Estate planning involves more than just a last will. We follow a thoughtful process to help our clients identify and carry out their goals. The result might be a basic plan to arrange property to pass as the client wishes at death, and to allow efficient management during the client’s lifetime. For estate tax efficiency and other reasons, the client might want to include gifting strategies and other advanced tools in the plan. We take a holistic view of the client’s situation because assets and personal circumstances can impact the plan. Assets such as closely held business interests, life insurance, and retirement benefits, or assets that require a purpose trust, all benefit from special planning. Similarly, young adults, engaged couples, couples who will be living together while unmarried, families with special needs children, and clients who want to plan for their pets all need different types of documents and provisions. For all our clients, proper planning to protect against future unknowns is our job.
- The Estate Planning Process – Each plan we draft is unique, to meet the goals of each client. We start every relationship with a discussion of the client’s goals and we keep those in mind throughout the process. Our planning process includes a detailed review of the client’s assets and how they are owned. This helps us to identify issues related to estate tax, income tax, probate avoidance, and ensuring the property will pass according to the client’s wishes. We also go discuss the client’s personal circumstances, family, and any other intended beneficiaries. This helps us to recognize challenges that might come up when an estate plan is being administered and draft with those issues in mind. For example, an estate plan might be designed to limit family battles, or to provide financial oversight and asset protection for certain beneficiaries. When we draft an estate plan, our work isn’t done when the documents are signed. We continue to assist our clients to fund their plans. Clients can hold their assets during life in a way that allows them to retain control of their wealth while avoiding probate, minimizing expenses, and reducing transfer taxes (such as estate tax, gift tax, and generation skipping transfer tax).
We view education as a fundamental element of our work, and we do our utmost in helping our clients understand each and every document they sign. To assist in the education process, we provide written explanations of the documents and also flow charts to visually explain the plan. We continually publish updates about planning issues and changes in laws that may impact our clients.
- Advanced Planning & Gifting – Many of our clients have specific goals that require more advanced planning. These personal goals might include reducing or eliminating estate tax, making large gifts in a tax-efficient way, or maximizing the benefits of a gift to charity. These gifts often involve irrevocable trusts or business entities with particular features and funny names. Depending upon the client’s goals, a gifting strategy may include generation skipping transfer tax (GSTT) planning, a grantor retained annuity trust (GRAT), a qualified personal residence trust (QPRT), a family limited liability company (FLLC), or a self-canceling installment note (SCIN) as well as the charitable planning techniques discussed below. Large gifts generate gift tax reporting obligations to the IRS, and we’re here to help with that. When clients make taxable gifts, we often prepare the gift tax returns. Gift tax returns are similar to estate tax returns, which we also prepare, and both are very different from income tax returns. We do not prepare income tax returns, but we can advise the client’s income tax accountant about income tax-related issues in a client’s estate plan.
- Family & Closely Held Businesses – Whether building a start-up or growing a well established enterprise, Bove & Langa assists the family entrepreneur with all aspects of the business from governance to succession planning involving multiple generations. We have helped many families and closely-held businesses to establish buy-sell agreements. These agreements clarify each owner’s rights and obligations under different scenarios, such as a partner’s death, retirement, or termination of employment. One of our most basic services for business owners is also the most important. We help arrange the owner’s stock shares, LLC interests, or other business interests so they will avoid probate at the owner’s death. Because the probate process often includes substantial delays, and because an executor or personal representative’s business powers may be limited, keeping business interests out of probate is essential.
- Prenuptial Agreements – One important estate planning and asset protection tool is a prenuptial agreement. It can be used to protect assets both in the case of divorce and in the event of death. Prenuptial agreements serve to protect non-marital property from division in the event of divorce or death. Often they are used to keep a large inheritance separate from the marital estate. In a “kitchen sink” jurisdiction like Massachusetts, in which the Court will consider everything in determining a property settlement during a divorce, these agreements can be key. It is our goal to protect your assets and work with you, your intended, and your intended’s attorney to fashion a prenuptial agreement that will benefit you and withstand attack down the road.
- Planning to Live Together – Planning is key for individuals that are unmarried but living with a partner, because they are not protected under the law like married couples. Over the years, we have helped many cohabiting, unmarried couples to create a mindful plan for their future. Our goal is to make sure that if our client or their partner dies or becomes incapacitated, there will be peace of mind. This planning should include traditional estate planning documents like a durable power of attorney, healthcare proxy, and will, but it may also involve other creative solutions. For example, the couple might enter into a cohabitation agreement. This formal agreement can be made when the couple starts living together, or after the fact, and it can be an excellent way to protect both parties. It may handle a variety of issues that can arise, including how property and debts will be handled if the couple stops living together.
- Young Adults – Although many young adults overlook estate planning, under the theory that their current wealth does not necessitate an estate plan, a basic estate plan is important regardless of asset level. Many young adults (and their parents) do not realize that once they turn 18, their parents no longer have access to their finances or their medical providers. Even though some young adults might like this idea, if something was to happen to render such a person incapable of making financial or medical decisions, that person’s family would have to go court (which is time consuming and expensive) to be named that person’s guardian and conservator. Furthermore, if that person died without a will, her assets would be distributed under the laws of intestacy rather than following her own wishes. We also believe that it is important to educate young adults and young couples on the importance in planning for the future. It is not uncommon for a young couple to become interested in estate planning when they have a child (as they want to ensure that their child is taken care of if they are unable to do so themselves). We strive to educate these couples on what type of planning is best for their situation, whether they have extensive assets or not. Often we use standby trusts (trusts which are designed to remain empty – to stand by – until the survivor of the couple dies) to allow a couple, who does not need tax planning, to provide for their children. Utilizing this trust structure has several advantages to leaving everything to your children under your will, including allowing assets to remain in the care of a trustee, out of court supervision, for long after your death. Furthermore, because these trusts are less complex than trusts with extensive tax planning provisions and are only designed to be funded after the death of the survivor of the couple, they are more accessible to someone with fewer disposable assets.
- Supplemental Needs Trusts – Planning for individuals with disabilities who may need public assistance is an important area of trust law that, if done improperly, can have devastating consequences. There are two basic types of special needs trusts that we draft for our clients: third party supplemental needs trusts, and (D)(4)(a) Trusts (which are self settled). The goal of a third party supplemental needs trust is to hold gifts or inheritances for a person with disability in a way that is out of reach of Medicaid. The goal of a (D)(4)(a) trust is to allow an individual, though a parent, grandparent, legal guardian, or the court, to transfer that person’s own funds into a trust to maintain eligibility for MassHealth. These two types of trusts have different provisions when the person with disabilities dies. A (D)(4)(a) trust must repay MasssHealth from the remaining funds in trust. In contrast, a third party supplemental needs trust can distribute the property to other friends or family, without MasssHealth payback. Our goal is to ensure that you or your friends and family with disabilities can receive supplemental care while maintaining eligibility for MassHealth.
- Life Insurance – Life insurance protection is an important part of almost every estate plan. By reviewing our clients’ beneficiary designations and making recommendations, we can help our clients to avoid major catastrophes. In developing a client’s estate plan, we are careful to recommend ownership and beneficiary designation in a way best for the family’s protection, focusing as well on the plan that will produce the least possible tax and best fit for the family structure. We also regularly assist in the evaluation and appropriateness of insurance proposals the client may receive from other sources. Life insurance is particularly valuable because if it is structured correctly and held in an irrevocable life insurance trust, or “ILIT,” it can avoid all estate tax, and income tax, at the death of the insured.
- Purpose Trusts – What if your goal is not to provide for a person, but instead you want to accomplish a goal or protect certain property? We can help accomplish your goals through a non-charitable purpose trust. This type of trust does not have any human beneficiaries. Instead, the trust is designed and funded to carry out a stated purpose, for example, maintaining a family vacation home. Once the purpose is complete, any property remaining in the trust can be distributed to individual beneficiaries or to charitable organizations.
- Caring for Pets – Our firm has a commitment to ensuring the well-being of the whole family, whatever the species! Whether it is the champion (and valuable) show-jumper, the eastern box turtle whose life span can last 100 years, or the faithful dog, we support individuals who wish to provide for their companion animals within their estate plan, often through the use of a trust.
- Retirement Benefits – Many people are surprised to learn that the retirement benefits so carefully grown during lifetime can be difficult assets to pass along to heirs. Our firm provides counsel to individuals who wish to maximize the tax-free element of such benefits as well as providing options to protect those benefits from a family member’s heirs.