Most families think of an estate plan as a will. In practice, a Massachusetts estate plan is a coordinated set of documents that cover several different situations: incapacity during life, medical decisions, financial management, disposition of assets at death, and privacy along the way. Each document has a distinct job, and the plan works best when each piece is in place, current, and consistent with the others.
The Core Documents
A typical Massachusetts estate plan includes three to four core documents, each with its own job.
Will. The will governs the disposition of assets that pass through probate at death. It names a Personal Representative (the person responsible for administering the probate estate), a guardian for minor children, and specifies how assets should be distributed. It has no effect during life. When a client uses a revocable trust as the primary dispositive document, the will is often a pour-over will. Its main function is to catch any assets that were not titled in the trust during life and send them to the trust at death. Those assets still pass through probate first, but the ultimate distribution follows the trust terms.
Revocable trust. Many families add revocable trusts to their estate plan, typically when they have probate assets, minor children, or assets above the Massachusetts estate tax exemption. The revocable trust holds assets that have been retitled into the trust during the grantor’s lifetime. At the grantor’s death (or incapacity), the successor trustee takes over and administers the trust according to its terms, usually without court involvement. The trust can also manage assets for the grantor’s benefit if the grantor becomes incapacitated.
Durable power of attorney. A durable power of attorney authorizes an agent to handle financial matters (pay bills, manage investments, sign documents, deal with real estate) on behalf of the principal. It is durable in the sense that it survives the principal’s incapacity. It ends at death.
Health care proxy with HIPAA Authorization. Under MGL c. 201D, a health care proxy appoints an agent to make medical decisions if the principal cannot make or communicate decisions. It takes effect only when a physician determines the principal lacks capacity, and it ends at death. HIPAA release language permits medical providers to share protected health information with designated individuals. Without it, privacy rules can block family members from getting information they need to help, especially before a health care proxy is formally invoked.
What Each Document Does Not Do
There is often confusion about what each document does and does not cover.
The will does not control joint accounts, accounts with beneficiary designations, or property titled in a trust. Those assets pass outside the will by operation of law.
The revocable trust does not automatically protect assets that were never retitled into it. A client with an executed revocable trust who never changes the title on the house, the brokerage accounts, or the bank accounts has a plan that will not do what it was designed to do.
The health care proxy does not authorize financial decisions. A financial power of attorney does not authorize medical decisions. Families sometimes assume a single “power of attorney” covers everything, but these documents and powers are separate.
The durable power of attorney generally terminates at the principal’s death. Under MGL c. 190B, section 5-504, acts taken by the agent in good faith without actual knowledge of the principal’s death can still bind the principal’s successors in interest, but once the agent knows of the death, the authority is gone. The Personal Representative (or successor trustee) takes over control of assets from that point.
How Incapacity and Death Sequence the Documents
Two distinct events trigger the plan: incapacity during life, and death. The documents sequence differently for each.
At incapacity. The agent under the power of attorney can handle financial matters. The health care proxy activates upon a physician’s determination of incapacity, and the agent handles medical decisions. The successor trustee of the revocable trust can begin managing trust assets if the trust terms allow for incapacity administration.
At death. Both the power of attorney and health care proxy end. The revocable trust’s successor trustee steps in fully and administers trust assets per the trust terms. The will is filed with the Probate and Family Court. If a Personal Representative is appointed, that person takes authority over probate assets. Beneficiary designations on retirement accounts and life insurance take effect immediately. Joint assets pass to the surviving owner by operation of law.
Funding the Trust So It Actually Works
The coordination step that families most often miss is funding the revocable trust. Funding means retitling assets from the individual’s name into the trust’s name and updating beneficiary designations to the trust where appropriate.
A reasonable funding checklist covers the primary residence (deeded to the trust), bank accounts (retitled or made payable on death to the trust), brokerage accounts (retitled or made payable on death to the trust), business interests (assigned to the trust), and beneficiary designations on life insurance and retirement accounts (reviewed and updated as appropriate).
Without funding, the rest of the plan still works, but the trust does not do its primary job of reducing probate exposure.
Planning Ahead
An estate plan is a system. The documents are designed to work together, each doing a specific job at a specific moment. At RackiLaw, every plan includes a written funding checklist. If you signed your documents many years ago and have not revisited them since, that review is a practical next step.