Helpful, clear advice for recently widowed persons in the Commonwealth of Massachusetts.

1. YOU’VE BEEN WIDOWED…NOW WHAT? A presentation by Denise M. Kent Law Office of Denise M. Kent 254 Bay Road Hamilton, MA 01982 (978) 468-9000

2. First things: There are many legal and financial considerations that need to be addressed by a recent widow(er). After the initial shock and grief have been absorbed, a person can be left feeling confused and unsure of what to do in order to best secure their financial future and to ensure that their family is protected from the consequences of failing to plan for their own estate. So, what to do after your spouse dies? 2

3. Pull it all together: Gather your financial information; get acquainted with your current asset, income, and debt situation. ***This is particularly important if you were not the primary person to handle finances in the relationship. * You will now be responsible for your own financial maintenance, and it is important that you are able to understand the nature and quality of your investments, and determine the best strategy for ensuring that you will be able to live comfortably within those means. Perhaps you need to downsize your home, or update your life insurance policy? A financial planner can assist you with these issues. 3

4. Consider… You should also consult an experienced probate & estate attorney to probate your spouse’s will, if he or she left one. You may also need to re-title certain assets if they are in your former spouse’s name, collect life insurance policies on your own behalf, and consider whom you have named as beneficiary on your own life insurance policies or retirement plans. If your spouse is still your named beneficiary, then now is the time to change that designation. 4

5. Commonly Overlooked Resources: You may be entitled to certain government benefits such as Survivor’s Benefits from the Social Security Administration, which has information here: http://www.ssa.gov/pubs/10084.html or certain benefits that are payable to surviving spouses of Veterans. Those benefits can include such assistance as bereavement counseling, burial assistance, or death pensions. Specific information on Veteran’s Benefits can be found here: http://www.vba.va.gov/bln/dependents/spouse.htm 5

6. What is Probate? If your spouse left a will, or left any assets in his or her name alone, then their estate will have to be probated. Probate is the judicial process by which a will (or, in the case of intestacy, the estate of the decedent) is reviewed by the court, debts of the estate are paid, and final distributions are made to the heirs. The probate process is public; anyone can go into the probate court and view your will and all of the related probate filings. Your estate, whether you leave a will or not, consists of all of the assets that were in YOUR NAME ALONE when you died. 6

7. In Summary… Probate is primarily a process through which title is transferred from the name of the deceased to the names of the beneficiaries. Certain types of assets are what is called “non-probate assets”- these do not go through probate. These include: Property in which you own title as “joint tenants with right of survivorship”. Such property passes to the co-owners by operation of law and do not go through probate. Retirement accounts such as IRA and 401(k) accounts where there are designated beneficiaries. Life insurance policies with a named beneficiary. Bank accounts with “pay on death” (POD) designations or “in trust for” designations. Property owned by a living trust. Legal title to such property passes to successor trustees without having to go through probate. 7

8. Do I need a Will? Why? Regardless of whether you want to avoid probate, you should have a will, and if you have one, now is the time to update it. A will directs who receives your estate when you die, and it appoints a personal representative, the executor, to make certain your wishes are carried out. If you have minor children, a will enables you to appoint a guardian for their care. 8

9. Strategies: Draft a Basic Estate Plan In conjunction with a Will, Health Care Proxy and Durable Power of Attorney, (perhaps with a Living Will/Advance Directive just to be extra cautious), you can create a solid estate plan that will serve to provide a “roadmap” for your family members to follow and spare them the confusion and guilt associated with end of life decisions and fighting over your assets. Proper planning with a Durable Power of Attorney will provide for the event of your disability as well. So, a Basic Estate Plan consists of: 1. Will 2. Health Care Proxy 3. Durable Power of Attorney 9

10. What exactly is a Health Care Proxy? A health care proxy is a document by which you give another person (your health care agent) the authority to make health care decisions if you should become incapacitated. These are vitally important: your family members might disagree on what treatments you would have chosen, and so it is best to appoint one person (an alternate in case that person cannot serve), thus sparing them the stress and guilt associated with making these decisions. Living wills/advance directives, which address end of life wishes (“pull the plug directions”) are not recognized by law in this state; however, it is helpful to draft one, which gives guidance to your agent and to your treating physicians and hospital. Discuss your wishes frankly with your appointed agent, and give the agent and your personal physician a copy of the proxy. 10

11. What is a Durable Power of Attorney? This is a seriously powerful tool, and yet it is often overlooked or misunderstood by people. A power of attorney is a document that allows you to appoint an individual to act as your agent (called an attorney-in-fact) should you ever become incapacitated, even if temporarily. You decide what powers your agent will have. For example: power to pay your bills, buy/sell property, make investments, run your business, etc. Benefits: allows you to avoid becoming the subject of a public, costly, and often embarrassing Guardianship proceeding, and allows your agent to act without delay. 11

12. Living Trusts A living trust is a document that you, the Grantor, create, and into which you transfer your property for your chosen beneficiary(ies). Property is re-titled such that it is owned by the trust, or is named as the beneficiary of such assets as life insurance policies, again effectively removing these assets from your probate estate. Advantages: PRIVACY & CONTROL If revocable, you retain control over the trust and can amend or revoke it at any time. Helpful for single persons, or those who do not wish to give joint ownership of their assets If Irrevocable , can have significant tax savings Trusts allow you remove assets from heirs who perhaps do not handle money well, or preserve the assets for a child who may be facing divorce or bankruptcy. 12

13. Why should I bother? Advantages to estate planning: Allows you to plan for possible disability, avoid costly & lengthy probate or guardianship proceedings, and to minimize estate taxes. You effectively transfer your wealth to those whom you desire to have it, rather than to the State. Minimizes the very real possibility that your heirs will fight over your assets, or agonize over how or what treatment you should or shouldn’t receive if you are incapacitated. 13

14. Other Postmortem Issues There are many factors that are addressed by estate & probate attorneys, and which are beyond the scope of our discussion today. Depending on your health, you might need to consider some long-term-care planning, or Medicaid planning, in order to preserve assets. Tax issues: the Federal estate tax threshold is $3.5 million in 2009, but the Massachusetts tax threshold is just $1 million; the use of specialized, more sophisticated trusts can minimize the tax bite. Special needs: if you have children or grandchildren with special needs, trusts are a powerful tool in providing for them after you are gone. ** Expect that the process of wrapping up a deceased’s estate, dealing with probate or trust administrations, and final income and/or estate tax filings will take at least a year, due to taxing authorities and also due to creditor’s rights laws in the Commonwealth. 14