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Ever wondered how an Estate Planning attorney advises her own parents?

Stamped: “June 29, 1912”

I’m sharing a real email I sent my Dad recently.  He sought my advice about how best to prepare a list of his financial information so I would have it if he died or became disabled.  This is right up my alley, so I happily complied and now want to share.

First, some background on my family.  Dad is a retired physician.  He is in his early 70s, healthy, responsible, and fully capable.  Mom died many years ago and Dad is unmarried but in a long-term relationship.  I have one brother.  He and I are responsible, close, and similarly situated.    

Like most dads, mine does not like to take advice from his children.   (The fear of dying on an extended European cruise seems to have led him to go against his better judgment!)   Listing financial information, and keeping the list up-to-date, is not an easy task for any of us.  Discussing the process with family members can be difficult too.  Hopefully, my email outline will help your family.

Dad –

I suggest you make a list of your financial information and try to keep it current.  It can be in an Excel spreadsheet, Word document, or even just handwritten.  Since keeping track of information can be burdensome over time, keep it simple.  I would maintain an electronic AND a hard copy of the list somewhere where we would look if you died or lost capacity.  It shouldn’t be locked in a safe or safe deposit box.  I encourage you to continue to get paper statements for all accounts, including all credit cards and bills. 

Here is what you should put on the list.  I am making some assumptions about what you own, so please add to this if I am missing any unusual assets.


List all Bank, Brokerage, Non-Retirement Investment, Pensions and Retirement accounts.  For each account list the following 4 things: (1) The name of the Institution/Bank; (2) The account number; (3) How the account is titled.  Is it in your individual name?  Is it in the name of a Trust?  Is it owned jointly with someone else? (4) If the account has a beneficiary, who is it?

Be sure to include on the list any accounts titled in the name of Mom’s Trust.

List all Life Insurance Policies.  For each policy list the following 5 things: (1) The name of the life insurance company; (2) The policy number; (3) Who owns the policy.  Is it owned by you or by a Trust? (4) Who is the beneficiary? (5) The location of the policy, if you have it.

List any important additional information about your assets, including a safe deposit box, tangible items or stock certificates stored elsewhere, and the title to your car.  Please list the item, location and information needed to access it.


List all Mortgages, HELOCs, and Car loans.  For each account list the following 2 things: (1) The name of the Lender; and (2) The account number

List all Credit cards.  For each card list the following 3 things: (1) Name of the credit card company; (2) The account number; (3) Is the amount due paid automatically? 


List your Medicare Number.  List your Supplemental (Medigap) Health Plan and Member Number.  List your Long Term Care Insurance carrier and Account Number.  Where is the LTC insurance policy located? List name and contact info of Primary Care Physician. 


List name and contact info of Estate Planning Attorney and location of original Estate Plan documents.  List name and contact info of Accountant.  List name and contact info of Financial Advisor.


Try your best to keep a list of usernames and passwords for your online accounts.  This should include bank/investment accounts you manage online, credit cards, email accounts, photo accounts, service/shopping accounts (like Amazon, Netflix, etc.), and social media accounts (like Facebook).  Do your best on this!  It is hard to keep up to date.  I struggle with this too.  I don’t think it is essential (or even possible) for it to be perfect.  If you have a Master Password for Phone or Computers, be sure to put that on the List.   


Estate Planning on the Streets of Philadelphia

I discovered a hidden historical gem on the streets of Philadelphia this week.  13th Street, right in downtown Philadelphia, has been re-named in honor of Philly native and local hero Edith “Edie” Windsor.  Edie Windsor was a LGBT civil rights activist.  After her wife Thea died in 2009, Windsor, as Executor and beneficiary of Thea’s estate, was required to pay $363,000 in federal estate taxes on the assets she inherited.  Had Windsor been married to a man, the assets would have passed to Windsor completely estate tax free because they would have qualified for the unlimited Federal estate tax marital deduction.   Windsor could not benefit from the unlimited marital deduction even though she and Thea were legally married under state law because the Defense of Marriage Act (DOMA) limited marriage to a union between a man and a woman.  DOMA prevented same-sex married couples from receiving federal benefits available to heterosexual married couples.

Windsor sued the federal government alleging that DOMA was unconstitutional.  She asked the court to order the IRS to extend the estate tax marital deduction to same-sex married couples and refund her the estate taxes.

In 2013, the Supreme Court agreed with Windsor.  The court found that DOMA was unconstitutional.  It held that assets left after death to a same-sex spouse are eligible for the federal marital deduction and should not be subject to estate tax.  Windsor was entitled to an estate tax refund in full.  

In 2017, the IRS issued a Notice that provided some retroactive relief for same-sex taxpayers.  A taxpayer who had used estate tax exemption or allocated generation skipping transfer tax exemption to gifts to a same-sex spouse can now apply to the IRS to restore his or her exemptions.  Same-sex marriage became legal in Massachusetts in 2004.  Massachusetts same-sex married couples can obtain this relief retroactive to the Windsor decision.

Edie Windsor advocated for same-sex marriage for the rest of her life.  She died in 2017 at the age of 88.

Charitable Remainder Trusts – A Versatile Estate Planning Tool

SwissA Charitable Remainder Trust (CRT) is an irrevocable trust that provides for periodic payments to be paid to individual beneficiaries with a remainder paid to a charity.  CRTs are versatile estate planning tools that can be used to meet various goals – to reduce income taxes, to defer capital gains taxes, to generate lifetime income for the donor or others, and to benefit charities.

A CRT may be funded by a donor with cash, securities, real estate or tangible personal property (such as artwork).  The CRT terms must provide that the donor (and/or his or her spouse or other family member) receive periodic payments for life or a term of years.  The payments may be a percentage of the trust assets (a “unitrust” percentage between 5% and 50% of the total trust assets) or a fixed annuity amount.  The payments may be made annually or more frequently.  The CRT terms may vary in other ways.

At the end of the term or on the death of the surviving beneficiary, the remaining assets in the CRT are paid to a charity or charities selected by the donor.  The donor may select the charities when the CRT is established, but may change the charities at a later time.  To qualify under tax laws, the remainder passing to charity must be at least 10% of the total fair market value of the trust assets.

CRTs offer significant tax benefits.  When the CRT is established, the donor receives an income tax deduction for the value of the remainder that passes to charities.  In addition, capital gains taxes are deferred until distributions are made.

CRTs are a versatile estate planning tool.  We have used them in our practice to meet a variety of client goals.  Stay tuned for an upcoming post on case studies from our practice.

Image from flickr/Jinho Jung

Your Living Will and Dementia

elderlyA Living Will is a legal document that is typically part of an Estate Plan.  In a Living Will, you express your wishes about the medical care you would like to receive at the end of your life.  It includes instructions about when and under what circumstances you want medical care to be withheld or withdrawn resulting in your death.  The instructions in your Living Will guide the person named as your health care agent in your Health Care Proxy in making end of life health care decisions for you when you are unable to do so.   To put it bluntly, you are instructing the health care agent when it is okay to “pull the plug”.

If you do not have a Living Will, Massachusetts law presumes that you wish your life to be extended as long as possible with all available medical treatments and interventions, even if you have a poor quality of life with little chance of recovery.  If that is not your wish, you should put your wishes in writing by signing a Living Will that expresses your wishes.  Verbal instructions to family members are not legally binding.

A recent and interesting NPR program focused on a team of doctors at the University of Washington who are advising patients, while still healthy, to sign a dementia-specific Living Will.  Their sample dementia directive form includes specific instructions about end of life care for those suffering from Alzheimer’s or other forms of dementia.  It allows the patient to express different wishes about desired care at different stages of illness – mild, moderate and severe

These doctors believe specific language for dementia should be included in a Living Will because dementia is unique and as dementia progresses patients become increasingly unable to express wishes about medical care and the side effects of that care become increasingly intolerable.   The University of Washington doctors also cite the increasing number of people who will be suffering from dementia in the future as another reason to specifically address this issue.

I advise all my clients to sign a Living Will and offer my clients recommended language.  The Living Wills I recommend do not yet include specific instructions for dementia.   Although I do not specifically endorse the University of Washington sample dementia directive form, I believe this is an important issue and intend to pay more attention to it in the future.   If you wish to explore this issue further, consult an estate planning attorney or check out the resources available at The Conversation Project.

Charitable Gifts in Your Estate Plan: To Restrict or Not to Restrict?

Explosion_138,_Force_0Imagine you are preparing your Estate Plan.  You wish to make a gift to a certain charity –  the hospital that cured your cancer or your alma mater, for example.  You have a particular cause in mind – to support a certain physician’s research or to fund scholarships for needy students, for example.  Do you restrict the charitable gift to that particular cause?  Or do you give an unrestricted gift and allow the charity to use it for any charitable purpose?

Many clients are tempted to restrict their charitable gift.  I suspect they believe this will ensure that their gift is used in a manner that reflects their specific wishes.  But my advice is often to do the opposite – to give an unrestricted gift that allows the charity to decide how best to use it when the time comes.

There are several reasons why.  First, times change.  The passage of time or the changing of circumstances can cause restricted gifts to become outdated, impracticable, or sometimes even illegal, making the gift unusable or of less value to the charity.  Unrestricted gifts give the charity the flexibility and control to use the gift in the manner that best suits its purpose or mission.  Second, restricted gifts may generate higher administrative costs for the charity making less of your gift available to further the charity’s purpose.  Third, restricted gifts may ultimately require a court legal action by the charity – a petition for cy pres or equitable deviation – that can be a costly and time consuming distraction.

And while I strongly believe this is sound legal advice, that I stand by, it raises the risk that a donor’s gift ends up being used for a purpose wildly different from what the donor may have wanted.  And that risks upsetting a donor’s heirs or creating tension between them and the charity.

Here is an interesting case study.  The University of New Hampshire has recently taken a lot of heat for its use of a large, unrestricted charitable gift from the Estate of Robert Morin.  Morin spent his career working as a UNH librarian.  I doubt he was highly paid, but he was secretly a “millionaire next door” and left his $4 million fortune to UNH without restrictions.

As it was legally entitled to do, UNH used the gift as it saw fit.  $100,000 went to the library, $2.5 million went to upgrade the UNH career center, and $1 million went to purchase a new high-definition video scoreboard for the UNH Wildcats’ stadium.  The rest is still unallocated.  UNH had spent the last several years upgrading its football program and stadium, and the purchase of the scoreboard was I assume an expense that UNH believed was important for raising the school’s stature.

Many have objected to the purchase of the scoreboard as antithetical to the way Morin lived his life.  But this is not the legal standard.  What UNH did was not illegal or even unethical.  Also, there is no real evidence that Morin would have disagreed.  He could have restricted his gift, but chose not to.

When making charitable gifts in your Estate Plan, consider carefully whether to restrict them.  And if restrictions are important to you, there may be a way to work closely with the charitable institution to accomplish your goals, without limiting its opportunities.

Image from wikipedia, Erie Explosion v. Fayetteville Force.

Estate Planning in History: Boston’s “Lotta Fountain”

Lotta_Fountain_-_IMG_3787Looking to do some local sightseeing this summer that combines your love of Boston history and charitable trust administration?  Look no further!  Visit the (recently renovated) Lotta Fountain, a drinking and play fountain for dogs, located on Boston’s Charles River Esplanade.

The Lotta Fountain was a charitable gift from a Trust established under the Will of Lotta Crabtree.  Lotta Crabtree was a very successful 19th century vaudeville star.  At the height of her career she was the highest paid actress in the U.S. and became one of the wealthiest entertainers of her day.  At the time of her death in Boston in 1924, she had amassed an estate of over $4 million (worth over $50 million today).  She never married or had children.  In her Will, she established and funded eight charitable trusts for various purposes, including animal welfare.  One of those charitable trusts was used to establish a $300,000 fund to benefit animals.  That fund led to the design and building of the Lotta Fountain in 1939.

The Fountain later fell into significant disrepair in large part because the Trustees mismanaged the trust and charged excessive fees which depleted the fund’s assets.  In 2004, a Massachusetts court held that the Trustees breached their fiduciary duties.  They were removed and reprimanded, and a surcharge for the excessive fees was imposed.

The Esplanade Association and Boston’s Department of Conservation and Recreation raised money to repair and renovate the Fountain.  It opened June 15.  It will now fulfill Crabtree’s charitable intention by serving as a drinking and play space for Boston’s four legged residents.  If you wish to visit, the fountain is located on the Esplanade between Berkeley and Clarendon Streets, near the Arthur Fiedler Bridge.  I have not yet been there, but I think it is worth a visit this summer.

Image of fountain from wikipedia commons.

Are Electronic Wills the Wave of the Future?

8973427921_42b22809be_bFor a Will to be valid and self-proved in Massachusetts, it must be in writing, signed by the testator, signed by two (2) witnesses, and signed and stamped by a Notary Public.  This means that you, two (2) witnesses, and a Notary Public must sign your Will with a pen… in handwriting… on paper.  Electronic Wills or electronically signed Wills are simply not valid.

In addition, if you die as a resident of Massachusetts, your original Will in paper form will be filed by mail or hand delivery in Probate Court, if a Personal Representative of your estate is to be appointed.  (If the original is unavailable, a paper copy may be filed, but the probate process becomes more difficult and lengthy.)   This means that your original Will in paper form must be kept safely on file either in your attorney’s office or elsewhere.  It is also important to have only one original paper Will.

In a world in which much of our lives are electronic, I’ve asked myself on many occasions – is it time to dispense with these formalities?  Aren’t they out of date?  We pay our bills electronically, send checks electronically, manage our finances electronically, and prepare and file tax returns electronically.  Why not sign and store electronic Wills?

Not surprisingly, others have asked the same question.  The State of Nevada passed a statute allowing electronic Wills way back in 2001.  So far other state legislatures have not following suit.  In 2013, an Ohio Court ruled that a Will written and signed on a computer tablet was valid under Ohio’s probate code.  There are currently two bills under debate in Florida that would legalize electronic Wills.  In addition, the Uniform Law Commission has formed a Drafting Committee on Electronic Wills to draft model legislation for states.  Legislative efforts to pass laws allowing electronic wills have been supported by lobbyists from online estate plan document providers (like and Legal Zoom) whose business no doubt suffers from state laws that require Wills to be in writing.

Massachusetts has always been slow to adopt changes to its probate law, and for that reason I suspect electronic Wills are not in our near future.   The time will come, but for now, be sure your Massachusetts Will is in writing, properly executed, and stored safely in its original form.

Image from flickr by Judit Klein


The Cure for the Estate Planner’s Writer’s Block

13973604274_755f895547_z (1)The law of Wills and Trusts has a very long history.  The Ancient Greeks and Romans prepared Wills and created a foundation of inheritance law.  Our law of Wills and Trusts derives from old English common law, which first arose during the Middle Ages.  As a result of this history, my law practice has some fun legal terms and nomenclature, some of which I will discuss and define here.  I find these terms unique and fun to use.  (Some of them even sound a bit dirty!).  If you use these terms correctly, you too will sound like a knowledgeable estate planning attorney.

A Testator is a person who makes a Will.  Testatrix is the female version.  Although Testatrix is no longer used in Massachusetts (since Massachusetts adopted the Uniform Probate Code in 2012), you may still see the term used in older Wills.

An Executor is a person or institution who carries out the terms of a Will.  The Executor is nominated by the Testator in the Will and then appointed by a court after the Testator’s death.  The female version if Executrix.  Neither of these terms are used in Massachusetts since the adoption of the Uniform Probate Code but you may still seem them in older Wills.  We now use the more modern term, Personal Representative.

A person dies intestate if he dies without having made a Will.  The assets he owned at death will pass under the lasts of intestacy, which means that they will pass to his heirs at law (his closest blood relatives), as defined by state law.

A usufruct (pronounced “yoosefruct”) is an interest in property for a limited duration, typically for a person’s lifetime.  It is similar to a common law life estate in property, the right to use the property during one’s lifetime that terminates at death.  The owner of the usufruct is called the usufructuary.  The usufructuary’s interest is limited to the right to use the property (“usus”) and to enjoy its fruit (“fructus”).

A remainderman is a person who will inherit property upon the occurrence of an event that terminates the current beneficiary’s interest.  Typically, the event that triggers the remainderman’s inheritance is the death of the current beneficiary.  For example, I can establish a trust for the benefit of my son for his lifetime and provide that, on his death, the remaining assets in the trust pass to his children.  My son’s children are the remaindermen.

Image credit Craig Sunter, Flickr,

Kaiser Law Group 2016 End of Year Newsletter

Kaiser.icon.RGBDear Friends and Colleagues:

Happy Holidays and Happy New Year!  We hope 2016 has been a good year for you.  We are writing to you once again with updates on 2017 tax laws and additional estate planning news.

Update on 2017 Tax Laws

As of now, the gift, estate, and generation-skipping transfer (GST) tax laws are slated to remain largely unchanged in 2017.

  • Federal – The top Federal gift and estate tax rate will remain 40% and the Federal exemption will increase to $5.49 million per individual (and $10.98 million for a married couple). The increase in the Federal exemption from $5.45 million in 2016 is due to inflation only.  The Federal gift tax annual exclusion will remain $14,000 per donee for individuals (and $28,000 per donee for married couples).   Portability will continue so that a surviving spouse will be able to use his or her predeceased spouse’s unused exemption provided he or she filed a Federal estate tax return at the first spouse’s death.
  • Massachusetts – The top Massachusetts estate tax rate will remain 16% with a Massachusetts exemption of $1 million per individual (and $2 million per married couple).  Massachusetts has not yet adopted portability of the Massachusetts estate tax exemption.

The Trump Election and Estate Taxes

Although no changes in tax law are planned for 2017, it is important not to ignore the elephant in the room.  The election of Donald Trump may mean substantial changes to Federal estate tax law.   During his campaign, Trump promised a total repeal of the Federal estate tax.  Although total repeal is not certain, substantial changes to the Federal estate tax law are likely coming in 2017 or 2018.

At this time we advise you not to make changes to your estate plan in response to the Trump election.  Your existing estate plan is not now obsolete, and may not become obsolete.   There are several reasons it does not make sense to make changes yet.

First, we simply do not know how and when the Federal estate tax law will be repealed.  There are too many unknown factors.  The Trump administration may have other priorities and may choose to attend to those first.  Repeal might be temporary or may be sunsetted and thus the estate tax reinstated in the future.  The Federal estate tax may be replaced with a new tax regime that includes a capital gains tax at death or carryover basis, both of which will require tax planning.  A new Federal tax law may also impact gift and generation-skipping tax law, which are important elements of your estate planning.  Many believe that the gift tax is unlikely to be repealed.

Second, Massachusetts will likely still have an estate tax.  Planning to minimize or reduce Massachusetts estate taxes will remain important.

Third, your estate plan is designed to do more than just estate tax planning.  It implements your wishes for your family.  It provides for your spouse, children, and other beneficiaries in the best way possible.  It protects assets for your family.  And it may reduce income taxes.  These aspects of estate planning will remain crucial elements of your estate plan, even if the Federal estate tax is repealed. 

Some of you may have considered planning in light of the proposed changes to the Section 2704 regulations, which may limit discounts of gifts of family entities.  It is now unlikely that these proposed regulations will be made final.  The possibility still remains, but we do not believe last minute planning is advisable.

Please keep in mind that there are other elements of Trump’s proposed tax plan that, if enacted, may impact you.  He has proposed reducing individual and corporate income tax rates.  In addition, he has promised repeal of the 3.8% net investment income tax (the Medicare surtax).

Massachusetts will now allow income tax deduction for 529 contributions

Section 529 plans are a great way to make gifts to children and grandchildren in a tax-advantaged manner.  In 2017, there will be yet another reason to make 529 contributions.  Massachusetts residents will now be eligible for a state income tax deduction for 529 contributions to Massachusetts’ 529 plan (MEFA’s U.Fund) of up to $1,000 per individual and $2,000 per married couple.  This change was part of a state law signed by Governor Baker in August 2016 that becomes effective in January.

Even taxpayers who are currently or will soon be paying for higher education may benefit from this change.  529 contributions made in 2017 can be withdrawn in 2017 or 2018 to pay for that year’s or next year’s tuition.   Although these contributions will not have much time to grow tax-free, the taxpayer will be able to take the income tax deduction for the contribution on his or her 2017 income tax return.  This may be a worthwhile tax savings strategy, even if college is right around the corner.

We wish you a happy and healthy 2017!

Yours truly,

Dale Ann Kaiser                       Rachel Ziegler

The information provided in this newsletter is offered for informational purposes only; it does not constitute specific client legal advice or an offering to create an attorney-client relationship.  This newsletter may be considered advertising under the Massachusetts Rules of Professional Conduct.