Schmidt & Sikes, P.C.

Support and protection for those who need it most.

June 22nd, 2015 by Marilyn J. Schmidt, Esq.

Should I Be Putting My Estate Into a Trust?

Defining a Trust

A trust is a legal instrument that holds property for the benefit of named beneficiary/beneficiaries and is controlled by the “trustee.”  The creator of the trust is known as the settlor.  She/he has the ability to name the trustee, define the purpose of the trust, and provide guidelines or rules for the disbursements.  The trustee has a duty to manage the property and to distribute income or principal from the trust, along the lines specified in the trust instrument.   A trust can be created and funded while you are still living; or it can be created and funded upon your death, through provisions in your will.  A trust may be revocable (meaning that you can amend it or abolish it at any time) or irrevocable (where you give up control over the trust and its assets in order to gain some other advantage, such as preserving government benefits).

Protecting Your Loved Ones’ Financial Needs

One common type of trust is set up by a parent or a grandparent and allows the assets to benefit a child until she/he reaches a certain age (this age is commonly 22 or 25).  This way, the child can be provided with support (such as college tuition), but cannot access (and potentially waste) the assets of the trust. The trust instrument may give the trustee discretion over how much to distribute to the beneficiary/beneficiaries.  Alternatively, the trust may be very specific under what circumstances, and how much, income or principal can be distributed.

Preserving Eligibility for Government Benefits of Someone with Special Needs

A supplemental needs trust is set up for the benefit of someone with special needs.  There are many federal or state programs that have asset or income limits, including MassHealth, Section 8 housing and food stamps.  By creating an irrevocable Special Needs Trust, the Settlor can provide the individual with financial support or services without jeopardizing his/her eligibility for those benefits.   Note that the trust cannot be revocable; the government will then consider the assets in the trust to be available to the beneficiary, so she/he no longer qualifies.  Most importantly, there are restrictions on the use of the trust funds.  The funds cannot be used for food or shelter or other basic needs.  They can be used for “supplemental” needs, such as clothing, recreation, care managers or paid companions.  Most importantly, a supplemental needs trust cannot be set up with the assets of the beneficiary; they must be set up as a gift or an inheritance.  In general, the government does not condone people impoverishing themselves by gifting their money away, or putting it in a trust, and then asking for their own care to be paid for by the state.

If the supplemental needs trust is to be set up with assets that already belong to the individual with special needs, the only viable option, under state and federal law, is a pooled trust.  There are certain non-profit entities that are authorized to hold the assets and to control their disbursement.  Each entity has its own required trust document.  The settlor can name residual beneficiaries of the trust.  When the beneficiary passes away, the state will take from the remaining funds in the trust reimbursement for its expenditures for the beneficiary (such as payment of a nursing home for a set number of months).  After that, if there are any trust assets left over, they get passed onto the named residual beneficiaries.  Meanwhile, the individual with special needs gets to keep their government benefits, and the quality of his/her life may be enhanced with things like education, recreation, and supplemental services.

Estate Planning

A trust can also be an important estate planning tool for minimizing, or even avoiding, taxes. Under federal law, estates get taxed if they are worth more than 5.4 million dollars; not a worry for most people.  However, in Massachusetts, an estate worth one million dollars or more can be subject to state taxes.  Note that this includes your real property, bank accounts and valuables. It does not include retirement accounts or insurance policies where there is a provision for named death beneficiary/beneficiaries.  This is because when the retiree or the insured passes away, those assets do not go into the estate of the deceased.  Instead, they are paid directly to the named individual(s).

For some, the best benefit of a trust is that it avoids probate court.  This saves legal fees and court costs.  It also keeps their financial information confidential, instead of having the details filed in a public forum – court.

Who Should Serve as Trustee?

Anyone can serve as trustee, including the settlor, a family member, a friend, an attorney, or a financial institution.  In fact, more than one person or organization can serve as co- trustees.  The trust may provide for payment for the trustee’s services. The trustee has a fiduciary obligation to the beneficiaries of the trust. She/he must follow the instructions of the trust when distributing income or principal. Generally, a trust is not subject to court oversight. To protect the best interests of your beneficiaries, it is important to choose someone you “trust.”  You can certainly add a provision to the trust instrument allowing you or the beneficiary to receive an accounting of the financial transactions of the trust.

Should Your Estate Planning Include a Trust?

A simple consultation with an elder law attorney can help you decide if a trust is right for you or your family.  You may want to be sure that this attorney is a member of the National Academy of Elder Law Attorneys.  That way, you can be assured that they have the required expertise to guide you.

March 23rd, 2015 by Marilyn J. Schmidt, Esq.

Protecting the Finances of Your Loved One

There are a number of events that might give you concern about your loved one’s ability to manage his/her own finances. Perhaps she is donating money to charity or gifting things to family or friends that one cannot really afford to give away. Perhaps the bills are piling up, unpaid, or utilities are being shut off. Perhaps he tells you about an unsolicited phone call, that you immediately recognize as a scam, because he is now planning to send cash to the caller.

There are also a number of solutions to these problems. Your local elder protective agency probably has a money management program to help an Elder pay the bills and balance the checkbook. The Social Security Administration can appoint someone else as the representative payee for the monthly check, as long as it determines the appointment to be in the best interest of the client. Often, the loved one has appointed, or can appoint, someone to function as their agent, under a durable power of attorney instrument, to have authority to manage her finances. Of course, most of these steps involve the cooperation of the loved one.

So, if the loved one doesn’t cooperate with these steps, or if the Social Security check is not the only income/asset in play, you may need to think about pursuing conservatorship. A conservator can be appointed by the probate court if the individual has a disability that is preventing them from meeting their own basic financial needs. After the appointment, bank accounts and investment accounts are changed to read, for example, “Adam Adams, as conservator for Betty Boop.” The money is still owned by Betty Boop, but Adam Adams has a fiduciary duty to protect it and manage it on her behalf, and has to account for his financial transactions to the court. Betty is no longer able to access those accounts. And if she does enter into a financial contract, such as over-paying for a used car, the Conservator can nullify the contract.

Before the Court appoints someone as conservator over the assets of another individual, it will run a criminal records check to make sure that the candidate is an honest person. For example, a conviction for burglary would likely bar the appointment. The Court will also require the conservator to post a bond – a commitment by two friends or a contract by an insurance company to pay back a set amount (the value of the liquid estate) if the conservator is guilty of misfeasance (negligence) or malfeasance (theft). The Court will also require the conservator to file an inventory of the assets of the estate, and annual accounts showing the financial transactions that she has done.

Needless to say, the pursuit of conservatorship is more costly, in terms of filing fees, bond fees, and attorney’s fees, than the other mechanism. However the statute does allow for the costs of the proceeding to be borne by the estate of the protected individual. The conservator actually assumes no financial responsibility for these costs. Nor does he assume personal financial responsibility for the care of the protected person. He merely assumes the responsibility to make investments and expenditures in the best interest of the protected person.

December 10th, 2014 by Jenna N. Schmidt, Esq.

Guardian Care Plan/Report

In General:

Guardians of incapacitated persons (IPs) are required to file a Guardian Care Plan/Report 60 days after the permanent guardianship appointment, and every year on the anniversary of that appointment. The Guardian Care Plan/Report is used by the court to monitor the guardianship and to ensure that the guardian is playing his or her part in ensuring that the IP receives any necessary care or services. The Report is available at this link:

What if the Report is Not Filed in Time?

If the Report is not filed by the due date, the Court may issue an Order which requires the Guardian to appear in court on a specific date, unless the Report is filed beforehand. Failure to file the Report before the hearing and failure to appear at this hearing may affect the Guardian’s status as Guardian.

What Information is Required by the Report?

The Report asks a variety of basic questions, including where the person has resided during the reporting period, what medical or other services the IP receives and whether the guardian recommends any changes for the future care of the IP or the guardianship itself, among other things. There is no need to be overly detailed, but it is important to answer honestly.

Certificate of Service Requirement:

The last page of the Guardian Care/Plan Report has section entitled “Certificate of Service.” The court requires the guardian to verify that a copy of the Guardian Care Plan/Report must be hand delivered to the IP or sent by certified mail to the IP’s address. Thus, the Guardian is required to sign the “Certificate of Service” section to verify that he or she has served a copy of the Guardian Care Plan/Report to the IP by either of those two methods. If the Guardian believes it would not be in the IP’s best interest to receive a copy of this report, the Guardian must obtain court permission in order to avoid this requirement.

How to File:

Be sure to include the docket number of the guardianship at the top of the Guardian Care Plan/Report, so the court knows which court file it belongs to. This docket number can be found on the Guardianship Decree. Once the document is signed and dated, and the IP has been sent a copy of the Report by certified mail, or received a copy in-hand per the Certificate of Service, the Guardian must file the Report with the court. This can be done by simply mailing the original Report directly to the Probate court.

What Happens Next:

After you mail in your Report to the court, you may receive a document entitled “Notice/Order Regarding Guardian’s Care Plan Report.” This form is used by the court to indicate it has accepted the Report. However, this form is also used if the Guardian has failed to complete a portion of the Report, and is required to file an Amended Report. If the Notice/Order Regarding Guardian’s Care Plan Report indicates that an Amended Report is required, the court will require the Amended Report to be filed with the court by a certain date.


September 16th, 2014 by Marilyn J. Schmidt, Esq.

How and why to serve as a Guardian

If your friend or loved one is incapacitated to such an extent that she/he cannot make rational decisions about medical treatment, residence, or supportive services, you might be asked to serve as his/her court-appointed guardian. A guardian is basically a surrogate decision-maker about matters of the person for someone who is incapacitated (“the Respondent”); it is not a substitute decision-maker about the Respondent’s finances.

Guardianship is not financial responsibility.

A guardian does not assume financial responsibility for the Respondent. Any expenses related to the guardianship proceeding in court, or related to the ongoing lifestyle of the Respondent, should be paid out of the Respondent’s resources, whether by Respondent or his/her duly authorized surrogate. This might be a court-appointed conservator, social security administration-appointed “representative payee,” or an attorney-in-fact nominated in a durable power of attorney document that the Respondent signed at an earlier date.

Decisions in the respondent’s best interest.

The guardian’s duty is to make decisions that are in the best interest of the Respondent. To the extent possible, the Respondent should be given input; but his/her preference is only one factor for the guardian to consider when making a decision.

To be appointed as guardian, four things may be required of you:

1. Sign a bond

You need to sign a “bond” form that essentially confirms your willingness to accept the job. There is one bond for a temporary guardian who is being appointed to handle an immediate need of the Respondent that cannot wait until the end of the legal process. There is another bond for the permanent guardian who is being appointed to handle things on a long-term basis.

 2. Provide a CORI

You also need to provide the court’s probation office with a CORI (Criminal Record Information) form. This forms contains your name, your address, your date of birth, your social security number and the names of your parents. It enables the probation officer to look at any criminal record that you may have. If you happen to have a criminal record, then the judge will have to consider whether or not that record renders you unsuitable to serve as guardian.

3. Make a court appearance

Many judges will want to meet you to determine your suitability to serve as the guardian for the Respondent. In those cases, the attorney will ask you to attend court. In the event that it is not possible for you to attend court, you should at least provide a phone number where you can be reached during the hearing, so that the judge has the option of calling you and asking you a few questions. Typical questions are “How often do you visit with X?” and “Why are you the right person to be X’s guardian?”

 4. File a Guardian’s Plan/Report

The guardian is required to file an annual document with the court. It is a simple three-page form that needs to be completed, signed, filed with the court, and given to the Respondent. It keeps the court informed about how the Respondent is doing, whether or not guardianship is still appropriate, etc. If the judge has any questions, she/he may schedule a time for you to come to court and answer those questions, but this is a rare occurrence.

A guardian cannot do the following:

You cannot consent to long-term admission to a skilled nursing facility unless the court has specifically authorized that in the Decree of Guardianship. However, you can consent to an admission for less than 60 days, for the purposes of rehabilitation, if you and the physician sign and file with the court a form entitled “Notice of Intent to Admit.” If the Respondent has counsel, you need to give them a copy; if the Respondent doesn’t have counsel, the court will appoint one. This is a pretty straightforward procedure for the court to make sure that the guardian is not unnecessarily institutionalizing the Respondent.

You cannot consent to treatment with anti-psychotic medication unless the court has specifically authorized a treatment plan for it. Such orders are good for one year, get monitored by a court-appointed professional, and are renewed annually.

 Why serve as a guardian?

Generally, serving as guardian for family members or friends is not a difficult or complicated task. Most importantly, you will be ensuring your loved ones’ basic safety and health by consenting to adequate care, treatment and supervision at a time in their lives when they are no longer able to do that themselves.

August 21st, 2014 by Marilyn J. Schmidt, Esq.

Does Someone You Know Need Elder Protective Services?

What do you do when your mother keeps going for walks and getting lost, so that the police have to bring her home? What happens when your uncle, who is diagnosed with Alzheimer’s, is brought to the bank by his drug-addicted son to make large cash withdrawals? How can you help when you see your elderly neighbor driving around town with his car door open? How do you react when your father’s doctor calls to express concern that he keeps forgetting to take his cardiac medication?

Ensuring elder safety can be a challenge.

Most of us would offer to help by providing some care and supervision to our loved one, by securing adequate in-home services, by arranging for a move to assisted living, or, if necessary, by admitting him/her to a skilled nursing facility. However, what if the elder refuses this offer of help? Perhaps she/he is in denial that there is a problem. Or what if a family member stands in the way of the elder getting assistance? Maybe he wants the family’s money preserved for his inheritance rather than spent on services that ensure the elder’s safety.

Guardianships and conservatorships provide protection.

There are ways that your lawyer can attempt to resolve the situation by putting surrogate decision-makers in place. If the elder has the capacity to appoint a trusted friend or family member to manage things on his or her behalf, this can be done with simple paperwork, like a health care proxy, a durable power of attorney, or a trust. Where the elder lacks the capacity to manage his/her own affairs, this may involve the court appointment of a guardian over the person or a conservator over the assets. A guardian would have the authority to make most decisions concerning the elder’s residential placement, supportive services and medical treatment. A conservator would have the ability to manage the elder’s money, pay his/her bills, and protect his/her assets.

Massachusetts elder services agencies investigate abuse and neglect.

In addition, throughout the Commonwealth, there are non-profit agencies specifically authorized and funded by the government to investigate allegations of abuse or neglect involving people age sixty (60) or over. Abuse includes physical, emotional or financial abuse and neglect includes neglect by a caregiver or self-neglect by the elder, himself. Reports to these agencies are anonymous and confidential. If the investigator substantiates an allegation, the protective services agency will then attempt to remedy the situation. Where the situation cannot be resolved voluntarily, the protective services agency can file for a court order to protect the elder. Such a court order might be appointing a guardian of the person to make placement and medical decisions for him. It might be an order freezing the bank account temporarily and then appointing a conservator to manage his assets. Or, it might be an order directed at the person who is abusing the elder or interfering with his services.

Elder services in Western Massachusetts.

In Hampshire County, and the portions of Hampden County that are west of the Connecticut River, that agency is Highland Valley Elder Services, Inc. (586-2000). In the rest of Hampden County, it is Greater Springfield Senior Services, Inc. (781-8800). In Franklin County, it is Franklin County Home Care (773-5555).

August 6th, 2014 by Marilyn J. Schmidt, Esq.

When Estate Planning isn’t enough.

Okay. You and your spouse have done all the things advised by your lawyer: you have wills, health care proxies and durable power of attorney instruments. So there should be no problem handling your affairs should either of you become sick or incapacitated. Right? Well, not necessarily. Let me illustrate potential problems, and solutions, from some of our firm’s recent cases.

Empowering a health care proxy.

Mr. A is out jogging and gets hit by a car. He suffers a traumatic brain injury, symptoms of which include him flailing out at his care providers and refusing most offers of medical treatment. Although Mrs. A. is his designated health care proxy, she cannot consent to medical treatment and to rehabilitation services for him. This is because a health care proxy is only good for “voluntary” treatment!

Mr. A.’s situation can be remedied by a court order that affirms the health care proxy. In essence, the court rules that when he was competent to manage his own affairs, Mr. A. executed a valid health care proxy; that this proxy has never been revoked; and that Mr. A. is now unable to manage his affairs due to his traumatic brain injury. The resulting order empowers his proxy, Mrs. A., to consent to medical treatment on his behalf, even if he is saying “no.”

Providing safety and care through guardianship.

Mrs. B. has become been diagnosed with Alzheimer’s. Her family is worried that she is not getting adequate nutrition; that she may be dangerously mixing up her medications; and that she has a tendency to wander and get lost. No one wants to see her removed from her home and “placed” in a nursing home; they just want to be able to bring services, such as visiting nurses and personal care attendants, into her home to provide necessary supervision and assistance. She, however, does not see any problems and resists her family’s offers. Even a health care proxy can’t solve this problem because it’s not about consenting to medical treatment.

Mrs. B’s safety can be assured in the comfort of her own home if her loved ones file for guardianship. Before granting guardianship, the court requires clinical documentation that Mrs. B. has a clinical condition that undermines her ability to meet her own basic needs. The court would also have to find that the proposed guardian is suitable for the job; so where the proposed guardian is the person designated in Mrs. B’s health care proxy document or her durable power of attorney instrument, he would likely be appointed. The guardian would be required to submit to the court a plan of action, and annual reports on how Mrs. B. is doing.

Protecting financial security.

Mrs. C. and her late husband were very good savers. But as this widow has become increasingly lonely and, unfortunately, demented, she has been “befriended” by a neighbor. Family members have become suspicious of the neighbor’s intentions, because she is frequently seen taking Mrs. C. to the bank to make large cash withdrawals. Mrs. C. has no memory of these withdrawals or what the money was spent on, so the family suspects that the neighbor has been accepting “gifts.” Most recently, and most troubling, the “friend” has taken Mrs. C. to a new attorney to do some new estate planning. Her son happened to see some unsigned, draft documents from an attorney laying on the dining room table and naming the neighbor as Mrs. C’s new attorney-in-fact and her new heir. When he tried to discuss this with his mother, Mrs. C became confused and said that she had no memory of seeing an attorney and no intention of changing her estate planning documents.

Mrs. C’s financial security can be achieved, and her financial planning can be preserved, by the appointment of a conservator. As with guardianship, the court will require clinical documentation of Mrs. C’s condition and resulting incapacity. The Court would appoint a suitable person as the conservator to manage her affairs for her. If she named the son, originally, as her attorney-in-fact, then he would likely be appointed as conservator. He could then close the existing banking and investment accounts, and open new ones in his name “as conservator for” Mrs. C. Before granting him authority over Mrs. C’s money, the court would likely require a bond with sureties in an amount equal to the amount of the non-real-estate. This is most often an insurance policy with an annual charge. The conservator would be required to submit a conservatorship plan and an inventory of the assets and debts of the estate. He would also be required to submit annual accounts for the financial transactions that he conducts on behalf of Mrs. C.

Seek assistance with legal experience.

With all of these court proceedings, the costs and the legal fees should be borne by the estate of the elder, not by the well-intended family member or friend who seeks the court’s assistance. The assistance of an attorney is imperative, because the court process is always complex and the cases are sometimes contested. In fact, in each of the examples I described, time is of the essence in securing quick relief from the court. Therefore, it is best to find an attorney who specializes in these kinds of matters and who can get in front of a judge quickly.

May 29th, 2014 by Jenna N. Schmidt, Esq.

Guardianship – When is it Needed?

Generally, a guardianship of an adult allows a person (called the guardian) to make health care decisions and give informed consent on behalf of an incapacitated person (IP). This is because the IP has been deemed by a court to lack capacity to give informed consent on his or her own due to a clinically diagnosed condition, such as dementia or an intellectual disability. A guardian provides “substituted judgment” and gives informed consent on behalf of the IP. The guardian also makes decisions about residential placement and supporting services. A guardian may need to be appointed if the IP is refusing important medical care that is in his or her best interests. In addition, a guardian often needs to be appointed by a court if an IP is in the hospital and he or she does not have a Health Care Proxy (HCP) and important medical treatment or placement decisions need to be made before that person can be discharged. For example, if you suffer a traumatic brain injury, your medical decision-making power does not automatically go to your spouse or other loved one. If you do not have a HCP, you will need a guardian to be appointed to make your health care decisions, including placement in a rehabilitation center or skilled nursing facility. The guardianship process takes time and can delay discharge from the hospital.

What if I Have a Health Care Proxy (HCP?)?

As long as the IP agrees with the health care agent’s decisions, the agent can often consent to medical treatment without a court getting involved. However, if the IP disagrees with his or her health care agent’s decision, his or her refusal must be respected. However, a court can get involved in one of two ways:

1) Affirming the Health Care Proxy

Affirming a HCP requires a showing to the court that a valid HCP exists, that the incapacitated person lacks capacity to make his or her own health care decisions, and that the HCP should be affirmed. It may be affirmed even though, for example, the agent and the IP disagree with course of treatment or placement, such as placement in a skilled nursing facility. If the court affirms, the health care agent may assume the role and make decisions on behalf of the IP, even if the IP does not agree with those decisions. The underlying belief is that the person that the IP designated as his or her health care agent in the HCP will make decisions in his or her best interest and that the IP lacks capacity to make decisions on his or her own.

2) Guardianship

Even though an IP has a HCP, it may still be wise to get a guardianship. An affirmation of a HCP proxy is not widely understood by medical care providers, and thus, providers often refuse to treat an IP who seems resistant to treatment, even though it may be in his or her best interests.

April 4th, 2014 by Jenna N. Schmidt, Esq.

The Importance of a Will

What is a Will?

A Will is a document that has many roles; the most important of which is that it allows you to dispose of your “probate property” upon death in the manner of their choosing. A Will allows you to choose who gets which property and how they receive the property.  This may include specific personal property, such as jewelry or furniture, and/or bequests of money or a certain percentage share of your estate. A Will also allows you to leave a donation to a charitable institution, should you wish to do so.

Your Will may also nominate a guardian for your minor children and nominate the Personal Representative (also known as an Executor), who administers your estate.

What is “Probate property?”

“Probate property” may include real estate, automobiles, bank accounts and personal property such as furniture, among other assets Unlike probate property, “nonprobate property” is property which does not go through the probate process upon one’s death. Such property includes Trusts, “payable on death” bank accounts and retirement accounts which have already designated a particular beneficiary.  “Nonprobate property” is generally not controlled by a Will, and transfers outside of the probate process upon the decedent’s death.

What is the Role of a Personal Representative?

The Personal Representative is in charge of collecting the decedent’s assets, paying the bills and, eventually, distributing the property in accordance with the terms of the Will.  Depending on the way in which the Will is probated, the Personal Representative will probably have to file an Inventory and Accountings with the court in order to show the property was properly handled and disposed of. For this reason, many people choose to hire an attorney to help navigate the probate process.

Who Should I Nominate as my Personal Representative?

Most often, one’s spouse is nominated as the Personal Representative, with a child nominated as an Alternative Personal Representative if the spouse ceases or is unable or unwilling to serve. Or you may decide to nominate an attorney to serve as your Personal Representative. This is a particularly good idea if you want to avoid family disputes or if you have no one in your family to serve in this capacity. The Personal Representative can be monetarily compensated through your estate for a reasonable fee.

What Happens if I Pass Without A Will?

In Massachusetts, the laws of intestacy apply if you pass without a Will. The laws of intestacy are unlikely to meet your desires for the disposition of your property.

For example, if you pass away without a Will and either you or your spouse has children from outside of the relationship, your surviving spouse will receive the first $100,000 of your estate and one-half of the balance. The rest of the estate is shared between your children.

For many people, this may not be a satisfactory result. A Will, however, can be tailored to meet your wishes exactly regarding who gets which property, and how much. It also can provide for who will receive the property should a particular beneficiary predecease you.

When Should I See An Attorney to Discuss Estate Planning?

It is always a good idea to discuss your personal situation with an attorney to ensure your estate is going to be settled the way you intend. Even if you already have a Will, it is important to review it every five years due to changes in the law and in your personal situation. You should also review your Will with an attorney in the event that you get divorced, or your spouse passes away.

March 29th, 2014 by Marilyn J. Schmidt, Esq.

Introduction to the Trust

What is a Trust?

A trust is a legal instrument, which holds property for the benefit of beneficiaries and is controlled by the “trustee.” The trustee has a duty to manage the property for the beneficiaries and distributes income from the principal of the trust. The person who funds the trust (also known as the settlor) may choose to make a trust for a variety of reasons, some of which are listed below.

What is the Purpose of a Trust?

There are many potential reasons why an individual would want to use a trust to manage assets.

Protecting Loved Ones’ Financial Needs

One common type of trust is a trust set up by a parent or a grandparent to allow the assets to benefit a child or children until they reach a certain age (this age is commonly 22 or 25). By using a trust,

the child can be provided with income, but it prevents the child from accessing (and potentially wasting) the principal of the trust. The trust may or may not give the trustee discretion regarding how much can be distributed to the child(ren). Or the trust may specify under what circumstances income or principal can be distributed.

Another common type of trust is one set up for the benefit of a person with special needs. There are many federal or state benefits that have certain asset or income limits (such as MassHealth). By creating a Special Needs Trust or Pooled Disability Trust, it is possible to provide a beneficiary with financial support without jeopardizing eligibility for those benefits. However, there are restrictions on what those funds can be used for. Most importantly, the funds cannot be used for food or shelter. However, they can be used for “supplemental” needs, such as clothing, recreational expenses, certain medical expenses, or the cable bill, among other things.

Estate Planning

A trust can also be an important estate-planning tool to potentially minimize or even avoid estate taxes, should your estate be large enough. In Massachusetts, an estate worth one million dollars or more can be subject to estate tax. This amount includes real property, bank accounts and retirement accounts, among other assets. Or you may want to use a trust to provide for your spouse or children after your death.

Who Should Serve as Trustee?

Anyone can serve as trustee, including a family member, friend or an attorney; more than one person can serve as a trustee. A trust may provide for payment for the trustee’s services. The trustee has a fiduciary obligation to the beneficiaries of the trust, and must follow the instructions of the trust when distributing income or principal. Generally, a trust is not subject to court oversight. To protect the best interests of your beneficiaries, it is important to choose someone you trust.

February 26th, 2014 by Jenna N. Schmidt, Esq.

The Importance of Having a Durable Power of Attorney

What is a Durable Power of Attorney?

A Durable Power of Attorney is a simple instrument which allows a person you appoint to handle your financial affairs when you are unable to.  If you become incompetent, this person can use this legal document to access your bank accounts and pay your bills.

Why is it Important?

A Durable Power of Attorney is important because without one, no one will be able to handle your financial affairs unless they are appointed by a court as conservator. Petitioning for conservatorship is a costly and time-consuming process. A Durable Power of Attorney, on the other hand, is an inexpensive document.

What is the difference between a “Durable” Power of Attorney and a Power of Attorney?

A Durable Power of Attorney means that it remains effective after you become incapacitated.  A Power of Attorney is only effective until incapacity.  Therefore, it is important to have a Durable Power of Attorney in order to make sure someone will be able to handle your finances when you are incapacitated and cannot handle them yourself.

Who Should I Choose to Serve as my ‘Attorney’?

The person you appoint as your Attorney can be anyone of your choosing who is over 18 years old. Despite the name, your Attorney does not have be a lawyer or a professional. However, it should be someone you can completely trust with your finances. The Durable Power of Attorney is effective upon execution of the document, which means that person can immediately take the document to your bank and withdraw your money at any time, even if you have not yet been deemed incapacitated. The advantage of this, however, is that if you do become incapacitated, there are no other hoops to jump through in order for your Attorney to handle your finances. Most people choose their spouse as their primary Attorney, and their child as an alternate Attorney should the spouse become unable or unwilling to serve.

November 22nd, 2013 by Jenna N. Schmidt, Esq.

The Importance of Having a Health Care Proxy


What is a Health Care Proxy?

A Health Care Proxy (HCP) is a person (known as the “agent”) that you have designated to make health care decisions on your behalf when you are unable to make those decisions yourself. A HCP is appointed by a document of the same name. It is an inexpensive legal document that your agent will present to medical care providers in order to consent to medical treatment and care, such as surgery, rehabilitation services or nursing home placement.

When Would I Need a Health Care Proxy?

If you are deemed incompetent and therefore, you cannot give informed consent, medical care providers will require a HCP or a guardian to give that informed consent on your behalf. Incapacity can stem from a variety of medical issues and complications. It can be the result of a car accident, traumatic brain injury or coma; or can develop overtime as the result of increasing dementia or Alzheimer’s. No matter what your age, you should have a HCP.

Why is a HCP Important?

If you do not have a HCP and you have been deemed unable to make decisions on your own behalf, your medical providers will require that you have a guardian (appointed by a court) who is authorized to make those health care decisions on your behalf. This is an extremely expensive and time-consuming process. Not only does it cost thousands of dollars to have a guardian appointed as the result of legal fees, it can take weeks before a guardian is appointed. This can result in delays to receiving needed care. For example, it may delay needed surgery, or discharge from the hospital into a rehabilitation facility. Instead of receiving the care or rehabilitation you may need, you will be forced to wait for the court to process your case and appoint a guardian on your behalf. Since time is of the essence when it comes to medical care and rehab, it is imperative to have a HCP document executed before the time comes when you may need it. Once the HCP is executed, the agent has immediate authority to consent to medical treatment on your behalf, should you become incompetent. However, if you are already deemed incompetent, you cannot execute a HCP.

Who Should I Choose as My Health Care Proxy?

You should choose someone who you trust and who knows your medical wishes. Typically, a family member or friend is chosen. It is also important to consider who you would want to be the “alternate” agent, should the first person you choose becomes unwilling or unable to serve as your health care proxy.

What if I Disagree with my Health Care Proxy’s Decision?

A HCP is supposed to make decisions that you would have made if you had capacity. However, if you lack capacity and disagree with your health care proxy’s decisions, a guardian may need to be appointed in order to act in your best interests.

How Can I Make Sure My HCP Respects My Wishes?

It is important to have an honest and open discussion with your HCP regarding your wishes. You may also consider executing a Living Will. This is a legal document which states your wishes regarding your medical treatment if you become unable to express them yourself. In this document, you may, for example, choose to request that you are not resuscitated if you are terminally ill are in an irreversible coma. Or you may request the opposite measures are taken. A Living Will can help the HCP ensure that your wishes are respected.