USA – MASSACHUSETTS Law and Practice Contributed by: Patricia M. Annino, Rimon, P.C.
benefits (Supplemental Security Income (SSI), Med - icaid and MassHealth). If the trust is a third-party trust established by someone other than the beneficiary, the income and principal are considered accessible to the beneficiary only to the extent the beneficiary has the right to require that the funds be distributed to them or for their benefit. If the trust is discretion - ary, the property is accessible only to the extent that the beneficiary has the right to compel the trustee to exercise discretion and distribute to the beneficiary. The intent of the settlor matters. For self-settled trusts, there are trusts that qualify as exempt under federal law. The trust must, however, provide that on the beneficiary’s death the govern - ment is reimbursed before the remaining assets may be paid to the remaindermen. 8.2 Appointment of a Guardian Under the Massachusetts Uniform Probate Code, guardians manage the custody and physical well- being of a minor or an incapacitated person. Conser - vators manage assets for the person under protec - tion. If a guardian or conservator is required, it must be court-appointed. For many who have planned having a valid health-care proxy (for medical issues) and financial durable power of attorney (for financial issues), this obviates the need for a guardian or con - servator. An adult person may nominate in their dura - ble power of attorney who should be appointed their guardian and/or conservator if that is needed, and the nominated person must be notified of any court pro - ceeding. If appointed, there are ongoing annual court reports that must be filed. There may also be addi - tional court requirements, such as the appointment of a guardian ad litem, the need for a guardian to submit and annually update a care plan, and the need for a conservator to file a financial plan. 8.3 Planning for Incapacity Power of Attorney Massachusetts recognises durable power of attor - ney to manage financial and legal affairs. It remains effective despite the principal’s later incapacity if it contains the statutory disability language. It may be immediately effective or drafted to become effec - tive only upon incapacity. As a practical matter most durable powers of attorney are drafted to be effective
immediately. In practice it should specifically address such matters as: • banking, investments and real estate; • tax returns and tax elections; • retirement benefits; • trust and estate planning transactions; • digital assets; • gifts (if appropriate, which should be carefully reviewed and not a standard clause); • access to records; and • hiring of advisers and caregivers. The durable power of attorney can nominate who would be appointed guardian or conservator should protective proceedings commence. This is an impor - tant clause that should be carefully reviewed because under current law, the nominated person has standing in the proceeding even if they are not an heir. Massachusetts has not adopted the Uniform Power of Attorney Act. In practice banks and financial institu - tions may scrutinise older or broadly worded instru - ments, or may require their own durable power of attorney form to be signed. Health Care Proxy A competent adult may appoint a health care agent by a written document signed by two adult witness - es. The agent’s authority begins when the principal lacks the authority to make health care decisions. There can be successor agents named. As a prac - tical matter each agent’s cell phone number should be on the form. The agent has the authority to make health care decisions the principal could have made, including decisions concerning life-sustaining treat - ment. The powers given to the agent can be limited in the document. A separate expression of wishes or living-will-type document is often used to guide the agent. Massachusetts does not have a statutorily authorised living will. Revocable Trusts A funded revocable trust permits the successor trus - tee to manage the trust assets if the settlor becomes incapacitated. It can provide more continuity and pri - vacy than reliance on a durable power of attorney, especially for family businesses.
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