Where there’s a Will, there’s a way…

Most of us know that we should have a will, but many of us do not really know how a will works. A will is the document that states your final wishes.  Generally, people use a will to leave instructions about what should happen to their property (assets) after they die.  However, you can use a will for much more. Such as, naming guardians for children, deciding how debts and taxes will be paid and providing for pets. In Massachusetts, wills are presented to the probate (yes, the dreaded probate) court in the county where the decedent lived.

Probate means proof.  Legally, this means proof that the decedent’s will is legally valid and enforceable. The probate court determines whether a will is valid.  It also oversees (with a formal probate) the distribution of assets to specified individuals and beneficiaries, the payment of death taxes, appraisals, and the payment of probate costs such as lawyers’ fees, court fees, personal representative fees, and administrative costs. If the decedent did not have a will or has property that is not accounted for in the will, the probate court will also ensure that property is distributed according to state intestacy laws.

Intestate is defined as a person who has died without having made a will. When this happens the Commonwealth has a law (as of 2012 the Massachusetts Uniform Probate Code or MUPC) that determines who gets your property. The results of an intestate succession will not always be what you would have wanted. Consequently, if you want your property distributed according to your wishes you NEED a will.

Everyone it seems wants to avoid probate. Hundreds if not thousands of articles have been written about how to avoid probate. I am not convinced that going through probate proceedings is as bad as you may have heard but the process is undeniably complicated and unless you have a very modest estate will likely require a lawyer to navigate. The probate process can also be lengthy. So, how do you avoid probate?

First, it is important to state that you cannot entirely avoid probate. In addition to validating a will, the Commonwealth requires that certain procedural steps be taken to protect the interests of creditors and heirs at law. In addition, it is important to recognize what property is included in your “probate estate”. That is, property that would require the probate court’s supervision/approval to be distributed.  Strictly speaking, a probate estate includes only property/assets that you own alone, in your own name.

Many valuable assets do not get included in your will, and so are not affected by either the probate or intestate succession laws.  These assets will pass to the surviving co-owner or to the beneficiary you named, whether or not you have a will.  Some examples are:

  • life insurance proceeds
  • funds in an IRA, 401(k), or other retirement account
  • securities held in a transfer-on-death account
  • payable-on-death bank accounts, or
  • property owned with someone else in joint tenancy or tenancy by the entirety.
  • property transferred to a living trust


As previously stated, there are practical reasons for developing an estate plan. A “simple” estate plan typically consists of:

  • a will;
  • a Health Care Proxy; and
  • a Durable Power of Attorney

For many of us, the simple estate plan is appropriate and properly drafted will safeguard our wishes before and after death.

What about a trust? We all have heard about using a trust to avoid probate. In my opinion, simply avoiding probate is not a sufficient reason for establishing a trust. Having said that, there are many good reasons for utilizing a trust in your estate plan. Several important reasons for establishing a trust are:

Privacy.  Wills and probate proceedings are a matter of public record. If you would like to keep your affairs private, and prefer that people do not know how your estate was distributed, avoiding probate through a trust or other mechanism is the only way to do so.

Flexibility. Trusts can be seen as a set of babysitter instructions. That is to say, a trust can be drafted with near limitless specificity and can be changed with less difficulty than a will.

Management. A trust can provide a vehicle for the management of assets during life and after death. You may reach a time in your life when you no longer wish to manage your assets. A trust provides a mechanism for enabling this to happen.

Control. Worried that a child or loved one may spend their inheritance unwisely, or worse, lose it to a creditor. A trust can be drafted so that the beneficiary receives a pre-determined amount at pre-determined times. In addition, you can draft a trust so that a beneficiary is prohibited from assigning anything to a creditor.

In another discussion, we will go into more detail regarding trusts.

In summary, a will serves as the cornerstone of any estate plan. Trusts offer features unavailable with wills. Many of our assets will transfer after death according to contract or property law.

Next week a detailed discussion of the “simple estate plan”.

If you have any questions or would like to discuss your estate plan needs please call Jeff at 508-945-3040 or email  jeff@p5legal.com .

Material presented on the P5 Legal blog and/or website is for informational use only. It is not intended nor should it be considered professional advice.

Data Security and Personally Identifiable Information (PII)

If your business collects and/or stores personally identifiable information (PII), MA data privacy laws apply to you. Massachusetts data security law is among the most comprehensive in the country. When discussing Massachusetts data privacy we are referring to M.G.L c 93H (breach notification and definitions); M.G.L. 93I (destruction of PII) and 201 CMR 17.00 (implementing regulations for the protection of PII).  Failure to comply with the law can be expensive. And yet, as with many other procedural laws (read regulations), we tend to think about the money we will spend to comply with the rules rather than the cost should something happen.

While the law is comprehensive, for small businesses running a couple of computers, compliance does not mean breaking the bank.  For example, when developing your WISP (discussed below) it could be that you implement a plan as simple as turning on Windows Update for operating system patches, making sure that your antivirus software is current and running and checking on a regular basis to make sure that any updates are applied. Also, making sure that files and email(s) containing PII stored on/sent from your computer(s) are encrypted. And, if you store documents on paper, making certain they are kept in a locked cabinet.

So what exactly is personally identifiable information?  If your company collects:

a Massachusetts resident’s first name or initial and last name and any one of the following:

  • Social Security number;
  • driver’s license number;
  • state – issued identification card (including state school student id) number; or
  • financial account number or credit card number – with or without any required security code, access code, personal identification number (PIN), or password that would permit access to the account. (NOTE: a financial account is broadly defined)

you are the owner and/or the custodian of personally identifiable information.

In addition to the obvious custodians of PII, for instance, businesses that process credit cards or checks, based on the above definition of PII, every employer of a Massachusetts resident has personal information of its employees.

The cornerstone for compliance with the law is your “Written Information Security Plan” or WISP.  Every business that handles PII must have a WISP. The regulations list over a dozen specific requirements that the WISP must include. Your written information security plan will lay out the who, what, when, where and how of your company procedure for protecting PII.

The regulations do not adopt a one size fits all approach.  Compliance will be determined by the size, scope, and type of business, the amount of resources available to the business, the amount of data stored, and the need for security and confidentiality of both consumer and employee information. 201 C.M.R. § 17.03

While the WISP is necessary to ensure compliance, it is not sufficient.   There are regulations explaining how to destroy PII, a requirement that any third party you work with has procedures in place to protect PII and a procedure for reporting in the event of a breach.

From the Commonwealth’s Office of Consumer Affairs and Business Regulation (OCABR) website:

Sample WISP:  http://www.mass.gov/ocabr/docs/idtheft/sec-plan-smallbiz-guide.pdf

Compliance checklist: http://www.mass.gov/ocabr/docs/idtheft/compliance-checklist.pdf

 Frequently Asked Questions: http://www.mass.gov/ocabr/docs/idtheft/201cmr17faqs.pdf

 For more information or to talk about other business related concerns, please email me at:  jeff@p5legal.com


Employee or Subcontractor?

Business is going well. You need help and are looking to hire someone.  You have heard that it is cheaper and easier to employ someone as a subcontractor instead of as an employee. With subcontractors there’s no employer’s share of withholding taxes to pay, no unemployment premiums, no workers compensation, nothing just pay a gross amount and at the end of the year give them a MISC 1099.  This arrangement seems perfect and will work unless you get caught.  Is it worth the risk?

How is the Government going to find out you might be wondering.…  While the odds of getting caught may not be great they are real and they are expensive.  Some examples of how you may get caught:

  • Someone you hired as a subcontractor gets hurt at work but does not have their own Workers Compensation Insurance.
  • Someone you hired as a subcontractor gets audited by the DOR.
  • Someone you hired as a subcontractor gets angry about something and calls any number of hotlines to report or worse goes to see a lawyer.

Massachusetts law presumes, with very few exceptions, for instance real estate agents, that workers are employees.  Under our independent contractor statute (M.G.L.A. c. 149 § 148B) a worker is considered to be an employee unless you the employer can prove:

  • that the worker is free from the company’s control and direction in connection with the performance of the service, both under his contract for the performance of service and in fact; and
  • that the service that the worker performs is outside the usual course of business of the employer; and
  • that the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.

You must prove all three elements or the person you classified as a subcontractor will be held to be an employee.  This will be costly.  If the Commonwealth determines that you have misclassified someone, the damages awarded will be equal to the value of wages and benefits that the worker would have received if an employee. This amount will be tripled and includes costs and attorney fees. What you paid to the individual as a subcontractor does not matter nor does it count in the damage award.

The amended law is relatively new, but surprise, the Courts have interpreted the statute very much in favor of classifying a worker an employee.

For more information or to talk about other business related concerns please email jeff@p5legal.com