THE REVERE ADVOCATE – FRIDAY, DECEMBER 17, 2021 ELECTION | FROM Page 1 Page 19 PRINCIPAL RESIDENCE PROBATE, MASSHEALTH AND CAPITAL GAINS TAX CONSIDERATIONS I f you transfer your home to an irrevocable trust in order to protect the home from the possibility of going into a nursing home, there are several benefi ts of doing so. First and foremost, once your home is transferred to an irrevocable trust, the fi veyear look back period commences in order to protect the home in the event of one or both of the Donor’s of the trust enters a nursing home and needs to apply for MassHealth benefi ts. Another benefi t of an irrevocable trust is the avoidance of probate upon the death of the Donor(s) of the trust. Certainly, if a husband and wife own the home as tenants by the entirety, probate would be avoided upon the fi rst spouse to die. If the surviving spouse does not take action to place the home either into a revocable trust or irrevocable trust, upon the death of the surviving spouse, the children would have to initiate probate proceedings in order to obtain title to the home. A simultaneous death, although very unlikely, would also result in the children having to probate the estates of both spouses. Having a funded irrevocable trust would obviously avoid the negative ramifi cations of that unlikely event. When you place your home into an irrevocable trust, you also obtain the benefi t of being able to sell your home and take advantage of the Internal Revenue Code Section 121 capital gains tax exclusion on the sale of your principal residence. The trust will be drafted as a grantor-type trust for not only income tax purposes but for capital gains tax purposes. For a husband and wife, this means the fi rst $500,000 of capital gain is exempt from taxation. For a single person, the first $250,000 of D’Ambrosio tallied 3,172 votes to 960 for Edwards. During the campaign to replace Boncore, who left offi ce to take a position as the CEO of the Massachusetts Biotechnology Council, D’Ambrosio had heavy hometown support. He racked up endorsements from a host of city councillors and mayors past and present, as well as from his Proud Mother Bridgett Edwards fl ew in from North Carolina with supporter Elaine Donovan. (Advocate photos by Tara Vocino) capital gain is exempt from taxation. The home must be your principal residence for at least two of the fi ve-year period immediately preceding the date of sale. What is becoming more of a concern with deeding the home outright to the children reserving a life estate in the home by the parents is the greater likelihood of a child dying prior to the parents. With life expectancy so long with medical technology, it is not uncommon for one of the parents to reach the age of 90, 95 or even 100. Consequently, may have a situation where a child dies of some cause age 65 or 70. These situations unfortunately do occur. In the deed with a life estate plan, since the home was deeded directly to the children, the child who has now died has an estate that needs to be probated. If, however, the home was placed into an irrevocable trust, the predeceased child’s trust share would be held in further trust for his or her children. If that child had no children, his or her share would be distributed to the surviving siblings. This dispositive scheme would be pursuant to the terms of the trust, not the Last Will and Testament. There would be no involvement by the probate court. This would result in signifi cantly less legal fees, time and complexity when compared to the probate process. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. Pictured from left to right: Winthrop Town Council President Phil Boncore, Revere Democratic Committee Chairman Juan Jaramillo, Aaron Mitchelwitz, Senator Elect Lydia Edwards, Rep. Adrian Madaro and outgoing Senator Joseph Boncore during Edwards’ victory party at Spinelli’s in East Boston late Tuesday night. Revere residents Nicole Silvestri, Edwards and Joseph Ravesi. Your Hometown News Delivered! Anthony D’Ambrosio thanks voters for their support, and said Edwards is one of the smartest people whom he knows. fellow School Committee members. However, D’Ambrosio was unable to break through in the precincts of the district in Boston and Cambridge. In Boston, Edwards outpaced D’Ambrosio 4,740 to 1,356. In Cambridge, Edwards outpaced D’Ambrosio 1,289 to 63. In Winthrop, where D’Ambrosio had the support of recently elected State Representative Jeff Turco, Edwards fi nished ahead of D’Ambrosio by a count of 1,189 to 873. Edwards ran unsuccessfully for the First Suff olk/Middlesex senate seat in 2016 before winning election for the District One City Council Seat, which includes Charlestown, East Boston and the North End. Edwards was endorsed by a number of heavy hitters in statewide politics, including Senators Ed Markey and Elizabeth Warren as well as Boston Mayor Michelle Wu. EVERETT ADVOCATE MALDEN ADVOCATE REVERE ADVOCATE SAUGUS ADVOCATE One year subscription to The Advocate of your choice: $100 per paper in-town per year or $120 per paper out-of-town per year. Name_________________________________________ Address_______________________________________ City_______________ State_______ Zip ____________ CC# _______________________________ Exp. _____ Sec. code____ Advocate (City):___________________ Clip & Mail Coupon with Credit Card, Check or Money Order to: Advocate Newspapers Inc. PO Box 490407, Everett, MA 02149
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