ESTATE PLANNING OPTIONS FOR INDIVIDUALS WHO ARE REMARRYING AND     HAVE CHILDREN FROM A PRIOR MARRIAGE

           Getting married a second or third or even a fourth time can be exciting if you have found your soul mate and learned from you mistakes, but before you take what you hope will be your final plunge into marital bliss, consider whether you want your children or your new spouses's children to inherit your estate when you pass away.  Without proper planning, your new spouses's children could inherit your estate while your children receive nothing!  Or, your spouse could deplete your estate so there is nothing left for your children. Even worse,  after you die your second spouse could remarry again and your estate could belong to the spouse she married after you died.  The unpleasant possibilities are endless.

             With proper planning, your estate will pass according to your wishes.  You can establish a plan in which your children inherit your estate and your new spouse's children inherit your new spouses estate.  If you want your estate combined with your new spouses's estate with all of the children sharing equally that can happen too if you plan accordingly.  Or you might want your spouse to inherit everything along with the ability to decide how your estate will ultimately be shared when your spouse dies.  Here are some options:

          1.  You can set up a trust that pays income to your surviving spouse while preserving the balance of your estate for your children or other beneficiaries.  If you live in Massachusetts and your combined estate is $2,000,000.00 or more the trust will need to be a qualified terminable interest property trust so the assets in that trust are not taxed.  All that means is that the surviving will receive trust income for life.  The principal of the trust can remain in tact for your final beneficiaries.  If your combined estate is less than $2,000,000.00 you are not worried about tax issues so your spouse can receive as much or little from the trust as you find appropriate.

         2.  You can draft your simultaneous death provision so that if you and your spouse die together your estate goes to your beneficiaries and your spouse's estate goes to his or her beneficiaries.  The correct wording depends upon whether or not your estate is taxable.  If you do not have a taxable estate you want a presumption that you survived your spouse.  Otherwise, your estate goes first to your spouse then to your spouses's heirs.  If you have a taxable estate, you might want a presumption that your spouse survived so you can take advantage of the marital deduction and other planning options available to married couples.  Marital deduction planning only works if you have a surviving spouse.

        3.    If you want to leave everything to your spouse with maximum ability to use assets during life and decide who will be the ultimate beneficiaries, you want to set up a trust with a power of appointment allowing your spouse to decide by his or her will who your ultimate beneficiaries will be.

      4.  Finally, you could leave everything to your spouse outright (not in trust) or in a trust your spouse completely controls, even to the extent of removing all the assets from the trust.

        With proper planning almost anything is possible!

           Please let me know if this blog is helpful or interesting!  I appreciate any and all feedback.

An easy way to protect ytour home from creditor claims

                      AN EASY WAY TO PROTECT YOUR HOME FROM CREDITOR CLAIMS

            Filing a homestead with the Registry of Deeds is a quick, easy and inexepnsive way to protect your home from creditor claims.  A homestead will not protect against claims filed prior to filing the homestead and it will not protect against monies due on your mortgage, for taxes, child support or monies due Mass Health.  The filing fee for a homestead is only $35.00.  A homestead declaration can be prepared by an attorney or an individual can prepare it without an attorney by using the forms available online.  A homestead protects the equity in your principal residence.  Ahomestead can be filed to protect equity in a home that is owned by a trust.  Unfortunately, it does not protect a second home or a vacation home.  To be valid, the declaration must be filed with respect to the home you make your residence.  You can only have a homestead on one home.

            In March, 2011, the homestead law was revised to provide some protection even if you do not file a declaration with the Registry of Deeds.  The new law provides homeowners with an automatic $125,000.00 homestead. Homeowners who do file obtain homestead protection in the amount of $500,000.00.  This means up to $500,000.00 of equity is protected against creditors.  The homeowner's spouse is also protected even if his or her name is not on the deed or the mortgage. 

               The homestead for seniors who are 62 years of age or older is $500,000.00 per ower meaning that a married couple who are both over 62 years of age now can protect $1,000,000.00 in equity.  If you have a homestead that was filed when you were not yet 62 years old and you are now 62 years old, you should re-file to ensure protection under this section providing additional coverage for individuals 62 years of age and older.  There is no limit on how many seniors can live together and claim the $500,000.00 homestead.  For example, if 4 individuals each 62 years of age or older live together in a home with $2,000,000.00 of equity all $2,000,000.00 of equity is protected from creditor's claims. 

            If you have not filed a homestead with the Registry of Deeds, you should file one.  If you do not know, if one if filed,  we can go online and find out.