Massachusetts Estate Planning FAQs

Answers to Frequently Asked Questions about Estate Planning in Massachusetts.

1. What is a Durable Power of Attorney?

   A durable power of attorney (DPOA) is a written document, authorized by M.G.L. c. 201B, whereby a person (the "principal") designates another individual as his or her attorney-in-fact ( the "agent") and contains words evidencing the principal's intent that the powers granted under the document remain in effect notwithstanding the principal's subsequent disability or incapacity. The DPOA allows the agent to manage the principal's property on the principal's behalf, including, but not limited to, signing checks, entering into contracts, buying and selling real and personal property, depositing and withdrawing funds, running the principal's business, and most other actions a principal could take on his or her own behalf.

2. Do I need a Will?

   In one word: Yes. Everyone should execute a Will in order to provide for the orderly administration of their estate, the proper passing of their property, the appropriate accommodation and care for their minor or disabled children and many additional reasons. It is especially important to execute a Will if you have minor children, you have substantial assets, you, or your spouse, are in a second marriage, you or your spouse have children with a previous partner, you have children, or family member(s) with special needs, or you have specific desires for the distribution of your property.

3. Do I need a Trust?

   It depends. A revocable trust is an effective means to allow for your property to pass outside of the probate court, to provide for a prolonged, and specific, administration of assets for your designated beneficiaries when necessary (such as with young and/or disabled beneficiaries), to lawfully avoid estate taxes up to a set threshold, and to provide for a more private administration and distribution of your property that is outside of direct probate court oversight and is not a public record. In addition, a revocable trust is amendable and revocable during a donor's life, and therefore can be changed or terminated as a donor's situation changes.

4. What is a Health Care Proxy?

   A health care proxy is a written document, authorized by M.G.L. c. 201D, whereby a person (the "principal") provides another individual (the "agent") with the authority to make health-care decisions on his or her behalf in the event the principal lacks the capacity to make, or communicate, such decisions on his or her own. By statute, the agent is given a broad mandate to act on the principal's behalf in making health-care decisions provided that the principal is incapacitated, except that such authority is limited by any limitations expressed, orally or in writing, by the principal and that the agent is required to honor any express wishes of the principal.

5. What is a Declaration of Homestead?

   In Massachusetts, a homeowner receives an automatic homestead in his or her primary residence in an amount of $125,000.00. In addition, a homeowner can execute and record a written Declaration of Homestead, which provides a total of $500,000.00 of protection in his or her primary residence. The Declaration of Homestead protects the homeowner's primary residence, up to the relevant amount, from many debts and liabilities incurred by the homeowner, though there are certain important exceptions, including purchase money mortgages.