Tag Archives: assets

New Massachusetts Homestead Law

A homestead protects a person’s home from certain creditors.  In some states, this protection is automatic – when you purchase a home and live in it, you receive a certain amount of protection from creditors.  In Massachusetts, you needed to declare a homestead, and file it with the probate court — until recently.  On December 16th, 2010, Governor Patrick signed into law a bill containing a series of important amendments to the Homestead Act (Mass. General Laws, Ch. 188).  The new provisions will be effective on March 16, 2011. 

One important change is that homestead protection of $125,000 will be automatic; greater protection (up to $500,000) is available with the filing of a homestead declaration form.  Forms are available to download from salemdeeds.com or from other county registry websites. 

The other important change, particularly if you are doing estate planning (and really, why else would you be reading this blog?) is that a home held in a trust can now be protected by the homestead declaration.  This provides clarity which has been lacking, and it tis a welcome change for homeowners who have elected to place their homes in trust.  Next week I’ll talk about the benefits of putting your residence into a trust.

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Will Basics

What exactly is a will, and what does it do? 

A will is a document that disposes of a person’s property after death.  In addition, it names fiduciaries, including an executor, maybe a trustee, and a guardian of your minor children.  A will can spell out specific gifts (I give my engagement ring to my granddaughter Alice); charitable bequests (I leave $500 to the First Parish Church of XYZ); and dispose of whatever is left in the way that you direct.

A will comes into effect at the death of the testator (person making the will).  Prior to death, the testator can change or amend their will at any time, presuming that they remain mentally competent.  A will must be executed EXACTLY according to state law, there is very little wiggle room to accommodate mistakes in execution.

In Massachusetts, once you pass away, your original will must be located and presented to the probate court of the county you live in within 30 days.  This is important for two reasons.  The first being that someone needs to know where you keep your original documents.  A safety deposit box is not a good place for an original will, unless someone else has access to it.  (This means they’re “on” the safety deposit box, a notation in a power of attorney will not work once you have passed away).  The second important point is that time is, as they say, “of the essence”.  While probate can seem like a long process, getting started should happen pretty quickly.  Once your will is filed, it becomes a public document.  Under no circumstances should you put private financial information into this document!  I say this because there are “do it yourself” kits that insert social security numbers into the will, which is obviously an unwise thing to do.

So here is your “to do” list:

— Think about guardians for my children

— Who would I want to be the executor of my estate?

— What charities or special bequests do I want named in my will?

— Have a will drafted by an attorney I trust

— EXECUTE MY DOCUMENTS

— Put them somewhere safe, and tell someone where they are

 

I will write about the other documents in a basic estate plan in later posts.

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