Should You Ask an Attorney About Trusts?

Most people have the general understanding of the most basic of estate planning tools which is known as a will, but what about trusts? Trusts and wills can work independently of one another but can also work very well together. This is only possible when you have a knowledgeable estate planning lawyer to craft your trust or your will and help explain to you how this can impact your future.

A trust adds a layer of privacy and control that is not available with wills. This is why many people choose to also invest in the creation of a trust. Trusts come in many different forms but the two most important and frequently used versions are revocable and irrevocable trusts. A revocable trust is created for your benefit during your lifetime with the possibility of passing assets to loved ones after you pass away, at which point a successor trustee is named.

An irrevocable trust, you cannot make changes to or dissolve the trust once it has been created but provides more liability and creditor protection because the trust really owns the assets and a trustee manages them, not you. A trust can make an excellent supplement to your existing estate plan or could work independently of your will. To learn more about how this could work for you, schedule a consultation with an attorney.

 

Leaving Your House to Loved Ones? Be Careful of the Strategy

One of the biggest assets inside your estate is likely any real estate like your personal home. But if you are not careful with determining how to transfer this to the next generation, they could end up owing money. If a person who inherits a home doesn’t want to keep ownership of it and maintain it, they could face taxes, fees and transaction costs.

Certain states have estate tax exemption limits that are far below the federal level that could also impact your heirs directly. If your heirs are not residents of this state it is unlikely they will move there or understand the intricacies of these laws, meaning they might need to retain and experienced probate or real estate lawyer to help them.

If the value of the home exceeds any state tax exemption limits and there are no assets from the estate for those heirs to pay the taxes, the heir could be looking at a state estate tax bill with insufficient funds to pay for it. They might need to pursue individual financing options or have to sell the home directly as a result. If they do choose to sell the home, it will be taxed based on the value at the time of the original owner’s death.

As you can see there are many different components associated with this estate planning strategy and you want to make sure you have the support of a knowledgeable estate planning lawyer to help you with any of your individual plan so that you can make the most informed decision about what happens to any real estate property you own. For further information, set aside time to speak with a dedicated estate planning lawyer in your area.

 

 

Will I Automatically Inherit My Husband’s House?

With no New Hampshire estate plan in place, your family could be exposed to serious issues with housing. Depending on how the home is owned and deeded, it might become a thorny part of your NH probate.

Many people cannot afford to make estate planning mistakes that would jeopardize their ability to let their loved ones move on during this very difficult time. This is where the support and experience of a knowledgeable estate planning lawyer can be instrumental in protecting those interests. Naming someone on a deed is one possible way to transfer property to them but smart estate planning can make this process easier and minimize some of the problems.

Part of this will also depend on whether or not they have put together a will. A will allows you to name who will receive your property if something happens to you. With no will, even naming someone on the deed does not necessarily mean it will automatically transfer to them. If your home is “split” between your spouse and children and they don’t all agree as to what happens to it after you pass away, this can cause conflict, too.

If your spouse has surviving children from a previous marriage, this would mean that you may not be eligible to inherit the entire estate. Having a will that clearly stipulates who receives what and how can help you avoid these kinds of problems. Set aside a time to speak with an estate planning lawyer today if you own real property and would like to protect it or pass it on to a specific loved one.

If you need assistance with creating a NH estate plan addressing your needs, schedule a call with our office today.

 

 

Estate Planning: What Is a Step Up in Basis?

Passing on assets to your loved ones is a very common goal in estate planning. It involves many different assets that you could pass on outright to your loved ones through beneficiary designation forms, such as on a life insurance policy or retirement account or through strategies like trusts.

If you are passing on assets outside of retirement accounts, be aware that these could be impacted by a step up in basis. A step up in basis at a general level refers to an adjustment’s value reassessment based on inheritance. Imagine that something you purchase appreciates in value by the time you pass it on to your loved ones. If your loved ones then inherit that asset and sell it themselves, they would only pay the different between the selling price and the value of the item at the time it transferred to them.

The current step up basis is still in place, however, be aware of shifting changes in the national landscape. The current presidential administration, for example, has currently proposed plans to eliminate the step up in basis for any gains of $1 million or more. That would be increased to $2 million or more for married couples.

By having an established relationship with an experienced estate planning and asset protection planning lawyer in NH, you can increase your chances of being aware of these challenges before they occur and creating adaptable plans that align with your individual needs.

 

How Does a Power of Attorney Work in New Hampshire?

Do you have a plan for what happens if you’re incapacitated and not able to speak to your own decisions? If not, you should do this in a power of attorney plan.

A power of attorney allows the appointed agent to act on behalf of the principal or the creator. The creator of the document determines whether or not the power of attorney is specific or more general in nature. When the agent can show this document to other organizations, they are able to make decisions including choices about the principal’s real property and finances.

The laws in New Hampshire limit the ability of the agent to give gifts including the gifts that the agent might make themselves unless the power of attorney document crafted by the creator specifically awards that power. Furthermore, a durable power of attorney document also allows the agent to make financial decisions even after the principal becomes incapacitated, but the power of attorney document ends when the principal passes away.

If you are interested in creating a power of attorney document, it only becomes effective when signed by the principal or by another person in the principal’s presence and at the principal’s direction, and acknowledged by a notary public.  The agent is also required to sign the POA to acknowledge that they have been appointed as agent and understand their role.

Powers of attorney can grant significant and sweeping powers. The agent typically has access to the principal’s property and finances, meaning that you should select a person you trust to serve in this role. Schedule a consultation with an experienced estate planning attorney in NH today to learn more about your options.

 

Medicaid Planning: Will it Work For You?

Concerns about the cost of nursing homes are common questions brought up by many elder law clients in their first meeting with an attorney. It can be very difficult to make the decision to move a loved one or yourself to a long term care facility but you can’t do this without considering the possible financial consequences.

Misunderstandings or mistakes made around this financial process can expose you and your loved ones to unnecessary risks. Nursing home bills can cost anywhere from $8,000 to over $13,000 per month. Many people also end up staying in the nursing home for longer than they expect and for someone with a more progressive disease like dementia, it could be the rest of their life.

There are three primary ways to pay for long term care and the more you know about each of the options, the easier it will be for you to plan. You can pay out of pocket using your own savings, with long term care insurance or with Medicaid. Medicaid pre-planning is a legitimate and legal tactic that you can use with the help of an experienced elder law attorney. In New Hampshire, Medicaid can pay for long term care in a nursing home for as long as necessary once you have qualified but it is the qualification process that is often misunderstood. Pre-planning and crisis planning are two different components of the Medicaid process. 

Crisis planning refers to reaching out to an estate planning lawyer when you or a love one needs to go into a nursing home quickly. Pre-planning, however, looks at years long strategies that you can use to effectively plan in advance for the possibility of needing Medicaid. When done properly, pre-planning can give you confidence and peace of mind.

 

 

Most Important Terms to Know with Trust Distribution

There are several common phrases and words often referenced in a trust document to describe the purposes for discretionary distributions. These usually fall under the category of standard of living, emergencies, welfare, support and maintenance, education and health.

When the creator of the trust has included provisions for the trustee to make their own calls about what applies for trust distribution, it’s helpful for a trustee to get up to speed on the expenses generally included. When a trust is vague, this leaves more room for interpretation by the trustee. For example, “living expenses” could include many different kinds of costs and a beneficiary of a trust might be prepared to argue the same.

A trustee should always be familiar with the terms of the trust as well as these general situations that could apply for discretionary distributions.

Standard of living refers to the quality of life that the beneficiary lived immediately prior to the death of the creator of the trust; emergencies, as you might anticipate, have to do with unexpected occurrence; welfare relates to the comfort and wellbeing of a person physically; support and maintenance refer to normal living expenses like food, insurance premiums, medical care, housing and clothing, education refers to preschool, primary and secondary education and health refers to mental health care and hospitalization, medical supplies and devices, routine medical services, ancillary health care and even premiums for health insurance.

Reading through the terms of the trust and understanding the trustor’s purpose in creating this tool can give you a great window into what they intended for the purposes of the trust. If you still have further questions, schedule a consultation with an New Hampshire or Maine estate planning firm.  

 

Should You Establish a Trust in New Hampshire?

There are many estate planning tools out there and you must decide what’s going to work for your individual plans. The two most common tools are a will and a trust, which function individually as well as together. When you have not used these tools before, you’ll likely want the help of an experienced estate planning lawyer to give you further details about these so that you know what to expect and how to proceed.

While a will is the baseline of your estate plan, you might need more than this to provide further privacy and support for your needs. This can come in the form of a trust.

Whether or not you should create a trust in New Hampshire or migrate your trust to New Hampshire, is a question you should discuss directly with your estate planning lawyer. There are several different factors you’ll want to consider as you discuss your estate planning goals and the primary purposes for creating a trust. The most important factors to consider include:

  • Terms of the trust
  • The size of the trust given the possible benefits to be obtained from New Hampshire’s trust and tax laws which are relatively progressive
  • Whether the trust will accumulate the majority of its income balanced with income tax savings
  • The additional effort and expense in establishing or moving a New Hampshire trust

New Hampshire is a popular state for the establishment of trusts, particularly when you can work directly with an experienced lawyer to guide you through this process. Contact our New Hampshire estate law office today.

What Other Documents Might My Personal Representative Need?

When you pass away the will is the basic document in your estate plan that helps make things easy for this person but it’s not the only document that your executor might need. If you can be organized and work with an estate planning lawyer to discuss the specifics of your situation, you will make it that much easier for your executor to know where to look to find this important information.

Most executors will not know about the location of your primary filing documents and if these are located in multiple different places it will be even harder for them to identify it. A couple of things that you can do to help make your executor’s situation easier include gathering data, such as:

  • Birth dates of all minor children
  • Birth dates of any individuals whose inheritance is contingent on reaching a certain age
  • Names and addresses for any witnesses to the will
  • Copies of any trusts and amendments
  • Preliminary list of known debts
  • Preliminary list of non-probate assets
  • Preliminary list of probate assets
  • Copies of any contracts, leases or deeds
  • Three years of income tax returns
  • Any gift tax returns filed
  • The decedent’s home address
  • The decedent’s date of birth

You can make things much easier for your executor by doing this work in advance. There is plenty to think about when it comes to leaving a comprehensive plan behind for your loved ones or your estate administrator. Talk with our NH estate planning lawyers to learn more about your options.

 

Common Will and Trust Provisions for Fiduciaries

When you create your will or a trust, you’ll be able to appoint who you choose in the most important role of fiduciary. For a will, this would be your executor or personal representative. For a trust, it would be your trustee.

You can also discuss with your attorney the possibility of using specific terms within the respective document to give your agents additional authority.

One of the great things about creating your own will or drafting a trust with the help of an attorney or is that you decide what belongs in it. So long as the plan is compliant with state laws you are eligible to craft individual provisions. That being said, there are several provisions that appear in the most common trusts and wills, including the power to:

  • Sell or exchange property
  • Retain assets
  • Continue business ventures
  • Satisfy and settle claims
  • Pay assessments or taxes
  • Prosecute, negotiate or defend claims
  • Allocate items of income
  • Borrow funds with or without security
  • Sub divide, repair, lease, improve or manage real estate
  • Make distributions to beneficiaries in cash or in kind

The laws that govern trust and estate administration are designed to ensure that the responsibility of trust provided through fiduciary rules are not violated. Furthermore, your trust or will documents might limit or broaden the authority given to a fiduciary. You’ll want to speak to a knowledgeable estate planning attorney if you intend to enhance or diminish their potential authority levels.

Working with a lawyer to create your trust or will is strongly recommended; there are many things to think about in that process and having a lawyer’s help is vital for supporting you as you answer those key questions. Our NH estate planning law firm is here to help you.