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Sunday, December 30, 2018

Estate Planning Tips for the New Year

Every year, millions of people make their "New Year's Resolutions."  These resolutions can include accomplishing a personal goal or making a change to improve a person's everyday life.  In 2019, one such New Year's Resolution could be to work on your own estate planning goals and objectives.  To kick off 2019 correctly, I am offering three complimentary and useful estate planning tips.

1.  If you own your home, make sure you have filed a Declaration of Homestead with the Registry of Deeds.  This one is a no-brainer for every single home owner in Massachusetts.  Massachusetts General Laws Chapter 188, more commonly known as the Massachusetts Homestead Act, is a law under which a homeowner is protected by an estate of homestead.  A homestead estate provides limited protection of the value of the home (up to $500,000) against unsecured creditor claims.  The Homestead Act is designed to protect home ownership from execution and forced sale, so long as the owner and/or covered family member(s) occupy(ies) or intend(s) to occupy the property as his or her principal place of residence.  Essentially it can prevent someone from trying to take your home.  You never know what can happen in life and while most people will probably never need $500,000 in protection, this is a case of better safe than sorry.  This is especially true considering the filing fee for a Declaration of Homestead is typically only thirty-five dollars and it does not expire.  So, one great New Year's Resolution for all homeowners in Massachusetts should be to make sure they have a Declaration of Homestead registered at their local Registry of Deeds.  This can be done either online or in person at the Registry.  If you need assistance with (or have any questions concerning) Declaration of Homesteads, please do not hesitate to contact the Law Offices of Samuel S. Reidy.

2.  Do a Beneficiary Review of all of your Life Insurance, IRA's, 401(k)s, and other Accounts.  It is very important to make sure that all of your named beneficiaries are correct.  If you have taken the time and energy to establish life insurance policies, IRA's, 401(k)s, and other similar accounts, you must also take the time to make sure the beneficiaries accurately match your wishes.  One very common misconception is that a Last Will and Testament designates who will receive the proceeds from your life insurance policy, IRA, 401(k), and the like, upon your death.  This is typically not the case, as any account with a named beneficiary will supersede provisions in your Last Will and Testament.  Considering the large amounts that can be in these types of accounts, it is worth spending an afternoon reviewing your paperwork and calling your financial advisor or the companies directly to ensure everything has been setup properly.  A bonus tip: do not make your estate the beneficiary of these accounts, if possible.  When naming your estate as a beneficiary, you open the door for creditors to take all of the money before it every reaches your loved ones.  This is a very difficult thing and a waste of all of your hard work and estate planning.

3.  When your children go off to college, make sure they have a legally binding health care proxy in place.  College is (and should be) an exciting time in every child (and parent's) life.  One thing that most parents do not realize is that once your children turn eighteen in most states, parents can no longer make health care or financial decisions on their children's behalf.  While even at 18, 19, 20, 21, 22, 27, 30, 35, 42, 48, and so on, they will always be your children, in the eyes of the law, they are adults, legally capable of making their own decisions.  Again, this goes back to the better safe than sorry mantra.  Accidents are the leading cause of injury and death for young adults.  While having a legally sound health care proxy (or advanced directive for health care) will not prevent accidents, they can save a lot of time, energy, and money in case any unfortunate circumstance arises where your child cannot make health care decisions for him or herself.  In some cases, a Durable Power of Attorney could also be a beneficial estate planning tool for a young adult, especially if they are paying college tuition in their own name.   

If you have any questions about estate planning, please feel free to contact the Law Offices of Samuel S. Reidy for a free consultation.

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