March 2022 Newsletter

Lannik Law, LLC | Your Elder & Estate Planning Law Firm | Legal Lines News | Estate Planning and Elder Law

March 2022 Issue

What are the Responsibilities of a Personal Representative in Massachusetts?

Do Gifts Affect MassHealth Eligibility?

A Personal Note From Susana

Client Testimonial

What are the Responsibilities of a Personal Representative in Massachusetts?

When a person dies, their loved ones are often left with many questions. What has to be done? What do we do with their belongings? Do we need to pay their bills? Being named as a “personal representative” (an executor) of an estate is a privilege and an obligation. In addition to having feelings of grief, there are a number of financial and practical matters that require attention. Duties can take up to a year or longer depending on the value and complexity of the estate. The honor of accepting the role of a personal representative requires you to act in good faith. This does not mean you have to act alone. In fact, it is in your and estate’s best interest for you to hire an accountant for tax filings and an estate planning attorney to help you with legal issues along the way. Professional advice will be imperative during the process of distribution and probate.

A personal representative of an estate is an individual named in a will to administer the last will and testament of a deceased person. They will oversee the process to manage affairs and wishes of the decedent. The personal representative is usually appointed by the individual who makes the will, called the testator, or appointed by a court.

If you are notified by the testator prior to their death that you will be appointed as personal representative, interview them. It is best that you sit down and make a plan together. It is crucial to keep detailed records of important documents and understand how they want their final wishes carried out.

Organizing documents prior to death will alleviate additional stress after death. Create a notebook containing important documents, passwords, and keys such as:

  • Life insurance policies and beneficiaries
  • Banking information and passwords
  • Statements for IRAs, Certificates of Deposit, and 401K accounts
  • Statements for mortgages, auto loans, and other outstanding debts
  • Deeds to land and property
  • Vehicle titles
  • An inventory of heirlooms, jewelry, guns, and personal items to be distributed after death
  • Safety deposit box keys and location
  • Burial plot deeds and headstone requests
  • Vehicle keys, keys to storage units, storage sheds, safes, etc.

Both personal representatives and beneficiaries have certain rights through the probate process. These rights are outlined to protect each party, while assuring the personal representative is doing their job in a timely manner. Some fiduciary responsibilities include:

  • Meet with an estate planning attorney.
  • Obtain a copy of the will and record it with the court. Even if the estate does not go through probate, in most cases recording the will is required.
  • Notify government agencies such as the Social Security Administration or Veterans Affairs that the decedent has passed away. This will stop future payments and direct deposits from being issued after the date of death.
  • Plan funeral arrangements. Contact the funeral home to request a burial or cremation. Schedule a time to choose a casket or urn. Schedule a date for the visitation, memorial, and graveside ceremony.
  • Notify banks, credit cards, and creditors to have accounts frozen. This will reduce the risk of unauthorized withdrawals and charges. While most people are grieving after a death, it is not uncommon for individuals to attempt to take advantage of the chaos associated with death. They may try to withdraw funds or open new credit before anyone notices it has happened.
  • Distribute to heirs and beneficiaries in a timely manner.
  • Set up an estate bank account.
  • Represent the estate in court when necessary.
  • Maintain properties until they can be transferred or sold. Complete required yard maintenance, respond to tenants’ requests in the event properties are leased, continue to pay utility bills, stop newspaper delivery, etc.
  • Disposing of unwanted property. For instance, if grandpa had an old scrap tractor collection that was unwanted by heirs, this would need to be hauled away or arranged to be sold.
  • Pay the estate accountant and attorney with funds from the estate.
  • Pay estate taxes, file individual tax returns of the deceased, and file an estate tax return if required.

There are also tasks that are not required of a personal representative. A personal representative does not have to distribute funds or verify amounts to beneficiaries at notification. The best way to avoid issues with heirs and beneficiaries of an estate is to be upfront with a timeline of expectations. Communicate clearly and notify them of the expected payment of their inheritance. Proper communication will help to avoid frustration and disappointment.

Following these estate planning and probate guidelines will help to streamline the estate settlement process. To alleviate even more stress, ask an estate planning attorney about a living trust while meeting with the testator prior to their death. A living trust is an estate planning tool that can eliminate headaches and paperwork associated with the probate process. Your successor trustee can supervise the transfer to beneficiaries and simplify the settlement process.

Do Gifts Affect MassHealth Eligibility?

For the first time in many years, the Internal Revenue Service has increased the amount of the federal annual gift tax exemption from $15,000 to $16,000 in 2022. The gift tax is a federal tax that is applied when a person gives a gift, usually cash or real estate, to someone else without a payment valued at fair market value. If the gift exceeds $16,000, it is the donor’s responsibility to pay the tax. This federal gift tax exemption varies greatly from gift guidelines allowed for MassHealth (Medicaid) eligibility.

It is very common to confuse the IRS gift exemption with MassHealth eligibility requirements. For MassHealth purposes, the state has a “look-back” period. During this period of time, all past gifts and transfers are investigated. In Massachusetts, and in most states, the look-back period is five years. What this means for the applicant is anything that is sold or given to someone in the past five years will count against them for MassHealth approval of benefits.

With few exceptions, the applicant is allowed their primary residence and an additional $2,000 in assets and their spouse is allowed $137,400 in additional assets in order to be approved for MassHealth benefits. Any assets above these amounts would need to be spent down or used for a long-term care facility before MassHeath benefits would begin. However, there are options for receiving assistance from MassHealth while still protecting your hard-earned life savings. Speak to an attorney with extensive experience in helping families obtain MassHealth assistance to pay for nursing home care.

A Personal Note From Susana

Dear Friends, Clients, and Colleagues,

This is a special note about our“Beyond the Law” webinar series. These monthly presentations are part of ourcommitment to move beyond sharing our legal expertise with the communities we serve, to adding value to the community by “sharing” information and services our clients and community acquaintances might need. We at Lannik Law believe the community at large will be well served through these and continued educational offerings that are address some of the problems we face on a daily basis. The offerings range from fun (last month jewelry appraisals) to serious, (this month’s addressing Caregiver Burnout).

In February, Aimee Berrent, an experienced gemologist, made the interesting point that condition of jewelry will affect its value. So instead of throwing whatever I have in a heap, I now am placing all items into little soft bags or specialty boxes!

Photo of Susan Z. Robins

Having served as a caregiver myself, I am eager to learn from Susan Z. Robins of Ezra Homecare about how to prevent burnout and still address the care needs of a loved one. For those who love animals, Susan has a beautiful standard poodle, named Shadow, they are a certified dog-therapy team, I hope will appear with her!Please join us on March 30th for “Minimizing Burnout for Family Caregivers”.

Our webinars are given at lunch hours. I am looking for suggestions from the public about what they want to learn either about the law (to create a second webinar series) or about other topics that could be helpful. Please forward your suggestions to me at our website:www.lanniklaw.com.

With best regards,

Susana Lannik

Client Testimonial

“My estate planning experience with Lannik Law was easy, pleasant, and thorough. All of my concerns were addressed with care and professionalism.”

– Stanley C., MD

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