Managing the Probate Process Through Careful Planning

Managing the Probate Process Through Careful Planning

By Eric P. Rothenberg, Esq.

We all work hard throughout our lives with the expectation we will be able to leave an estate to our children and heirs. Too often however, we fail to take the necessary steps to preserve our wealth and our heirs are left to deal with Massachusetts probate. Fortunately, the Massachusetts law regarding probate has been simplified over the last few years, but there are still some steps you can take to ensure your assets are divided up per your wishes and avoid probate.

Your retirement accounts
Fortunately, most financial institutions require retirement account owners to specify a beneficiary when they open their accounts. However, you may find it to be more flexible to have your estate be named and not necessarily your spouse or children because inherited retirement accounts are taxed to the recipients as income even though they go through your estate and there are choices that can be made through the will, and not by naming a beneficiary. it is also important to verify the beneficiary after a divorce, death of a spouse or other life changes if you don’t name your estate as the beneficiary.

Other financial assets
There are a number of ways you can ensure your assets are divided up per your wishes while you are still alive including:

  • Stocks/bonds/mutual funds – there are two options for transferring these assets to an heir upon your death. One way is to jointly register assets using joint tenants with rights of survivorship where the ownership automatically transfers upon your death. A second method is using what is known as a “transfer on death” option which will require the designee to provide a copy of a death certificate and a letter of instruction for the new registration. The first method has no tax effect and all of the income is still reported by you even though title is now in joint names. And it’s not considered a gift either.
  • Real estate – generally it is most beneficial to put real estate in two names ensuring the other person automatically gets ownership in the event of your death. Other options do exist however including a living trust that designates the disposition of assets. These can be done tax effectively too.
  • Personal belongings – items such as jewelry, art and other personal belongings can be bequeathed with a will to the respective parties. This can prevent squabbling between family members and other loved ones.

Most of us have very specific ideas about how we would like to see our assets and possessions dealt with when we pass away. It is imperative to speak with an attorney who understands Massachusetts probate law to help you with your estate planning. This will allow you to have the final say as to the disposition of your assets.

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