Trust prior to death avoids Probate, your assets being controlled by the Trust Agreement

What are the Estate taxes?

Estate (death) taxes Explained.

This is a tax that may be imposed on an estate by the State or Federal government. It is a tax on the transfer of assets at death to your heirs or named beneficiaries. All of your assets are subject to this tax, whether the asset is jointly held, life insurance proceeds (unless the policy is owned by an irrevocable insurance trust), any assets with a named beneficiary, such as certificates of deposit and the like. The State and Federal governments do provide for exclusion amounts which depend on the year of death and the whim of the legislatures at any given time.

Can these be Avoided?

Using a Trust to avoid Probate/ Estate (death) taxes.

If the assets are in a trust, whether a revocable or irrevocable trust, there is no requirement to probate those assets. While you are alive you or your spouse may be the primary trustee of the Trust with full control over the assets. Upon death, the Trust names a person who will act as a successor trustee with power to manage your assets according to your instructions set forth in the trust documents. Also, should you become incapacitated, the trust would provide for the successor trustee to manage your assets according to the trust provisions. Thus, you avoid the need for a guardian or conservator. All of this can be done without reporting to a Probate Court and in private

As part of your estate plan, you may require one or a combination of the following types of Trusts.

Once we have determined the proper course of action for your own unique Estate Plan, we will determine which specific documents best fit your situation, and should be prepared on your behalf. An estate plan requires the preparation of many documents, some of which are as follows.

Creating a Will

Everyone needs a Will. You need to determine who will take your property and when they will receive it. If you do not have a Will the State will determine who will receive your property. You can specify in your Will when you want a certain person to receive his/her share. You can designate who will administer your property after you die. That person is called the "Personal Representative" (Executor). You can name a person who will raise your children (Guardian) and/or a person who will take charge of your assets (Trustee). A Will can be changed or revoked at any time, as long as you are competent. A Will can be changed by the execution (signing) of an amendment (Codicil). Persons you name as your Personal Representative, Guardian, or Trustee should be trustworthy, have good financial judgment and business sense.

Types of Trusts

A Revocable Trust can be changed at any time, avoids probate in the assets held by the trust, and is the most simple type of trust. However, the benefits of a revocable trust are limited.

An Irrevocable Trust cannot be changed. If assets are transferred to an Irrevocable Trust, so that the assets are no longer available to the Grantor, the assets in the trust will be protected from the nursing home (after 5 years); the assets will avoid probate, the stepped-up basis of the property is available; income tax reporting by you is the same, and the capital gains exclusion may still be available to you as grantor. Although you may not have control over the assets in the trust in the sense that you are not able to access principal, you may receive any income generated by the trust assets, you may borrow against the trust assets, and the assets are protected from creditor claims, assets in an irrevocable trust may not be considered marital property for division in the event of a divorce and assets in an irrevocable trust may not affect qualifying for college financial aid.

Proper advance planning by the use of trusts, spend-down strategies, and the disabled and caretaker child exceptions are available to establish Medicaid eligibility.

The primary purpose of a medicaid qualifying trust is to protect the assets from nursing home care. There is a five-year (5) look-back period that is covered by a Medicaid application. With respect to Medicaid, there are distinct transfers of asset rules. If the transfer of assets was before February 8, 2006, the period of ineligibility begins on the first day of the month in which the property was transferred. For example, if a client transfers property with a fair market value of $50,000.00 to his or her child, he or she will be ineligible for MassHealth, for the subsequent 182 days ($50,000.00 divided by $274.00 = 182.48).

There are look back periods that authorize the MassHealth agency to review an applicant's financial statements and take into account any transfers made during the 60 months prior to the date of application.

Where the transfer was on or after February 8, 2006, there is a different rule. The length of ineligibility is calculated the same as stated above. However, the major difference is that the ineligibility period does not begin until the first day of the month in which the resources were transferred for less than fair market value or the date in which the individual is otherwise eligible for MassHealth payment of long term services, whichever is later. That is why it is very important when someone makes application for Medicaid - equally important is the cut off dates referred to above, with respect to transfer of any assets.

We are very familiar with the medicaid application process and we will review any transfer of assets that you may have made in the past in order to determine if there is a period of ineligibility. We stress asset protection. We will explain to you the community resource allowance. We will also discuss the spend-down of assets and the allowable ways to reduce your assets. We will touch upon the appeals process, in the event of a Medicaid denial.

All transfers for less than fair market value are reviewed by the Long Term Care facility, located in Taunton, Massachusetts, and all Medicaid determinations are issued from that office. Should the initial application be denied, it is often necessary to appeal the decision and re-submit the Medicaid Application. Once we prepare the initial application, should it be denied, we continue through with the process until completed.

In addition to the Revocable and Irrevocable Trusts, there are also the following types of Trusts:

Realty Trust - which holds title to real estate and basically takes it out of your name for the purposes of an estate plan.

Nominee Trust - which basically holds other assets such as bank accounts and stock in the name of the nominee trust. Many of these documents are prepared for the purpose of keeping the main trust document private.

Life Insurance Trust - holds any life insurance that you may have and keeps the life insurance proceeds outside of your estate. This is very important where your estate exceeds the exemption for estate tax purposes. The life insurance trust, if properly prepared, removes from your gross estate, any life insurance proceeds. A lot will depend on whether or not your gross estate exceeds the current exemption in Massachusetts.

By-Pass Trust - Alternatively, if your primary purpose is to save or avoid estate taxes at the time of death, we will explore the use of a By-Pass Trust.

Other documents that we prepare as part of your estate plan are:


- which appoints someone to make financial decisions for you if you are unable to.


- which appoints someone to make health care decisions for you if you are unable to.


- which allows your family, doctors, and other health care providers, to know your wishes for medical treatment at the end of your life, and allows you to die as you wish.


- which tells doctors and all health care providers who they are allowed to release medical information to.

There are many other facets to estate planning. As each person's situation is unique, each person's plan is unique to them, and therefore, after careful consideration, research, and discussion, each estate plan is prepared and tailored to each unique client. We will discuss nursing home options, short-term or long-term care, private pay or Medicaid eligible.



One document that most people do not have, but should have, is a "Declaration of Homestead", which, once executed, is filed with the Registry of Deeds where the property is located. The primary purpose of a Homestead Declaration is to provide protection of your home from creditors. Currently, there exists an automatic homestead exemption in the amount of $125,000.00. However, if you record a declaration of homestead in the Registry of Deeds where your home is located the amount of your homestead increases to $500K. Homestead law is complicated and requires careful preparation in order to be effective. For example, the homestead statute requires that both spouses sign a Homestead Declaration, in order for it to be effective. There are many other minute details contained in the Homestead Statute which we will be happy to go over with you.

I would like to also mention that there exists an elderly homestead, where a person is 62 years old or over. If someone is disabled, there also exists a homestead declaration for this reason as well. One can see how complicated the Homestead law is, and does require help from a lawyer who is experienced and knowledgeable in this area.


One other document that should be mentioned is a Life Estate Deed. The primary purpose is to attempt to "protect" your home should you need long term nursing home care. You still have the absolute right to use the property during your lifetime.


Fees for estate planning documents are primarily based on the documents that we are required to prepare for you. After meeting with you in our office, we will be able to provide you with the fee for our services. Our fees are both reasonable and manageable.