NARFA and Thomas Brady & Associates continue to work together to help NARFA Members face the many issues associated with estate planning, business planning, and insurance review and placement. So today we bring you the second article in our ongoing Estate Planning Basics series. This series will address many questions and issues to help you protect your life’s work.

Estate Planning Basics: Everyone Needs to Have an Estate Plan, and Here’s Why

Estate planning is about much more than death and taxes. It is about the legacy you wish to leave for your family and about planning for the future success and protection of your family and loved ones.

If you have not yet done your estate plan, or if your existing estate plan is several years old, you should begin by ask yourself these questions:

  1. What would happen to your family if you didn’t wake up tomorrow?
  2. Who would manage your assets?
  3. Would your surviving family members be sufficiently provided for?
  4. What if your surviving spouse were to get remarried?
  5. Would you be satisfied having your property distributed by the laws of intestacy?

A properly designed estate plan will help you answer all those questions by creating “SPACE”:

Security, Predictability, Accountability, Control and Efficiency.


An estate plan protects your assets from the creditors of your beneficiaries (including a divorcing spouse) and also from the beneficiaries themselves (e.g., bad spending habits).  A properly drafted trust can allow for discretionary distributions to trust beneficiaries, instead of mandatory outright distributions, so that creditors will not be able to reach the trust assets.  This can be especially useful if a child gets divorced – assets held in trust are often excluded from the child’s marital estate for purposes of asset division.


An estate plan establishes the foundation for how your assets will be held and what the financial landscape will look like for your family after you have passed.  If you have been the primary “financial manager” in your family, your passing could create a very scary and unstable situation for your surviving spouse and children.  Working through those issues in advance will give you and your family the peace of mind that is needed to ensure their financial stability.


An estate plan nominates fiduciaries who will have obligations to both the settlor (you) and the beneficiaries of the estate and trust.  By nominating the appropriate fiduciaries you will ensure that your family is taken care on a personal and financial level.  These fiduciaries should be people whom you trust implicitly to do what is best for your family.


An estate plan gives you the ability to control how the beneficiaries have access to the funds in your trust to ensure the trust’s long term viability and provides protection for young children who need guidance and support.  You may have personal values that you have been trying to teach your children over the years.  Many of those values relate to money and education.  A properly drafted estate plan allows you to continue to teach those values by providing proper incentives to continue with education and to learn to handle money responsibly.


Proper estate planning can minimize exposure to transfer taxes (and address income tax strategies) to assure that your assets will benefit those you love and remain out of the hands of the government.  Depending on the size of your estate, you may or may not be subject to estate taxes.  The federal estate tax exemption is currently very high, at $5,340,000 per person (which means that you don’t owe any federal estate tax if your net worth is less than that amount).  The Massachusetts estate tax exemption, on the other hand, stands at only $1,000,000.  By anticipating these taxes and understanding their impact on your estate, you may be able to save thousands of dollars for your family.

© Copyright 2014 Thomas Brady & Associates, Boston, Massachusetts.  All rights reserved.  To ensure compliance with IRS requirements, we inform you that any federal tax advice contained in this communication (including any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (including any attachment).

NARFA is proud to endorse Thomas Brady & Associates. For more information on estate planning specifics and estate planning basics, please visit NARFA's Estate & Business Planning Services page or contact us. We're always here to answer your questions and help you navigate life's most complicated situations!

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