Estate Planning, Probate & Elder Law Attorneys

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» Estate Planning and Boston's Freedom Trail

Last week my family visited Boston for a little spring break R&R (is it really spring break when the temp barely breaks 50? better than snow, I suppose).

I'd never been to the city before, and we had a nice time visiting friends and seeing the sights along the Freedom Trail. Surprisingly, a couple of estate planning issues impacted the makeup of the city. The following quotes are from the nice walking guide entitled The Complete Guide to Boston's Freedom Trail, by Charles Bahne:

1. "The [Massachusetts] State House stands on land once owned by John Hancock.... Hancock was the first person to sign the Declaration of Independence.... Hancock's elegant mansion stood on what is now the west lawn of the State House. Hancock wished to give his home to the state, for use as a governor's mansion, but he died before he could sign his will. Year later, his heirs offered to sell the old house to the state, but the price was considered too high. Much to the dismay of all Bostonians, the Hancock mansion was demolished in 1863." (page 8) Ah, the irony of one of the world's most famous "signers" failing to sign his Will.

2. Faneuil Hall is "Boston's town meeting-hall [] where the colonists first dared to speak publicly against British rule.... The building was a gift to the town from Peter Faneuil, 'the topmost merchant in all the town'.... Peter Faneuil inherited his fortune from his uncle Andrew, a prosperous merchant whose ships called at ports around the Atlantic. But Andrew's bequest was subject to one unusual provision: like his uncle, Peter had to remain a bachelor. If he ever married, he would forfeit the money!" (pages 30-31) Peter Faneuil was known around Boston as "the jolly bachelor," which is also a name he gave one of his ships. These days, a "no marriage" provision would possibly be declared void as against public policy.

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» Wills with Testamentary Trusts

I usually talk about estate planning in terms of two different approaches:

Simple: having a simple Will, where you give away all of your property outright

vs.

More involved: having what's known as a pourover Will and a separate living trust. You give your property away in your living trust -- you leave it to a trustee, who holds it for one or more beneficiaries

But there's also a middle way, which involves having only a Will, but incorporating trusts into that Will. This is known as having a Will with a testamentary trust. What's the drawback to this approach, and why isn't it more popular?

Well, when I talk about the advantages of a living trust, I address 5 of them in particular:

1. Probate avoidance
2. Control
3. Creditor protection for beneficiaries
4. Privacy
5. Estate tax minimization

If you create trusts under your Will rather in a separate document, those trusts can't be funded during your life (since your Will has no effect until death). As a result, you will need a probate. Your beneficiaries also don't get privacy, since the trust information is all located in your Will, which is a public document. But the other three advantages still exist.