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Amesbury, MA 01913
Legal Services

Estate Planning

We assist clients with understanding what their plans are with respect to their Massachusetts or New Hampshire property (as well as property in other states); both from the point of view of who will get their property and how their assets (usually money, securities and real estate) can be preserved with appropriate planning. Attorney O’Leary will focus on what you need to accomplish your wishes. This may involve a simple will or a more comprehensive estate and tax plan that may include trusts. The important thing is that Attorney O’Leary works for you and he will work hard to provide you with a specific estate and life plan that meets your specific needs and objectives. Attorney O’Leary has more than twenty years’ experience helps clients though the Probate Court Administration process.

          A Trust may be advisable in your situation and is often a more suitable way to plan your estate than a Will.  A trust you is used to provide a method of distributing assets for your care and, after death, to distribute those assets in accodance with your wishes. It is an instrument that can provide flexibility to you in deciding what the heirs shall receive over a period of time and a trust can limit the giving of substantial assets in an unrestricted manner.

          A trust is a legal form or ownership of money or real estate from an individual to a trustee who holds, manages and distributes the property for the beneficiaries of the trust.  The written terms of the trust control the use and distribution of the property.

          The probate process controls the transfer of assets from someone who has died, to those still living.  The probate process ensures that the assets go to the people named in a Will, or to those who are to receive them by law when there is no will.  This process only transfers assets that the deceased person owned solely in his own name.  The process does not handle property not owned by the individual.  Trust property is "owned" by the Trustee.  All property owned by a trust is handled by the trustee according to the terms of the trust, and does not go through the probate process.

          Certain tax planning advantages may be available with a trust. For instance, a common use for a trust is to “shelter,” or make use of, the Federal estate tax credit.  Each individual can shelter up to a certain sum annually from estate taxes.  A couple can also shelter money provided they both fully use their estate tax credit.  If one spouse leaves everything to the other outright the credit is lost.  Although no tax would be due upon the death of the first spouse, when the second spouse dies, there may be a large estate tax due.  Instead each spouse could leave up to $2,000,000 to a bypass trust and the rest to the other spouse.  The trust can be designed to pay income to the surviving spouse, and even allow some access to the principal.  Use of two estate tax credits rather than one increases the amount exempted from tax and thus reduces estate taxes.

          The assets of a Revocable Living Trust are "countable" for Medicaid purposes, and will not be shielded from nursing home costs.  Your primary residence is not a countable asset for determining Medicaid eligibility.  However, if your home is placed in a trust, it becomes countable, and may make you ineligible for assistance.  An Irrevocable Income Only Trust is sometimes used for Medicaid planning purposes.

          An Irrevocable Income Only Trust is a type of trust that may be used for Medicaid planning.  The assets of the trust are considered non-countable for Medicaid purposes and are protected for the next generation.  The general terms of such a trust are that the grantor gives up all rights to the principal assets of the trust, but reserves the right to all income generated by those assets.  If real estate is owned by the trust, the creator reserves the right to use and live in that real estate.
          This type of trust provides flexibility because real estate can be sold, and a new home purchased by the trustee, while keeping the principal assets protected.  In contrast, with a life-estate deed, any sale of the real estate will return principal to the life-estate owner and those funds will not be protected.

          Being an irrevocable type of trust, you cannot change your mind later.  Once you transfer assets to the trust, you can never get them back.  Without a Trust, you can sell your home and use the money for a trip around the world or the monthly fee at a retirement home, and you may spend it or give it away as you want.  Once you transfer an asset to an Irrevocable Trust, your use of that asset will be restricted forever. What you gain, of course, is the assurance that your chosen heirs (the future beneficiaries of the trust) will inherit the asset, and it won’t have to be sold and spent on your nursing home care.

          The transfer to an irrevocable trust will result in a disqualification of up to five years from receiving Medicaid benefits, so it should only be used when a nursing home stay is relatively unlikely in the next five years top.

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