Richard Ely's Presentation

Wills and Estate Planning Seminar

ST. MARY’S MONSIGNOR JOHN DILLON DAY HERITAGE SOCIETY

What’s today all about?

This presentation is notnot intended as legal advice.

Do not take any action related to estate planning

without consulting your attorney.

Catholic Legacy Society | Catholic Foundation of the Archdiocese of Boston

• plan for maximum benefit• keep control and be independent• make sure things go as you want

them to• keep God in mind

Today – how to


• give you ideas and knowledge• make you better informed• not solve all problems• not answer all questions• motivate you to take action

Purpose of this presentation


• help SMH friends and alums – understand the impact of wills and

trusts– plan for your own and your family’s

future

• our hope– people will make sure wills are up-to-

date AND – consider making SMH a beneficiary

Why are we doing this?

About the Msgr. Day Society

• established to promote wills, trusts and long-term gifts.

• pays tribute to Monsignor Day and encourages others to follow his examples of selflessness and generosity.


• planning vacations vs. planning life’s goals

• a fundamental right ...• but, you must have a valid will (and

other documents too!)

Background


• prepared and signed by a legally competent person during lifetime

• states in writing what your wishes are

• conforms with formalities of the law• directs in an orderly manner what

happens with your assets• key document in comprehensive plan

Will: a legal document


• name the person who will administer your estate

• state your wishes about who will be guardians of your minor children

• save taxes• coordinate with your entire financial

plan• allow you to make charitable gifts

What else can a will do?


• you are intestate: leaving nothing to testify what your wishes were with regard to disposition of your property at your death

• MA has a will for you (MA General Laws, Chapter 190. Descent and Distribution of Real and Personal Property )

• relatives share in the will in specified proportions

• distribution may not be what you want

What if you have no will?


• Massachusetts Probate and Family Court has exclusive jurisdiction over probate matters such as wills, trusts, guardianships, and conservatorships.

Important to understand


• you are intestate: leaving nothing to testify what your wishes were with regard to disposition of your property at your death

• MA has a will for you (M.G.L., ch. 190)

• relatives share in the will in specified proportions

• distribution may not be what you want

What if you have no will?


• personal property: all property other than real estate.

• real property: land and generally whatever is erected or growing upon or fixed to the land.

• kindred: next of kin; nearest blood relatives according to the law.

• per stirpes: a.k.a. by right of representation; a person takes or divides the share equally with brothers and sisters only that share of their parent

Some definitions

If you die with spouse and children...

Personal Property


Personal Property

Spouse:


Personal Property

Spouse: one half


Personal Property

Spouse:one half

Children:one half

Grandchildren per stirpes

if any deceased, with children

If you die with spouse and children...Real Estate


Spouse


Spouse:One-half


Spouse:One-half Children:

One-half

Grandchildrenper stirpes

if any deceased, with children,

If you die with spouse and no children, but kindred...

Real & Personal Property



Spouse:$200,000

and one-half of

remaining**If the personal property is not

sufficient to give spouse $200,000, that amount can be obtained from sale or mortgage

of real estate



Spouse:$200,000 and one-half of

remaining*

Kindred: remaining

one half

*If the personal property is not

sufficient to give spouse $200,000, that amount can be obtained from sale or mortgage

of real estate



Spouse:$200,000

and one-half of

remaining*

Kindred: remaining

one half

Your brothers and sisters, then nieces and nephews,

etc.

if both parents deceased*If the personal

property is not sufficient to give spouse $200,000,

that amount can be obtained from sale or

mortgage of real estate

If you die with children but no spouse...


Children,grandchildren, then their heirs

Then your parents, then your brothers,

sisters

Then your nieces

and nephewsand their

heirsthen ...

If you die with no children or spouse...

Your parents, then brothers,sisters, then...

Your nieces,

nephews, then...


Their heirs, then

grandparents,then aunts,

uncles

Other opportunities


• to collect and protect estate assets• to pay the creditors• to preserve and manage the

property• to distribute property to persons and

charities named in a will

Naming an executor


• Probate Court will appoint someone• generally, surviving spouse or one or

more of the next of kin• but, if no one available or willing,

there is a process (under MGL Chap 193) to name an administrator

Who is executor if no will?


• you cannot “will” your children• Probate Court will appoint the

guardian• usually court follows your wishes• without a valid will Probate Court

will decide what is best for your children

Naming a guardian


• in 2009, estate tax exemption is $3,500,000

• in 2010, there is no estate tax

• in 2011, exemption is $1,000,000

• proposals in Congress to stay at 2009 levels

Saving taxes


• unlimited federal estate tax deduction for assets passing to a qualified charity

• often possible to make a larger gift through your will than during lifetime

• can create memorial or endowment• can “build a legacy”

Making charitable gifts


• to keep control• to remain independent• to save taxes, during lifetime and at

death• to protect and even increase income• to avoid outliving your money

Coordinating with other planning

Keep in mind…


• by property ownership

• by beneficiary designation

Make sure your will or your wishes do not conflict with these methods

Property passes in other ways

Also keep in mind…


• especially over concerns about nursing home care

• approach with great caution• advance directives can be very

important

Elder law planning

What other documents?

• trust• durable power

of attorney • health care

proxy• ethical will


• an arrangement under which – one person, called a trustee, – holds legal title to property for another

person, called a beneficiary. – you (as grantor, settlor or trustor) can

be the trustee and beneficiary of your own living trust.

Trust


• living trust – created during your lifetime (inter vivos trust)

• testamentary trust – created in your will

Two types of trusts


• created during your lifetime • can hold assets during lifetime or after

death (from “pour over” will)• private document; assets avoid probate• terms can be very flexible• provide long-term property

management• can help save estate taxes• can help you during your lifetime

Living trust


• created in your will• can hold assets only after death• terms can be very flexible• testamentary trust is NOT a private

document• provide long-term property

management• can help save estate taxes

Testamentary trust


• you authorize someone to act on your behalf in legal or business matters.

• examples: pay bills, invest funds, manage (even buy and sell) property

• “durable” means that the person can act for you even if you cannot review his/her decisions

Durable power of attorney


• a document that allows you to appoint a person to make health care decisions in the event that you are incapable of making such decisions for yourself.

• extremely important to talk with your “agent” about your wishes

• important that your agent understands your wishes and shares your values

• Catholic value play important role

Health care proxy


• different from a financial will that bequeaths “valuables”

• ethical will bequeaths “values”• how can your heirs know

the “why” of your life and your estate plan

the values that motivate you the blessings that you wish to give the lessons you wish to teach

Ethical will


• have I fulfilled my purpose?• what will I be remembered for?• what kind of legacy have I passed

(or would like to pass) along?• what do I want others to know

about my life, values, experiences, etc?

Questions to answer


• health care proxy vs. living will• Sacrament of the Sick• Viaticum• Catholic bio-ethical issues• funeral Masses• suffering • passing on values

Specific Catholic issues


• A Christian steward is one who– receives God’s gifts gratefully– cherishes and tends them in a

responsible and accountable manner– shares them in justice and love with

others– returns them with increase to the Lord

Stewardship issues


• personal satisfaction• make a gift when you thought it not

possible• make a bigger gift than you thought

possible• make statement for future

generations

What about charitable giving?


• consider a “transformational” gift -- for both you and a cause you hold dear

• a gift that will sum up your life for generations to come

• a once-in-a-lifetime gift• gift that can be made during life or

at death

Types of gifts


• increase your income• bypass capital gains tax• increase tax deductions (income,

estate and gift)• pass on a larger estate• you can “pay back,” make a

difference, leave a legacy, help others

Tax and financial advantages


• bequest is the easiest (the best?)• beneficiary designations• charitable gift annuities for income• charitable remainder trust for

income and favorable capital gains tax treatment

• retained life estates, bargain sales, charitable lead trusts and on and on

Charitable giving methods


• specific asset or sum of money• share of, or entire residue, of your

estate• conditional bequest• flexibility or variance clause, if

appropriate• Masses to be celebrated in your

memory

Bequest options

Beneficiary designations

• life insurance policies– personally owned– group plans

• retirement plans– pensions– IRA plans– 401k plans

Age Rate Deduction

FTE

65 5.3% 33% 8.0%75 6.3% 45% 10.3%85 8.1% 57% 14.4%

Gift Annuity Examples

For illustration purposes only; actual values may vary depending on the timing of the gift.


• Explanation to follow• By David Drislane ‘48

Charitable remainder trusts


• gifts of a lifetime– endowments– major gifts

• not for everyone, but certainly for some

• remember the widow’s offering (Lk 21:1-4)

Other Gift Ideas


• donor-advised funds• memorial funds• scholarship funds• general SMH support funds• SMH program-specific funds• contribute to existing or start your own• Endowment donors will be inducted into

the Richard Cardinal Cushing Society

Endowments

Other Questions


• think about spiritual issues• select an attorney and make an

appointment• fill out your personal financial inventory• decide on an executor and a guardian• decide on the distribution of property• consider charitable gifts in your will• consider other documents and planning

The steps in drawing a will

What do wills cost?

• it depends– complexity– time– lawyer

• typically: $800 and up


• how much estate planning does he or she do on a monthly basis?

• avoid lawyers who specialize in other areas

• MA Bar Association Lawyer Referral Service – 866-MASS-LRS or www.MassLawHelp.com

How to choose a lawyer?


• can deal only with “plain vanilla” situations

• the trick is to distinguish between simple and complex situations

• best to rely on personal, customized, individual assistance of a trained attorney

How about software ?

What’s most important?

Take action immediately!!!

In closing,


• Call your attorney or other financial advisor

• Call Richard Ely, Director of Gift Planning and Stewardship, Archdiocese of Boston

• Go to www.CatholicLegacy.com

For more information

Thanks for your participation!


Richard ElyDirector of Gift Planning and Stewardship

The Catholic Foundation66 Brooks Drive

Braintree, MA 02194617-779-3702

[email protected]

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Richard Ely's Presentation

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