SSB July 2021 Newsletter

Samuel, Sayward & Baler LLC

July 2021 Newsletter

Partners' Letter

“Everything good, everything magical happens between the months of June and August.”

- Jenny Han

Dear Clients and Friends:

Summer is here and we are very excited to announce that we are now seeing clients (fully vaccinated) back in the office! We are so happy to be able to see your smiling faces again. We are still following the recommendations of the CDC, and we’re still offering meetings by telephone and Zoom. We ask that when you come to our office for your meeting or document signing, that you please bring a copy of your vaccine card.

If you own a vacation home, you may be enjoying that property right now near the ocean or lake or mountains with family and friends. With summer in full swing, this is a perfect time to think about the future of your vacation home and how to pass it down to family members and future generations. Attorney Baler has written "Five Thoughts About Planning for Your Vacation Home," where she offers five insights on what to keep in mind when planning ahead for that second home.

We are just about half way through summer and young adults across the state are preparing to head off to college at the end of August. This is now the perfect time for you to have the "what if" discussion with your child regarding emergency situations. When your child turns 18 they are considered an adult in the eyes of the law and it is important that your son or daughter have certain legal documents in place to permit someone to make decisions and access their information (bank accounts, school records, medical records etc...) in the event of an emergency. Attorney Frank Mulé discusses the particular documents your child should have as they head off to college.

This quarter's Smart Counsel Series, "The Booming Real Estate Market: What Sellers and Buyers Need to Know," featuring Adam Hayes of Milestones Realty and Ellen Grubert and Janice Lippman of EllenandJancieTeam/Compass, was held on July 22nd. These real estate experts shared their expertise on this very active real estate market, offered tips for sellers and buyers, and talked about what you can expect if you venture into the fray. Adam and his team have a particular focus on representing seniors who have owned their homes for decades and are now selling that home. Adam spoke about issues specific to this growing population. Attorney Suzanne Sayward closed out the program by speaking to some of the tax aspects of selling property and what sellers who own their real estate in trust need to know. Click here to the view the webinar.

In this issue:

5 Thoughts About Planning for Your Vacation Home
When Preparing for a Child to Go Away to College, Don’t Forget Their Estate Plan Documents
Ask SSB: Does signing a new Health Care Proxy revoke my current Health Care Proxy?
What's New at Samuel, Sayward & Baler LLC
Employee Profile - Meet Victoria Ung

As always, please feel free to reach out to us with any questions, or ideas for future newsletter articles or topics for our Smart Counsel Series. And if you know someone who would like to receive this quarterly newsletter, please send us their email address, and don’t forget to forward this to your family and friends.

Have a safe summer,

Suzanne R. Sayward

Maria C. Baler

Five Thoughts About Planning for your Vacation Home

By Attorney Maria Baler

With summer upon us and pandemic-induced quarantines a distant memory, at least here in the Northeast, we are all looking forward to some fun this summer. If you are lucky enough to have a second home you are probably spending some well-earned vacation time there right now with family members, creating lasting memories. If you are the owner of a vacation home, it’s never too early to think about the future.

Is this a property you wish to pass on to your children and grandchildren so the good times can continue long after you’re gone? In many cases, your heirs may not be able to purchase a vacation home on their own so it is especially important to make sure the property will be there for them to enjoy. Here are five things to consider when planning for your vacation property:

1. Do Your Children Share Your Hopes and Dreams?

You may intend to leave your vacation home to all of your children to use and enjoy for their lifetimes. When planning, it is important to consider whether these intentions are realistic. Take a hard look at how the property is used and by whom. Do all of your children enjoy the property and will they continue to do so in the future, taking into account their busy lives and where they live? Or is the home primarily used by one or two children who live close enough to visit often? When planning for the future of your vacation home, talk to your children about your plans and encourage them to be honest with you. Knowing who wants to keep the property and who has no interest in owning a second home is vital information before you begin your planning.

2. How Will the Bills Get Paid?

If you intend for your children to contribute to the cost of maintaining the property after your death, consider whether all of your children can afford to do this, or whether it makes sense to leave the property (and the financial burdens of its maintenance) to the child or children who can afford the expenses that go along with owning such a property. If you are financially able to do so, you may want to leave extra money to support the property which can be used to pay ongoing expenses and make repairs as needed, and take the burden of those expenses off of your family members. If this is the route you choose to go, don’t underestimate the funds that may be needed, and err on the generous side if you are unsure.

3. How Will Decisions be Made?

No matter how smart your children are or how well they get along, it is always helpful to have a plan for how decisions will be made – such as who can use the property and when, what improvements will be made to the property, and whether the property should be sold. It is helpful, whether in a Trust or other written agreement to set out rules that clearly govern how these matters are decided, and how disputes are resolved. If a child cannot contribute to his share of the expenses, or wants to sell his interest in the property, a structured plan will allow for such transitions, including the opportunity for siblings to buy out one another.

4. Don’t Forget the Tax Planning.

Vacation homes are often a beloved asset, but they are an asset nonetheless, subject to estate tax like the other assets in your estate. It is crucial to take into account how estate taxes will be paid when planning for a vacation home that will not be sold. In some sad situations, the next generation would love to keep the vacation property, but the estate taxes payable at the parents’ deaths are so steep that they cannot afford to do so. Consider undertaking planning to reduce the tax bite at your death by gifting the property or an interest in the property during your lifetime, and at your children’s death by incorporating generation-skipping planning. If taxes must be paid, consider using life insurance to provide a resource from which estate taxes can be paid, reducing the possibility that the property will need to be sold to satisfy a tax obligation.

5. Transfer during lifetime or at death?

Many vacation homeowners intend to continue to own their property during their lifetimes and leave the property to their heirs at their deaths. By doing so, they remain the sole decision-makers and keep their options open: they could sell the property, rent it out, change their minds about who will inherit it, etc. However, transferring ownership to the next generation during the parents’ lifetimes can make sense for tax planning or long-term care planning reasons. As Congress debates estate tax changes that could reduce the federal estate tax exemption, lifetime gifts of vacation homes are something that should be considered, balancing the capital gain tax and control implications of such a gift against the estate tax cost of retaining ownership until death.

Thoughtful and timely planning for a vacation property can ensure the property will pass to future generations in a way that will minimize issues and maximize the chances the property will be enjoyed by your family for generations to come. If you have a vision of your descendants enjoying your beloved cottage and building memories there, take the necessary steps now to make your wishes a reality. Failing to plan and simply hoping that your children will “figure it out” is the clearest path to family discord, which is the last thing you need on a relaxing family vacation.

Maria Baler, Esq. is an estate planning and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), and the current President of the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.

Child Going Away to College? Don’t Forget Their Estate Plan Documents

By Attorney Francis R. Mulé

With the month of August upon us, parents around the country are participating in the time-honored tradition of preparing their young adult children to go away to college. While it’s certainly important to ensure that they have the necessary clothing, bed linens, and other such items, it is also important to have certain legal documents in place to permit someone to make decisions and access information in the event of an emergency.

While every parent knows that a child becomes a legal adult upon turning 18, most parents fail to appreciate the full extent of the consequences. In particular, once a child turns 18, not only do parents no longer have the legal authority to make financial or medical decisions on that child’s behalf (even in emergencies), they also no longer have the legal right to access that child’s medical, financial, or educational information. This means that, without prior planning, not only would parents be unable to make medical or financial decisions on behalf of their child in the event of an emergency, they might not even be permitted to know the details of what happened or the nature of their child’s situation.

It is therefore incredibly important for college-aged children to have the following documents in place to allow decisions to be made (and information to be accessed) in the event of an emergency:

1. Durable Power of Attorney: This document designates one or more people to act on the child’s behalf regarding finances and assets (e.g., bank accounts, credit cards, student loans, etc.).

2. Health Care Proxy: This document designates someone to make medical and health care decisions on the child’s behalf if the child is unable to make such decisions.

3. HIPAA Authorization: This document authorizes the child’s health care providers to discuss the child’s protected health care information with the people named in the document. Unlike the Health Care Proxy, the HIPAA Authorization does not confer any decision-making authority on the people named in it.

4. FERPA Authorization: This document authorizes the child’s college or university to disclose the child’s protected financial and academic records to the people named in the document. As with the HIPAA Authorization, this document does not confer decision-making authority on the people named in it.

We encourage all of our clients with college-aged children to discuss these matters with their children and to contact our office if your child is interested in having these documents prepared.

Ask SSB

Q: Does signing a new Health Care Proxy revoke my current Health Care Proxy?

A: Yes. A Health Care Proxy is a document that appoints a person to make health care decisions on your behalf when you cannot (your “Health Care Agent”). Sometimes when you visit your physician’s office or the hospital for a procedure or emergency, you will be asked to fill out and sign a new Health Care Proxy that is a standard, basic form. If you have already completed a Health Care Proxy as part of your estate plan, you should not sign the new Health Care Proxy. Doing so revokes and replaces your estate plan Health Care Proxy, which has expanded beneficial powers to ensure your Health Care Agent has the authority to take the necessary steps to assist you without court involvement.

Instead, when you receive a copy of your Health Care Proxy from us, you should provide a copy to your physician’s office immediately so that it is included in your medical records.

Additionally, we recommend saving the Health Care Proxy electronically so that you may access and provide it via your Smartphone in an emergency. Electronic and physical copies of your Health Care Proxy should be provided to your Health Care Agents for the same reason, too.

An experienced estate planning attorney can assist with completing a Health Care Proxy if you or a family member over age 18 have not completed one yet, or it is time to update your Health Care Proxy because you wish to have other Health Care Agents designated or it is several years old.

What's New at Samuel, Sayward & Baler

Congratulations to Attorney Frank Mulé as Chair-elect of the Massachusetts Bar Association's Young Lawyers Division Board of Directors. The Young Lawyers Division is responsible for integrating new lawyers into the legal profession by providing the necessary tools new practitioners need to excel, including opportunities for civic outreach and networking with peers. The Massachusetts Bar Association (MBA) is a non-profit organization that serves the legal profession and the public by promoting the administration of justice, legal education, professional excellence and respect for the law.

Our beloved Lynne is moving to Dallas!

For three and half years, Legal Assistant Lynne Abe, has been one of SSBs most beloved employees and a good friend. Starting at SSB in 2017, Lynne has been assisting the admin team and the legal team with scheduling appointments, corresponding with clients and putting together document packages. More recently Lynne has been honing her paralegal skills, working with Senior Paralegals Karen Margeson and Janine Cronin to draft estate plan documents.

Lynne's husband has been transferred to the great state of Texas (Dallas) and Lynne will be leaving SSB mid-August. She's promised not to become a Dallas Cowboys fan. :-)

Everyone at SSB wishes Lynne and her family all the very best on this new adventure, and we hope Lynne makes her way back here one day soon.

The team at SSB threw Lynne a surprise going away party, and made sure she would fit right in the day she lands in Dallas...