WHEN SHOULD YOU CONSIDER UPDATING YOUR ESTATE PLAN?

WHEN SHOULD YOU UPDATE YOUR ESTATE PLAN?
Happy Monday to all -- well, it's actually Tuesday, but it certainly feels like a Monday. I've had a few inquiries regarding when client's should consider updating their Estate Plans. Below are a few guidelines which, hopefully, address some of those questions.

It's a good idea to update your estate plan every few years or after the occur...rence of significant life events such as marriage, divorce, the birth of a child, or adoption. Even if you haven't experienced any of these events since you last updated your estate plan, there may have been changes in tax laws or changes in your financial situation that necessitate a reevaluation of your estate plan.

Your desires as far as how your property will be distributed are likely to change over the years, especially as certain events occur in your life. For example, if you get a divorce, you probably don't want to make the same bequest to your former spouse as you did when you were married. In some states, provisions regarding an ex spouse in your will can be disregarded, and the remaining portions of your will followed. In other states a will that is created prior to a divorce will be deemed invalid after the divorce.

The birth or adoption of a child is another life event that will require you to update your estate plan. Even if your will already provides for children, it is a good idea to update it each and every time you have a child.

Other significant events that will require you to update your estate plan are marriage, re-marriage, the death of a beneficiary, and the death of an administrator or executor. Most states provide for a statutory share of the estate that will go to a surviving spouse. If this statutory requirement is not in keeping with your estate planning desires, you will need a to have a valid pre-nuptial or post-nuptial agreement to avoid it.

This becomes particularly important for individuals in a second marriage who have grown children from a first marriage. In this situation, you may want to provide for the comfort of your current spouse during his or her lifetime, but you will want to make sure that your children ultimately inherit your assets. Without proper planning, your current spouse's children could end up inheriting your assets, instead of your own children.

Another thing that tends to change over the years is your financial situation. If your current estate plan was made even a few years ago, your net worth may have changed enough that you will need to incorporate more estate tax planning into your estate plan. Also, tax laws are constantly changing, and some changes may necessitate updating your estate plan.

Finally, you should reevaluate your desires from time to time. You may find that you've changed your mind about a variety of issues addressed by your estate plan. Do you want a different person to be the administrator of your estate, rather than the one who is currently named in your will? Did you grant a health care power of attorney to one of your children and now that child has moved to a different state? Is there something about the way one of your beneficiaries is leading his or her life that would make you want to put their bequest into a trust rather than granting it outright. You may have become aware that one of your children has trouble managing money and you fear their creditors might end up with the inheritance.

If you already have an estate plan in place, you deserve congratulations for planning ahead and being prepared. But you also need to remember to update it from time to time as your situation or needs change.

Please remember that this answer is provided in the spirit of public education, not as legal advice. If you require legal advice for a particular situation, you should consult an attorney.

Spousal Lifetime Access Trusts

In late 2012, a new estate planning strategy emerged - the so-called "Spousal Lifetime Access Trust" (or SLAT for short). The basic concept of the SLAT was relatively straightforward: it would function like a bypass trust, but be funded during life instead of at death, with the intention of using it to take advantage of the then-current $5.12M estate tax exemption before it dropped back to $1M as was scheduled for 2013.Ultimately, the estate tax fiscal cliff didn't happen, but the SLAT remains valid in 2013 and beyond for a new purpose: planning around state estate taxes, and the mismatch between the numerous states that have only a $1M state estate tax exemption and no gift tax, while the Federal gift and estate tax exemptions are at $5.25M. Given this "decoupling" of the state estate tax from its Federal gift tax - and the lack of any state gift tax backstop - couples have a unique opportunity to manage or avoid state estate taxes by creating "supercharged bypass trusts" in the form of SLATs funded during life.The caveat to the strategy is the "reciprocal trust" doctrine, which can cause SLATs to become "uncrossed" and taxable in the original donor's estate. Fortunately, reciprocal trust treatment can be avoided. Unfortunately, though, the rules to avoid reciprocal trust treatment are based on the facts and circumstances of the situation, and consequently a focus for the IRS and estate planning attorneys in the coming years may be figuring out how best to avoid the reciprocal trust doctrine without actually ruining the client's financial and estate planning goals.Nonetheless, though, the reality remains that the SLAT may be increasingly popular in the coming years, at least until states implement a gift tax, recouple to the Federal gift and estate tax system, or just repeal their state estate taxes entirely.

Purpose And Prior Use Of SLATs 

The basic idea of the Spousal Lifetime Access Trust (SLAT) is that it functions similar to a bypass trust, providing access (albeit limited, just as with a bypass trust) to income and/or principal for the needs of a surviving spouse. The difference, however, is that a SLAT is funded via gift while the donor is still alive, as opposed to a bypass trust that is funded by bequest when someone passes away. As with a bypass trust, the SLAT can provide access to just a spouse or a spouse and children, may automatically distribute income or make income distributions discretionary, and may prevent any distributions of principal or also allow principal distributions at the trustee’s discretion (which in turn may or may not be limited to distributions for health, education, maintenance, and support, depending on the trustee). The fundamental goal, similar to a bypass trust, is to get assets into a trust that can still provide some financial assistance to a beneficiary, but done in a manner that those assets - and any future growth upon them - will not be included in the beneficiary's estate.SLATs became especially popular in late 2012 asa vehicle to receive $5.12M gifts from high-net-worth clients who wanted to take advantage of the then-current gift tax exemption which would have potentially dropped down to only $1M in 2013 with the looming fiscal cliff. For instance, imagine a couple that had $20M of total net worth. Under 2012 law, they had combined $10.24M of exemptions, leaving only $9.76M exposed to estate taxes. With the exemption scheduled to fall down to $1M in 2013 though, there was a risk that their estate tax exposure would rise from only $9.76M to a whopping $18M (exacerbated further by the fact that the estate tax rate was scheduled to increase from 35% to a top rate of 55%!). To avoid this result, the couple could each fund $5.12M into a SLAT for the benefit of the other spouse in 2012, reducing their assets outright down to $9.76M and limiting their exposure to estate taxes in 2013. Of course, such gifting would utilize the couple's entire lifetime exemption, but it was viewed as far more favorable to use the whole exemption when it was $5.12M, than wait and risk only being able to use a $1M exemption in the future!

SLATs in 2013 And Beyond

Of course, the need for a SLAT to plan for a potentially-declining estate tax exemption ended with the American Taxpayer Relief Act, which permanently locked in the 2012 estate tax exemption and rate going forward, and won't be necessary again for such purposes until/unless a new law is passed that will definitively schedule the estate tax exemption to be reduced (notably, the President's 2014 Budget did include such a recommendation to take effect in 2018, although it remains unclear whether the proposal will gain any momentum). However, even without a looming decrease in the estate tax exemption, it turns out that under current law there's another popular reason for some clients to consider SLATs: the mismatch between the Federal gift tax exemption and state estate tax exemptions.The issue at hand is that there are still 22 states (soon to be 21) that have a state gift or inheritance tax, but only one of them (Connecticut) actually has a gift tax. About half a dozen have some type of gift-in-contemplation of death rule (which essentially states that gifts made shortly before death will still be included in the decedent's estate as though the gift never occurred), although their rules and details vary. For the rest of the states, there simply is no gift tax, even though many of these states have an exemption of only $1M. The opportunity this creates: to plan for state estate taxes using SLATsinstead of bypass trusts.For instance, imagine a couple that has a combined net worth of $4M (held as 50/50 between the couple). The couple currently has no exposure to Federal estate taxes, but live in a state that applies a state estate tax of 16% on assets above $1M. If the husband passes away, he can leave up to $1M in a bypass trust for his wife, with the remaining $1M left outright to his wife (and eligible for the marital deduction). Going forward, though, the wife now has $3M of net worth, which exposes her to a potential estate tax of $320,000 (the excess $2M above the state exemption at a 16% rate). However, if the husband chooses to fund a SLAT, he can put all $2M into a trust for his wife's death before he passes away; as a result, his wife will only be exposed to state estate taxes on her own personal $2M net worth, which is only $1M above the threshold and thus only exposed to $160,000 in estate taxes. The net result - by using a SLAT, the husband can put allof his assets into a SLAT to keep them out of his wife's estate, instead of being constrained to "only" the $1M state estate tax exemption that would apply when funding a bypass trust at his death.Notably, SLAT strategies may also become very popular for higher net worth clients as well. After all, if the client’s goal is to fund a bypass trust with the Federal $5.25M exemption, doing so at death can result in a state estate tax liability of $680,000 (at 16% state estate tax rates on the excess $4.25M that goes into a bypass trust but is above the state estate tax exemption); however, if the bypass trust as a SLAT is funded during life instead, the client may be able to put the entire $5.25M into the trust without any of the $680,000 state estate tax exposure!One challenge of using SLATs is that, because neither spouse is deceased yet, it’s not always clear which spouse should fund a SLAT – the husband for the wife, or the wife for the husband? To the extent that it’s intended as an alternative to a bypass trust with a higher dollar amount, the goal may be to fund a SLAT from any spouse in poor health – and anticipated to pass away soon – for the benefit of a surviving spouse, truly establishing a “super bypass trust” funded during life to avoid future state estate taxes. In other situations, though, this may not be feasible, either because gift-in-contemplation-of-death rules require that the trust be funded sooner rather than later, or simply because both spouses are in reasonable health and it’s not clear which may pass away first (but there’s a desire to take some planning action). The easiest resolution to this is to simply have both spouses create SLATs for each other with some of the assets (so that each spouse removes some assets from his/her estate). In this approach, each spouse would keep enough such that the spouse’s individual assets that are kept, plus the SLAT assets for his/her benefit, would be enough to maintain his/her lifestyle as a surviving spouse. The important caveat, though, is that IRS rules are not favorable to so-called “reciprocal trusts."

Avoiding The Reciprocal Trust Doctrine

The so-called "reciprocal trust" doctrine essentially states that if Person A creates a trust for B, and Person B creates an identical (i.e., reciprocal) trust for A, that the courts can "uncross" the trusts and treat the situation as though each person created a trust for his/her own benefit. Thus, if a husband created a $5M SLAT for his wife and the wife created a comparable $5M SLAT for her husband, the IRS may well claim that the end result is simply that each person made the equivalent of a $5M trust for themselves... which would cause the trust to be included in each individual's estate under IRC Sections 2036 and/or 2038 (since the deemed donor to the trust is the beneficiary of the trust and/or has some deemed control of it), and defeat the estate planning purpose of the strategy. Notably, the rule would only apply to the extent the economic interests overlapped - thus, for instance, if husband put $2M into a SLAT for wife, but wife put $5M into a SLAT for husband, only the $2M would be at risk for being uncrossed. Nonetheless, that still largely defeats the purpose of at least the husband funding a SLAT.As a result, in situations where there's a married couple, it's necessary to plan the structuring of SLATs around the potential for the reciprocal trust doctrine. As shown in the earlier example, in some situations there may not be a need or desire to create SLATs in both directions in the first place, such as where the husband is in very poor health and there is only be a desire to have the husband fund a SLAT before he dies (but the healthy wife doesn't need to fund a SLAT in reverse). Where there is a desire to create two SLATs, techniques to help keep them separate include: different trustees or co-trustees; different rights to the trust (e.g., one might have access to income, but the other only to principal); different beneficiaries (e.g., one might be for just the spouse, while the other might be for spouse and children); different powers (e.g., one might have a special Power-of-Attorney to change the distribution of assets to certain family members or charities); fund with substantively different assets (e.g., one trust gets cash and securities, and the other receives a share of the family business). Another strategy to avoid the rule is simply to space out the trusts in the first place; if one is created now, and the other isn't established until years from now, it's difficult for the IRS to claim they were purely reciprocal (although obviously the caveat is that waiting too long may diminish the benefit of the strategy, but that "risk" is part of what substantiates the trusts aren't reciprocal!).Unfortunately, the “reciprocal trust” doctrine is ultimately up to the judgment of a court, if challenged, which means there are no “safe harbor” rules to follow to guarantee the strategy will be safe. As a result, expect to see a lot of focus from the estate planning community in the coming years to figure out how to structure SLATs to most easily avoid reciprocal trust treatment, while being “as reciprocal as possible” to avoid or minimize any disruption on the client’s overall financial and estate planning goals.At some point in the coming years, states will likely close their state estate tax "loophole" - either by establishing a gift tax to backstop their estate tax exemption, creating a robust gift-in-contemplation-of-death rule to reduce at least the use of deathbed SLATs, recoupling to the Federal system to take advantage of the Federal gift tax system (including the IRS' enforcement of it), or just outright repealing their state estate tax. Until then, though, the SLAT remains a remarkably viable to manage or avoid state estate taxes while staying within the Federal gift and estate tax rules.

Child Support Modifications in Massachusetts

CHANGING A CHILD SUPPORT ORDER

 

                Life may have changed since the court ordered child support for your child and you may need to change the order. There are 4 things it is important to know about changing a child support order. The court can only modify the order after 3 kinds of changes:

       -          a parent’s income has changed;

-          certain expenses for taking care of your child have changed; or

-          a parent’s health insurance choices have changed.

-           

                It does not matter if you pay child support or you get child support. If either parent’s life has changed in any of these 3 ways, you can ask the court to modify the order.  You have a right to get the order changed if:

 

-          the Child Support Guidelines say the amount of child support should be different from the amount in the order; or

-          a parent’s health insurance choices have changed.

-           

                If the court changes the order, the change only goes back to the time you “served” the other parent with the complaint. It is important to file a complaint to modify as soon as you know you need to change the order.

 

                What can I ask the court to change in the order?

 

                You can ask the court to change:

       -          the “weekly support amount” – the amount you get from the Child Support Guidelines Worksheet;

-          each parent’s share of routine medical and dental expenses over $250 each year;

-          each parent’s share of unexpected medical and dental expenses;

-          each parent’s share of other child-related expenses like educational or summer camp expense;

-          which parent pays child support;

-          which parent provides health insurance;

-          when the order ends – See Ending a child support order.

 

                When can I get the child support order changed?

 

                You can ask the court to change the child support order if there has been some kind of change in one or both parents’ finances or a change in health insurance choices. The financial change must be:

 

-          the income of one or both parents,

-          expenses for caring for your child if

-          your child moves or your child’s health changes dramatically.

-          the amount that either parent pays for child care, health insurance, dental insurance, or

                vision insurance.

 

                Some of the changes that can cause a parent’s income to go up or down are:

-          losing a job,

-          going on unemployment,

-          going on welfare,

-          getting a job that pays more money,

-          getting fewer hours at work,

-          getting injured or going on disability, or

-          going to prison.

-           

                When does the court have to change a child support order?

 

                When you file a complaint to modify a child support order, the court must change the child support order if:

 

-          the Child Support Guidelines say the amount of child support should be different from the amount in the order; or

-          the child needs health insurance, and one of the parents cannot get health insurance anymore or

-          one of the parents can now get health insurance.

           If the court changes my child support order, how far back does it go?

 

                If the court changes your child support order, the new order only goes back to the date the Complaint for Modification was “served”. The “served” date is the date that the other parent gets the summons and complaint about the case.

                The new order does not go back to the date that your job or health care changed.

You cannot change the amount of money you get or money you owe before the “served” date.

For example:

 

-          You pay child support but you lose your job on July 12th.

-          You file a Complaint for Modification on August 20th.

-          The other parent gets the Summons (official notice) and Complaint on August 24th.

-          The court changes your child support order on September 18th. The court decides that you should pay less money.

-          You pay less money starting on August 24th, not on July 12th.

 

 

Please remember that this answer is provided in the spirit of public education, not as legal advice. If you require legal advice for a particular situation, you should consult an attorney.

 

 

All the Best

SMARTPHONE SMARTS THIS HOLIDAY SEASON

SMARTPHONE SMARTS THIS HOLIDAY SHOPPING SEASON

 

                With the advent of the Holiday season nipping at our heels, I thought a tech savvy post bringing to light the pitfalls of the Smartphone might be in order.

                 Smartphones and the Internet can make your holiday shopping faster and easier, but there can also be pitfalls if you're not careful. The good news is there are ways to ensure you have a safe shopping experience, so that gift-giving is a joyous occasion, not an opportunity for cyber thieves.

                 Most consumers know that the day after Thanksgiving is “Black Friday” – the day that shopping malls and big box retailers across the country are packed with bargain-hunters looking for holiday gifts. When all those shoppers go back to work the Monday after Thanksgiving, online retailers will be ready with deals to capitalize on “Cyber Monday” – one of the biggest online shopping days of the year.

                 Unfortunately, scam artists will also be waiting to lure the unwary into divulging sensitive personal information and sending money for nonexistent products. Every year, we receive complaints from consumers that saw deals that were too good to pass up online. Instead of a holiday gift for a friend or loved one, these consumers all too often end up with nothing but a lighter wallet.

                 With more and more shoppers using mobile devices to do some or all of their holiday shopping, we’re warning consumers to be on the lookout for a growing number of mobile ecommerce scams.

                 More than half of all U.S. wireless users now have smartphones and 45 million consumers are using shopping and ecommerce apps. According to Nielsen year-on-year use of mobile apps for commerce and shopping increased by 89% in 2012. In the past year, there were more than 8 million downloads of the Amazon Mobile app 5 million downloads of the eBay app alone.

 

                Consumers should be on the lookout for the following scams targeted at holiday shoppers.

 

 •Holiday phishing and SMSishing scams – Scammers will likely try to take advantage of bargain hunters by sending out phishing emails and text messages (known as “SMSishing”) offering seemingly unbeatable deals on holiday gifts, particularly hard-to-find toys (check out Toys R Us’ “Hot Toy List” for examples). Clicking on these links may lead to phishing sites that install mobile malware or seek to get credit card or other sestitive information from consumers.

 

 •Bogus online coupons – Clipping coupons out of the newspaper is so last century. Today’s savvy consumers are increasingly relying on coupon apps and coupons specifically designed for storage on smartphones. Watch out of suspicious emails or online ads offering these coupons, as they could lead to mobile malware sites.

 

•Phony social network promotions – Consumers using their phones to check in on Facebook or other social networks are likely to be shown ads for a variety of holiday deals, gifts, giveaways and promotions. We wary when clicking on these ads, particularly if doing so prompts you to download an unfamiliar app to your phone.

 

 •QR codes – QR codes are the square images, resembling barcodes, that are increasingly found online, in print, and on outdoor signs. Scanning these barcodes with a smartphone camera can the user a mobile website or download an app. Recently, scammers have begun to take advantage of this technology to send consumer malware apps that can surreptitiously sign the user up for premium text message services, among other scams.

 

 •Unsecured WiFi networks – Most smartphones are designed to operate on a carrier’s cellular network as well as on WiFi hotspots. When connected to a public hotspot, be careful entering sensitive information into online shopping sites and applications since the connection is not secure and a scammer could be snooping on the network.

 

                Be Smart, Be Safe, Be Healthy, be careful this Holiday Season.

 

 

Cheers

REVISED MASSACHUSETTS CHILD SUPPORT GUIDELINES AS OF AUGUST 1, 2013

REVISED MASSACHUSETTS CHILD SUPPORT GUIDELINES AS OF AUGUST 1, 2013

 

                Massachusetts has revised the Child Support Guidelines with the new guidelines scheduled to take effect on August 1, 2013. The guidelines adjust the formula for child support and fills in some gaps.  A summary of some of the changes follows:

                 As a general matter, the new Guidelines lower the amount of money paid in support for one child and increase the amount for more than one child. It is impossible to state that for all people the result will be the same because the formula is based on many factors including the income of both parents. However, it appears that some payers will pay 10% to 15% less if there is only one child. As the number of children increases, the amount to be paid will increase as the Guidelines increase the amount paid with more children.

                 The Guidelines eliminate from the definition of income now excludes certain government benefit programs such as Social Security Income and SNAP (welfare) benefits.

                 The Guidelines give Judges discretion to consider income from secondary jobs and overtime. This will require Judges to either incorporate the income from these sources in the Guideline calculations or explain why the money is excluded. I expect that in most cases, the income will be included.

       

                The Guidelines make it clear that child support calculations should not stop if the combined income reaches $250,000.00. When the income exceeds this amount, the Guidelines no longer provide a formula but the Judge should make an order for additional support to be paid or explain why additional support should not be paid.

 

                The Guidelines are based on the assumption that custody is shared by the parents on a 2/3rd – 1/3rd basis. This is the situation when the non-primary parent has the child every other weekend and one evening a week. If the non-primary parent is with the child less than 1/3rd, the parent should pay more. If the parent is with the child more than 1/3rd, the parent should pay less. The former Guidelines had a formula for a 50 – 50 split of custody. This formula remains. What is new is that there is now a formula for calculating child support when the non-primary parent has the child between 1/3rd and ½ of the time. What is missing from the Guidelines is rules on how to calculate time with the child. Do you count nights? Do you count hours? How do you calculate time when the child is in school? Over time the Courts will adjust to these issues.

                 The Guidelines have language to give additional guidance for Judges when the child is over 18 years old. The Guidelines do not give a formula for Judges in this instance.

 

Six particularly noteworthy changes from the previous guidelines to note are:

 

• The 2013 guidelines calculate each parent’s percentage of total available combined income up to $250,000 per year and a “combined support amount.” This is a new method of looking at support — as a total obligation of both parents.

• The 2013 guidelines clarify what is to occur when the combined income of the parties’ exceeds $250,000 per year.  The guidelines are applied on the first $250,000 in the same proportion as the Recipient’s and Payor’s actual income compared to the total combined income.  There is now a space on the form to list how much income remains available to either parent above the $250,000 combined total.   The child support obligation for the portion of combined available income that exceeds $250,000 is in the discretion of the Court.

 

• The guidelines themselves now provide that a child support order may be modified if there is an inconsistency between the amount of the existing order and the amount that would result from the application of the new child support guidelines, in keeping with the recent decision in Morales v. Morales.  However, if the Department of Revenue is providing benefits to a party and there was an order for child support issued less than three years previously, a material change in circumstances must be shown in addition to an inconsistency with the new guidelines.

 

• There is now a “deviation form” that must be filled out where there is an upward or downward deviation from the guidelines amount.  Circumstances justifying a deviation are expanded and now include extraordinary health insurance expenses, child care costs that are disproportionate to income, or when a parent is providing less than one-third parenting time.

 

• Some, all, or none of income from overtime may be considered by the court in setting support, regardless of whether overtime income was earned prior to the support order.

 

• For support of children over the age of 18, the court may consider a child’s living arrangements and post-secondary education.  Contribution to post-secondary education may be ordered after consideration of several factors set forth in the Guidelines and, if there is a contribution to education, it must be considered in setting the weekly support order.

 

 Probate Court has a web site which provides the new Guidelines and forms. There are other changes, which make it worthwhile for all parents who pay or receive child support to read and understand the new guidelines, and I encourage anyone who is interested in these new changes to read the  Definitions and preamble explaining the new guidelines. They can be found at:

 http://www.mass.gov/courts/childsupport/2013-child-support-guidelines.pdf

 

As always, if you have, or someone you know has, any questions, please feel free to contact my office. 

Please remember that this answer is provided in the spirit of public education, not as legal advice. If you require legal advice for a particular situation, you should consult an attorney.

 

Chapter 40B Housing in Massachusetts

Chapter 40B Housing in Massacdhusetts

 

I received another inquiry from another reader regarding the Comprehensive Permit Act, more commonly referred to as Chapter 40B. Despite the many negative connotations regarding these projects, their intent is to serve a very utilitarian and positive purpose:. The goal of Chapter 40B is to allow working families and seniors to remain in their communities when they might otherwise be priced out of the conventional housing marketing. Below is some insightful information which many may find helpful, especially when dealing with aging parents and working families looking for an opportunity to grab a hold of a piece of the American Dream.

 

Again, thank you to my reader for your inquiry.

 

What is chapter 40B affordable housing?

 

Chapter 40B Housing is a program created by Massachusetts in 1969 to allow developers to override local zoning bylaws in order to increase the stock of affordable housing in municipalities where less than 10% of the housing stock is defined as affordable. The goal of Chapter 40B is to allow working families and seniors to remain in their communities when they might otherwise be priced out of the conventional housing marketing. The statute was designed to permit the development of multifamily and affordable housing in suburban and rural parts of the state.

 

Who can take advantage of Chapter 40B Housing?

 In order to qualify for Chapter 40B housing, at least 20-25% of any proposed development has to provide housing which serves households at or below 80% of the area's median income. Such housing developments can be for rent or for sale as long as the affordable units are permanently restricted to remain affordable. Since the Chapter 40B went into effect, 56,000 units in over 1,000 developments have been created. Of those units, 30,000 units are reserved for households earning below 80% of the median income.

Qualifying for 40B

 You may qualify for a 40B home if

 •you have less than $75,000 in assets

  •you have not owned a house in the last three years prior

  •your household annual income is below

  ◦1 Person Household: $45,500

 ◦2 Person Household: $52,000

 ◦3 Person Household: $58,500

 ◦4 Person Household: $65,000

 ◦5 Person Household: $70,200

 ◦6 Person Household: $75,400

 

Exceptions are available based on age, recent displacement, and other circumstances. If you think you might be eligible but aren't sure, or are close and might need an exception, please let us know! We would be happy to work with you confidentially on your application.

 

How is Chapter 40B Housing different from other affordable housing programs?

What distinguishes Chapter 40B housing from other affordable housing programs is that there is no "subsidy" or state budget allocation. Instead, the cost of the affordable units has to be absorbed by the developer as part of the overall financing of the project. The market rate units in the development have to make up for the difference since the affordable units must be sold or rented below their market value.

As always, if you have, or anyone you know has, any questions about this information, please feel free to contact my office at any time.

 

Please remember that this answer is provided in the spirit of public education, not as legal advice. If you require legal advice for a particular situation, you should consult an attorney.

Why Do I Need a Will?

I received a message from a reader, who thought it might be a good idea to address the importance of having a Will, or even a basic estate plan, especially when there are children involved. Below I have attempted to address that particular issue, as well as other unintended possibilities which may result in the absence of even a basic Estate Plan.

 

Thank you to my reader. Your input is very much appreciated.

 

 

Why do I need a will?

 

Please remember that this answer is provided in the spirit of public education, not as legal advice. If you require legal advice for a particular situation, you should consult an attorney.

 

1. You have minor children.

 You should write a will in order to appoint guardians for your minor children, and trustees to manage their property. If you do not leave a will, the court may appoint a guardian whom you would not have chosen.

You also need to write a will in order to prevent minor children from inheriting real estate outright. Although minors have the legal capacity to own property, they do not have legal capacity to manage it. If your children inherit a share of your house, your spouse would not be able to sell it, rent it out, or even refinance the mortgage without a court order. Getting court orders is expensive and time consuming. Although children generally do not inherit community property in the absence of a will, they do inherit a share of your separate property. In many families, the primary residence is partly separate property because the down payment was made with a gift from parents or with money earned by the spouses before marriage. (See the FAQ on community property.)

 

2. You have no children.

 Do you know what would happen to your property if you died right now without a will? You might be surprised to find out that your spouse might not inherit everything. If you and your spouse have no children, your parents or siblings might inherit part of your home and become co-owners with your spouse. Your spouse would not be able to sell the house or other property without their permission, and vice versa. If you want to remember your parents or siblings in your will, it is best to leave them specific pieces of property that they will not have to share with your spouse. A will can accomplish this.

 3. You have a large family.

 All of your heirs will become co-owners of every asset you own, and will have to manage all the property together. They may not live in the same state, or they may not be able to agree on what should be done with the property. The more heirs you have, the more money and effort they will have to spend trying to get organized. With a will, you could leave specific assets to specific heirs, or put one heir in charge as trustee for the others. Either way, writing a will would save your heirs significant hassle and expense. It could also prevent major feuding.

4. You own real estate.

 In the absence of a will, real estate is likely to be inherited by minors or numerous co-owners, and either result will be costly. A little estate planning now can save your heirs significant expense and trouble later.

 5. None of the above.

 Even if you do not think you need a will, you should still see an estate planner to draw up powers of attorney for health care and financial matters. If you become incapacitated by illness or accident, a power of attorney will be critical to allow a friend or loved one to pay your bills and make health care decisions for you. These simple documents not only save money later, but they give you the security of knowing things will be taken care of in your absence.

 

Who will get my property if I die without a will?

 

Please remember that this answer is provided in the spirit of public education, not as legal advice. If you require legal advice for a particular situation, you should consult an attorney.

 What happens if you die without a Will? How will your property in Massachusetts pass to your loved ones? It is often said that if you don't have an estate plan, the State has one for you.  Here it is:  

 1) If a person dies with a spouse, and with kindred (relatives) surviving them, (but no children), the spouse is entitled to the first $200,000 and half of the remaining real and personal property. If the personal property is not sufficient to provide the surviving spouse with $200,000, real estate owned by the deceased can be sold or mortgaged to provide for the surviving spouse. 

If the deceased leaves issue (children, and children, grandchildren, etc. of deceased children), the surviving spouse shall take one half of all real and personal property.

If the deceased leaves no issue or kindred, the surviving spouse inherits all of the real and personal property. 

2) After the surviving spouse's share is distributed, or if there is no surviving spouse, the remaining property is distributed in equal shares to the decedent's issue, by right of representation. If all issue are of the same degree of kindred (i.e., all are grandchildren, or all are great-grandchildren) they shall share equally. 

 If the decedent leaves no issue, than to his or her mother and father, or the survivor of them.

 If the decedent leaves no issue and no parents, than the property goes to his or her brothers and sisters, of the issue of any deceased brothers and sisters.

 If the decedent dies with no issue, parents or siblings then the property is distributed to then to his next of kin in equal degree; but if there are two or more collateral kindred in equal degree claiming through different ancestors, those claiming through the nearest ancestor shall be preferred to those claiming through an ancestor more remote.

 3) If someone dies with no spouse or kindred, their property shall escheat to the Commonwealth.

 Those without a Will may think that their spouse will inherit all of their property upon their death, but as you can see, it is possible that a spouse would only inherit half of the property held in the decedent's name alone, while also providing for distributions to rather distant relatives.  Is this how you would want your Will to read?

 If you have, or anyone you know has, any questions concerning any of the issues raised in this article, please feel free to contact my office.