Create a will: In Massachusetts, having a will allows you to specify how your assets will be distributed after your death. Without a will, the Massachusetts intestacy laws take over, which may cause things to happen that you don’t want to happen. A will allows you to designate guardians for minor children so their care is managed by someone you trust. In Massachusetts, a will must be in writing, signed and witnessed to be valid.
Establish a trust: A trust can help your estate avoid probate and reduce estate taxes. And with a revocable living trust, your assets can pass directly to your beneficiaries without the need for court intervention. This can save time and legal costs while keeping your financial affairs private.
Consider Massachusetts estate taxes: Massachusetts is one of the few states that imposes its own estate tax. Estates valued at over $2 million are subject to the Massachusetts estate tax at rates up to 16%, so it’s important to structure your estate in a way that minimizes this burden. Planning strategies like gifting assets during your lifetime or creating trusts can help reduce the taxable value of your estate.
Review your beneficiary designations: For life insurance policies, retirement accounts and certain bank accounts, beneficiary designations dictate who receives the funds upon your death. Keep these designations updated, as they can override any instructions in your will. Regularly review your designations, especially after major life events like marriage, divorce or the birth of a child.
Create a health care proxy and durable power of attorney: A health care proxy allows you to appoint someone to make medical decisions on your behalf if you become incapacitated. A durable power of attorney allows you to assign someone to handle financial matters.