It's often said that the only certainties in life are death and taxes. But for many people, the two converge when it comes to estate planning, the legal process of drafting wills and trust. This week, the Supreme Judicial Court of Massachusetts is hearing several interesting oral arguments in cases that relate to estate planning. GBH legal analyst and Northeastern University law professor Daniel Medwed joined GBH’s Morning Edition to discuss. This transcript has been edited lightly.
Paris Alston: So first of all, I had no idea that apparently you did a little bit of tax and estate work early in your career. Is that right?
Daniel Medwed: That's right. To this day, my wife sometimes introduces me as a recovering tax lawyer. It happened to be my late father's area of practice. It really wasn't my cup of tea, but I really liked the idea of helping families, in particular, navigate the process and try to reduce their wishes to writing as they thought about what would happen after they passed.
Alston: I'll tell you a quick little story here. When I was maybe 10 or so, I wrote a will because — oh, I don't know why. I did not think that I was going to no longer exist at that point of my life. But I think I was like, "I'll give all my journals to my brothers," or something like that.
Medwed: Sweet.
Alston: But, you know, a lot of times people might think that estate planning is for really wealthy people. And that you have to have oodles of money and assets for the estate tax to apply to you. Is that true?
Medwed: Not exactly. On the one hand, yes, federal law does exclude a sizable portion of a person's assets from the federal estate tax. It's called the exemption amount. And in 2023, the exemption amount is — get this — $13 million. Basically, $12.92 million is excluded from the federal estate tax. But on the other hand, the size of the federal exemption is currently scheduled to dwindle considerably in the years ahead by about 50% toward the end of 2025. And regardless of your federal estate tax liability, most of us or many of us in Massachusetts will be subject to a very onerous state tax upon our death.
In Massachusetts, anyone with an estate in excess of $1,000,000 is subject to a graduated estate tax, ranging from a little less than 1% to 16%. So it can be a pretty big hit.
And regardless of one's assets, even if taxation isn't a concern upon your death, I think all of us have an interest in dispersing and allocating our prized possessions in a way that aligns with our values and desires. Our diaries, our journals.
Alston: As they have to go to the right person — you can't just give them to anybody.
Medwed: They have to be the right person, exactly. And so I think of estate planning as not just the province of the wealthy, but really as something for all of us. And we all should have access to it.
Alston: So Daniel, tell us what is happening at the SJC.
Medwed: The [case] that caught my eye first is a really interesting case that deals with an issue that crops up a lot in wills and trusts, which is what if the plain language in a will is less than clear? How do you interpret certain terms? So in this case, back in 2013, a 77-year-old woman executed her will and she bequeathed all of her assets to her 15-year-old cocker spaniel, Licorice.
Alston Oh, my goodness.
Medwed Yes — or to any other pets that she might own at the time of her death. And then upon the death of her last remaining pet — it's called a pet trust. And it's actually not so uncommon. Upon the death of the last surviving pet, the trustees were supposed to allocate the remaining assets to a charity. The problem was that Licorice predeceased the owner. Licorice died in 2017. The owner died in 2019. She died petless, but not penniless.
So the issue is what should happen with her assets and there was a little bit of a brouhaha amongst her four heirs, her four nieces and nephews. Basically, one of them thought the money should just go straight to a charity — that best accorded with her aunt's wishes. The other three thought that the money should pass through what are called the laws of intestacy, as if their aunt hadn't had a will. And it's become a big legal drama, essentially, about what should be done with this money.
Alston: Yeah, I mean, I'm not trying to be flip here either, but I imagine some of them may have been thinking, well, why did you send it to the pet first and not me? I don't know. Not my business. Well, what ended up happening there?
Medwed: Well, it's really interesting. So a trial judge looked at this and said, "Hey, this is true the will didn't contemplate this situation. If in fact the executor, the testator, the person who wrote the will, died without a pet." However, looking at the will as a whole, the judge thought its true intent here was for the charitable remainder, the remaining assets, to go to charity. Any money that wasn't used for a pet should go to a charity. And the judge cited a doctrine known a long-standing rule of legal construction, known as the acceleration of remainders doctrine, that basically says you can accelerate or advance a remaining interest in a trust in order to realize the ideal of the will.
That's a lot of legalese, but basically the idea is let's follow the spirit of this will rather than just its letter. And we're going to see how this plays out in the SJC.
Alston: I do want to ask for folks who are wondering about this: Is it best for them to go someone to help them draft their will? Not to write it in their journal, I take it?
Medwed: Probably, I wouldn't write in the journal. I think it would make sense to get some legal advice because you want to avoid litigation like this, right? You want to make sure that your intent is crystal clear.
