Articles Posted in Estate Planning

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There are so many beautiful areas throughout Essex County, Middlesex County and the North Shore.  Raising a family, owning a home or renting an apartment, working or working out; all of these activities can result in the need to sign legal documents, Deeds, Wills and the like.  Often a signature on a legal document will require an acknowledgment from a notary public.  So just what is a notary acknowledgment?

commerce-acts-books-477966-mAccording to Revised Executive Order No. 455 (04-04) Standards of Conduct for Notaries Public a “Notary public” or “notary” means any person commissioned to perform official acts pursuant to Article IV of the Articles of Amendment of the Massachusetts Constitution and a “Notarial act” and “notarization” shall mean any act that a notary public is empowered to perform under this executive order.  An “Acknowledgment” is a notarial act in which an individual, at a single time and place: (a) appears in person before the notary public and presents a document; (b) is identified by the notary public through satisfactory evidence of identity; and (c) indicates to the notary public that the signature on the document was voluntarily affixed by the individual for the purposes stated within the document and, if applicable, that the individual had authority to sign in a particular representative capacity.

The notary acknowledgment is the same whether it is on a deed to a home, a mortgage, a Will, or even an Affidavit.  The acknowledgment is used to prove that the person who signed the instrument was the person intended to sign the instrument, that the signature is genuine, that the signor understood what they were signing and did so of their own free will and voluntarily.  It is important that the notary acknowledgment be properly completed because if not, the instrument could be rendered ineffective.  For example, as found in a recent bankruptcy case in Massachusetts (see Massachusetts Lawyers Weekly, Mortgages—Acknowledgement—Voluntariness by Tom Egan), In Re: Reznikov, Fanni (Chapter 7 Case No. 14-10589-FJB; Adversary Proceeding No. 15-1003-FJB) the Chapter 7 trustee challenged the validity of a mortgage arising from a question on the sufficiency of the notary’s acknowledgment.  The Chapter 7 trustee sought to “avoid a mortgage held by James B. Nutter & Company” granted to James B. Nutter & Company by the bankruptcy debtor, Fanni Reznikov.  The trustee argued that the “mortgage was defective under Massachusetts law because it does not express that the debtor executed the mortgage voluntarily or as “her free act and deed”.   James B. Nutter & Company as the holder of the mortgage tried to refute the trustee and argued that because the Acknowledgement stated that the Debtor ‘duly acknowledged to [the Notary] that [she] executed the [Mortgage].’ that should be “sufficient to express that the Debtor indicated to the Notary that she executed the Mortgage voluntarily or as “her free act and deed”.  The Bankruptcy Court judge disagreed and ruled that the notary acknowledgement was “materially defective because it fails to represent that the Debtor indicated to the Notary that she executed the mortgage voluntarily or as her free act and deed”.  The mortgage was deemed not a valid lien.

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Will you have enough money to retire?   No matter where you live on the Northshore, in towns such as Lynnfield, Peabody, Danvers or Salem or perhaps further south in Boston or Cambridge, saving for retirement is critical. Employers are moving away from contributing to retirement plans or providing pensions, so considering personal finance is more important than ever. Women, who tend to outlive male spouses, should prepare for the future and how much they will need to live on. But, how much will a person need?

commerce-acts-books-477966-mMost financial analysts use the 4% rule to help individuals and couples estimate how much is needed to save for retirement.  Under this rule, you annually look at the total of your liquid assets (exclude your home) and then spend no more than 4% of that amount; and you should outlive your money.  Since returns on investment vary over time, you must rebalance and recalculate the 4% annually.  Following the 4% rule you would have “excellent odds of having enough money for 30 golden years.”  Note, some financial planners now suggest that the 4% rule may no longer work because we are in a period of extended lower return on investment and low interest rates. Also, since women tend to live longer than men, often living more than 30 years after retirement, the 4% rule may not work.

Many of the unique concerns that women deal with correlate with the fact that they usually live longer than men. According to Forbes women outlive men by three or four years on average. Couples often plan for their retirement together and may not consider what will happen to the other spouse if one dies.  Planning this way can cause financial problems for women because they live longer than men. Women have other unique concerns when planning for retirement. Women are more likely than men to plan for their retirement future and potential money problems; while men tend to wait for a problem to arise and then respond to it  So a joint plan may not serve a widow after her spouse is gone.

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Women have unique financial and estate planning issues to consider, as they age. The cities and towns of the North Shore, including Lynnfield, Saugus, Danvers and Wakefield, follow the MA statewide ratio of more women than men.  Also, women tend to marry older spouses and live longer than men, making them three times as likely as men to be widowed at age 65.  Here are some tips in that regard:

  1. Designate someone you trust to make medical decisions for you if you are incapacitated and assume your spouse is gone;
  2. Consider setting up a trust during your lifetime as it may be an important tool to protect your money, if you need long term care or to smoothly transfer assets after you are gone;