Tag Archives: Estate Planning Attorney

Thoughts on Charitable Giving

20 Mar

MetroBoston Publication Date March 20, 2013
By Attorney George Warshaw

I was speaking with Mark at the U.C. about this column. He asked me to write about how charitable giving may be used with an estate plan.

Interesting question.

Money you leave by will, trust or otherwise to an IRS tax qualified charity is not included in your estate at death. If your estate is worth $1,250,000 and you leave $250,000 to a qualified charity, your estate is then valued at $1,000,000.

More interesting is what you can do with your charitable estate.

If you want to leave all or a chunk to charity, and possibly avoid even the Massachusetts estate tax problem, you could establish a private tax qualified foundation in which your friends and family participate in making donations to causes that are important to you.

Once or twice a year friends and family get together, remember you in their thoughts and hearts, and do something good with your money and memory. They could use it where it’s needed most – and certainly more efficiently than our spendthrift government.

It’s also a good way of keeping your family together and doing something positive “as a family” with a great result.

There are also Charitable Funds, like Fidelity runs, where they decide how your money is used, or you can direct it yourself in your will or trust.

Say you want to help children or pets. I’ll use the MSPCA and Tenacity, my personal favorites, as examples.

MSPCA, www.mspca.org. You can leave a specific amount of money in your will or trust (a “bequest” in legal talk) or you can target a specific program.

For example, “I give and devise to MSPCA $________ [or _____% of my net estate] for its “Pet Care Assistance Program for the medical care of sick or injured animals.”

Tenacity, www.tenacity.org. Tenacity changes the lives of inner Boston city kids. They learn to play tennis but only after the student and family make a multi-year learning commitment. The kids receive structure, discipline and educational assistance from elementary school through high school. Tennis is the motivator to enroll.

Aside from a bequest, you can give all or a portion of the residue of your estate (i.e. after payment of all debts and bequests.)

For example, “I leave the rest and residue of my estate (or a percentage) to Tenacity to sponsor as many children as possible in its “Middle School Academy.”

Plan it in advance with the charity or just surprise them in your will!

And don’t forget Tenacity and the MSPCA in your planning – helping children and pets is a good thing to do. © 2013 George Warshaw.

George Warshaw is a well-known attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions. Contact him at metro@warshawlaw.com.

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Medicaid – The 5 Year Lookback Rule

13 Apr

Metro®Boston, Publication Date: April 11, 2012
By Attorney George Warshaw

Last in a Medicaid series

I’ve never met anyone who would rather give his or her money to the government than leave it for one’s children, heirs or charity. The government never has as well.

To combat the natural inclination of giving away one’s money and property to qualify for free nursing home care, Medicaid, like in hockey, has a penalty box.

If you impermissibly give away your assets in Medicaid’s eyes, the whistle blows, you are disqualified from further play and placed in the penalty box.

The penalty? Medicaid takes the value of your gift and divides it by the average monthly cost of nursing home care. The result is the number of months you must sit in the penalty box before you can apply again.

There is a safe harbor though, as lawyers like to say, where you can permissibly make a gift and avoid the penalty box: make that gift more than 5 years before you apply for Medicaid and your gift is usually safe.

Your gift is then no longer a countable asset on the government’s list of assets that you must sell and spend before you can qualify for care.

Be careful! Always consult an Elder Care Attorney for your particular Medicaid situation. © George Warshaw 2012.

Read the Medicaid series at www.GeorgeintheMetro.com

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

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Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship.

Love and Kisses until Your House is Gone

15 Mar

Metro®Boston, Publication Date: March 14, 2012
By Attorney George Warshaw

It’s like a scene from “The Bachelor.”

It’s all love and kisses, “til death do us part,” and syrup on the pancakes – until reality sinks in. It’s back to the daily job and routine daily life? Does anyone get or stay married?

Is it any different when an older parent deeds the family home to one’s kids for love and affection? “We’ll use it to take care of you – and the government won’t get it!”

But the deed’s in someone else’s name! What if son or daughter gets divorced, sick or sued? Or if son or daughter needs personal money and borrows against the house – temporarily, of course?

One way of protecting a home is through a trust. A trust is a set of rules constructed by a lawyer to accomplish a goal or protect an asset, oftentimes both.

The trustees own the house on behalf of the trust and not personally – and a parent can name a trusted advisor as co-trustee who can have veto power on the sale or mortgaging of the home.

The house is thus protected from unnecessary sale or mortgage and the personal creditors of the son or daughter.

Caution: Check with a Medicaid attorney before transferring property out of an older parent’s name.

George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.

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Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship.

Giving Mom The Boot

1 Mar

Metro®Boston, Publication Date: February 29, 2012
By: George Warshaw

You may have read about the loving son who filed to evict his 98 year old mother from the home she once owned.

Mrs. Kantorowski deeded her home to her son several years ago. Though he wants to move her to a facility that will better care for her, she doesn’t want to go. Perhaps if he wasn’t trying to sell the house, his motives might have better credibility.

Mrs. K has one thing on her side. She didn’t deed the house directly to her son; she deeded it to him as trustee of a trust for her benefit.

A trustee owes the beneficiaries very special obligations, in this case, mom. It’s called “fiduciary obligations”. It’s a very high standard that courts impose on trustees to act in the best interests of those whose money and property they’re holding in trust.

There’s a rule in trusts against “self-dealing,” meaning a trustee can’t use trust property for his personal benefit, unless the terms of the trust permit it. While a trustee may receive a fee for services, he can’t sell the house and pocket the money – or so mom hopes.

So when mom goes to court next month, we’ll see who gets the boot!

More on this Next Week. © 2012 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at metro@warshawlaw.com.

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Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship.

Do You Need A Children’s Trust?

7 Feb

Metro®Boston, Publication Date: February 8, 2012
By: George Warshaw

Is there anything more important than your children’s upbringing?  What would they do if you died?

Many people add a few scant words in their wills to provide for their children; others create a so-called subtrust as part of a 60-90 page master estate planning trust that requires a flow chart and diagrams to figure out.

Let me give you another idea.

Why not create a separate trust document devoted solely to your children, written in plain English, that they and you can read and understand. Call it a “Children’s Trust”.  Your will, life insurance or master estate planning trust funds the trust and all or part of your children’s upbringing.

You can fund their education, provide for medical care and reward personal accomplishments. You can provide incentives that broaden their personal growth and experiences. Here’s an example:

Let’s say you want your child to experience first-hand the heartbreak of a Katrina-like disaster and helping people in need. In your Children’s Trust, you offer to pay your child a handsome salary for spending a summer working for Habitat for Humanity or the like.

So consider what’s important to you and perhaps your child will “ace” your final exam!

Next week:  Protecting your Pets.

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© 2012 George Warshaw.  George Warshaw is a real estate and estate planning attorney in Massachusetts. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts for individuals and families. George welcomes new clients and questions at metro@warshawlaw.com.

Legal Advice: Laws, and court decisions interpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neither intended as legal advice nor shall establish an attorney-client relationship.

Is it Better to Inherit Real Estate?

20 Dec

Metro®Boston, Publication Date: December 14, 2011
By Attorney George Warshaw

Many people often want to give their home to their children before they die. It’s certainly simpler but it sometimes has unintended tax consequences. (See GeorgeintheMetro.com for last week’s story).

There is an important tax rule regarding inheriting real estate that could save you a bundle of taxes.

When a person dies, the fair market value of any real estate owned must be determined. If you inherit property, you inherit it at its fair market value.

Inherit a house worth $500,000, sell it a month later for $500,000, and there is no taxable gain. But what if your parents only paid $100,000 for it 20 years ago?

It matters not what your parents paid if you inherit it, but it may matter if you receive it as a gift during their lifetimes.

The basic tax rule is this: you inherit property at fair market value; but when you receive it as a gift, you acquire it at the same cost+ tax basis as the giver had in the property. Sell it later for more than cost+ and you could pay a tax that could have been avoided.

So before gifting real estate: always consult your tax advisor or attorney. The foregoing is not intended as legal advice.

© 2011 George Warshaw. All Right Reserved.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.  

Legal Advice: Laws, and court decisionsinterpreting them, change frequently and this article is not updated as laws change. The content and information contained in this article is neitherintended as legal advice nor shall establish an attorney-client relationship.

Before making any legal decision, consult an attorney to see how the foregoing may apply to your circumstances.

Real Estate for Christmas

30 Nov

By Attorney George Warshaw

It’s Christmas and Hanukkah time. Naturally one’s thoughts turn to gifts.

As families get together, oftentimes the discussion shifts to a parent’s home. Is it better to gift it now or inherit it later?

While the answer requires a careful discussion with a tax advisor, it’s helpful to review a key gifting rule.

When a person receives a gift of real estate, the gift is valued for tax purposes at the same cost+ value (or “tax basis” in accountant-speak) as the giver has in it.

Bought a home years ago for $200,000, put $50,000 in improvements into it, and your tax basis is likely $250,000.

Give it to your kids today and the IRS will likely value the gift as worth $250,000. It doesn’t matter if the house is worth $1,000,000, the gifting value is still $250,000.

If your kids later sell it for a million, the IRS deems they made a profit of $750,000 (sale price minus tax basis) – and they may have to pay a tax on the $750,000 gain at the time of sale. That’s painful!

Next week: Is it better to Inherit Real Estate?

Always consult your tax advisor or attorney before gifting real estate. The foregoing is not intended as legal advice. Only an in person consultation with an attorney can establish an attorney-client relationship. © 2011 George Warshaw.

George Warshaw is a real estate attorney and author. He represents buyers and sellers of homes and condos in Massachusetts, and prepares wills, trusts, and estate plans. George welcomes new clients and questions at george.warshaw@warshawlaw.com.