What to Consider When Reducing Tax Impacts in Retirement

Looking towards your retirement, you need to think carefully about not just the expenses you might need to pay, but how taxes can impact that landscape. Taxes could reduce the size of your estate that you intend to leave behind for heirs, but they could also influence your overall financial picture.

Investment earnings can be hit hard in your older years when it comes to taxes. An important goal of proper investing is usually maximizing your after-tax returns. Different investments and different kinds of accounts can be taxed differently, which means it is important to consider how you are thinking about the overall growth of your portfolio and the potential tax implications.

Many retirees have established the accounts that are a combination of tax deferred, tax free and taxable. If all of these accounts were taxed the same, then the investor would have no preference into the order in which they would be drawn down.

Because these different kinds of accounts, however, are subject to different types of tax rules and rates, a proper withdrawal sequence is especially important. It is usually recommended, for example, that you withdraw from accounts where required minimum distributions, also known as RMDs, are required.

The second place to tap for distributions are cash flows from taxable accounts followed by tax deferred accounts and then tax free or Roth accounts.

For more information about how your retirement years can be impacted by other unexpected expenses, such as health care expenses, set aside time to speak with a dedicated estate planning lawyer so that you have a comprehensive strategy in place.

Talk to a NH estate planning lawyer today to connect your tax plans to your estate plan.

 

 

 

Two Ways to Protect Your Estate from Taxes

Tax planning is an important component of completing your estate plan and it should always be done under the guidance of an experienced professional. This is because there are many different details to consider in minimizing or avoiding taxes and you want to ensure that you have thought through all of the possibilities.

One of the easiest ways to minimize your tax burden is to put your assets inside a trust. A trust to deal with the assets allows those items to pass to beneficiaries after the creator’s death without having to go through probate. Trusts typically avoid state probate requirements and the expenses aligned with them.

In a revocable trust the grantor can take the assets out if necessary. In an irrevocable trust, however, these assets will be tied up until the grantor passes away. The important component of minimizing a tax burden is to ensure that the assets have been properly titled into the trust. This is the only way to add the additional layer of protection.

Many people default to putting their assets into joint names with a child by assuming this is the most appropriate way to pass on property quickly. However, this can actually increase the taxes that are paid by the child and is not recommended in most cases as an estate planning strategy.

If you need more help determining if trusts are the right tool to help you accomplish estate planning goals, write down your questions and set up a time to speak with a NH trusts lawyer to get more information.

Do You Know Where Your Digital Assets Will Go?

You are creating a digital footprint every time you post something on social media, share a photo gallery with your loved ones, look at your health records electronically or send an email.

But what happens to all of the assets or accounts associated with these actions after you pass away? Have you created a plan for how these will be deleted, preserved, or made inactive once you pass away? If not, you need a plan for your personal assets to be managed or removed. Your estate plan can help you do it.

This situation is compounded if you run a business or have a side hobby with a website, podcast or blog creating even more digital assets to keep track of. A digital estate plan is a crucial component of planning today, whether it’s handled through services that assign digital beneficiaries, documenting this in your will or compiling a list of all of your online accounts and passwords to be given to a trusted friend of family member.

Given the volume of online accounts that most people have today, you could be creating a mess for your executor who is not aware of all of these accounts or how to access or value them.

Saving materials stored in these online accounts could be important for your loved ones who want access to cherished family photos. Schedule a consultation with a trusted estate planning lawyer to discuss what belongs in your digital estate plan and how you can accomplish it effectively.

Our NH estate planning law firm is here to guide you when you need support around digital assets or the rest of your estate plan.

 

Can Anyone Serve as the Executor of a New Hampshire Estate?

One of the most important reasons to create a will, regardless of your age or perception of your personal wealth, is to name an executor. This is because this important role is a person who will carry out the administration of your estate after you pass away.

Their primary job is to protect any of the property that you owned until any taxes and debts have been paid and then transfer any remaining property to your heirs who are entitled to it per your wishes.

Every state has rules about who can and cannot serve as an executor of an estate. Bear in mind that just because someone does meet the statutory grounds to serve as an executor doesn’t mean they want to serve in this role or that they’ll be successful in doing so.

The basic requirements for serving as an executor in New Hampshire are that this person must be of sound mind, meaning that they have not been judged incapacitated by any court, per New Hampshire RSA 21:44,533:4. There is no statute prohibiting a person from naming an executor who has been convicted of a felony in New Hampshire.

The other requirement for an executor in New Hampshire is that the party be at least 18 years old. Potential executors can be rejected by the courts in New Hampshire when they have a conflict of interest or for any reason found to be unsuitable for serving in this role or lack the ability to make sound judgements.

Need help writing your own will or changing who is named as an executor in your current will? Our NH estate planning law firm can help.

 

 

What Are the Limitations with Living Trusts?

Living trusts are some of the most popular types of trusts used by a grantor or the person who creates them to accomplish estate planning goals. There are many different advantages associated with living trusts including privacy during situations in which the state demands an inventory of asset filing, easy succession of trustees, the elimination of delays associated with probate, end of life provisions as desired by the grantor and protection against incapacity of the beneficiaries or the grantors.

However, before deciding whether or not a living trust is right for you, you’ll want to discuss any concerns you have with your estate planning attorney in your area. Living trusts do have a few different limitations to be aware of, including the titling of property. Certain types of real estate property, for example, should be included from a trust depending on your location.

Creditor claims are important to consider since most living trusts do not provide protection from claims that are made by creditors since the grantor of the trust is considered to also be the owner of the trust assets, thereby keeping a close enough connection in ownership that a creditor could make a claim against assets inside it.

Finally, there are tax implications for living trusts such that all income earned by the trust is taxable to the grantor’s personal tax return as if the property had never been transferred to the trust. To learn more about some of the pros and cons of using living trusts or other tools, set up a time to speak with an estate planning lawyer.

 

How to Designate a Guardian in Your Will

A child is considered a minor until he or she reaches age 18, at which point they are considered an adult and are capable of making legal decisions on their own. In the event that you have a minor child under the age of 18, naming a guardian in your will is one way to ensure that your child is cared for by a person that you trust and someone who is capable of serving in this role in the event that something happens to you and the other parent prior to the child reaching adulthood.

Reviewing or determining your choices for guardian of your minor child is an important step in your estate planning process. A guardian is an individual to whom the official legal care of your child is transferred if both parents pass away.

Naming a guardian in your will is a crucial act and is not one that is meant to be only sentimental. You are making a legal decision about the party who will care for your child as if they were that child’s parent until your child is no longer a minor. Guardians perform all duties of a parent, including decisions about a child’s religious teachings, medical care, education and upbringing, so it is critical that you choose someone with whom the child ideally has some form of relationship and a person who you trust to care for your minor child in this way.

In the event that if the individual named in your will is not the child’s surviving parent, the wishes could be overwritten in court and custody may be offered to the remaining parent in the event that the judge feels it is the best circumstance for your child. Decisions relating to guardianship when it is contested in this type of manner could lead to additional challenges in court.

Courts are instructed to make decisions regarding minor children in the best interests of the child in which they will consider numerous factors in arriving at this decision. To ensure there’s a plan for your family, work with an estate planning attorney in New Hampshire.  

 

Reasons to Name a Guardian for Your Minor Children

In general, there are two parents who are able and willing to serve and care for their children and if one passes away, the other one by default take over physical custody in addition to responsibility for caring for the child. A minor guardian should be appointed in your estate planning documents to step into such an important role.

In many states across the US, the surviving parent can also be given the authority through a court to manage any property that the deceased parent left behind to the children.

The exception to this is when that deceased parent has left specific property management transfer plans inside a will. If both parents of the minor child pass away, however, and there is no ready fall back plan in the form of a will with an established guardian, the court is responsible for deciding who will be the guardian of the children.

The person that you name in your will is then appointed by the court to act as a surrogate parent for your minor children if the court agrees that your choice is in the best interests of the children and there are no surviving adoptive or biological parents currently able to properly care for the children.

When both parents craft their will, it’s a good idea to name the other person. Each of them should name the same person as a guardian for each child. This decreases the possibility of estate planning or probate related conflicts and can make things easier for your children during the sudden loss of their parents. Rely on the services of an experienced estate planning lawyer in NH to accomplish your goals.

 

Three Key People You’ll Need as Part of Your Estate Plan

The parties that you select to serve in important roles in your estate plan can make a big impact on making things easier for you or your loved ones in the event that the cornerstone estate planning documents need to be activated.

Three of the most important people you can select to serve as part of your estate plan include your durable power of attorney agent, your health care power of attorney agent and a guardian. If you’ve drafted a will, you’ve already named an executor or the person who will handle the administration of your estate after you pass away.

An important component of your estate, however, is including these three other parties who will take care of aspects while you are still alive. A durable power of attorney agent steps in to make financial decisions for you if you are permanently or temporarily unable to do so. Your healthcare power of attorney agent makes medical decisions on your behalf if you are permanently or temporarily unable to come to those decisions on your own. This might be the same person who serves in your durable power of attorney agent role.

Finally, you’ll need to name a guardian who will be responsible for your minor children. The guardian will raise your children and make key decisions about their activities and lives. Carefully consider the right person to potentially serve in each one of these roles and verify that the party you select is willing and able to serve in this role. These documents need to be drafted with the support of an experienced estate planning attorney in NH.

 

 

Three Key People You’ll Need as Part of Your Estate Plan

The parties that you select to serve in important roles in your estate plan can make a big impact on making things easier for you or your loved ones in the event that the cornerstone estate planning documents need to be activated.

Three of the most important people you can select to serve as part of your estate plan include your durable power of attorney agent, your health care power of attorney agent and a guardian. If you’ve drafted a will, you’ve already named an executor or the person who will handle the administration of your estate after you pass away.

An important component of your estate, however, is including these three other parties who will take care of aspects while you are still alive. A durable power of attorney agent steps in to make financial decisions for you if you are permanently or temporarily unable to do so. Your healthcare power of attorney agent makes medical decisions on your behalf if you are permanently or temporarily unable to come to those decisions on your own. This might be the same person who serves in your durable power of attorney agent role.

Finally, you’ll need to name a guardian who will be responsible for your minor children. The guardian will raise your children and make key decisions about their activities and lives. Carefully consider the right person to potentially serve in each one of these roles and verify that the party you select is willing and able to serve in this role. These documents need to be drafted with the support of an experienced estate planning attorney in NH.

 

What to Consider If You Are a Snowbird?

If you’re one of the people who spend the warm part of the year in New Hampshire or Maine but seek Florida during the winter, be sure you know how this could include some of your existing estate planning or elder law documents.

If you spend the good part of the winter in Florida, it’s important to think about how this could potentially impact your estate planning. Snowbirds often split their time between two places but need to anticipate the property values and need for estate planning documentation.

Spending part of the year south can complicate your estate plan and having an existing relationship with a trusted estate planning lawyer can decrease your chances of facing these traps. You need to make sure first of all that you have documents in place for both your primary residence state and Florida or secondary state.

The basic estate planning documents include a living will, a durable power of attorney and a health care proxy. You should have versions of these documents for both of your states. While your existing health care proxy, living will and durable power of attorney should be accepted in Florida, however, unnecessary headaches can emerge in the event that you have out of state documents due to differences in naming conventions or processes.

Make sure that you have a relationship with an estate planning lawyer who understands these complications and can help guide you through updating your materials and ensuring that you have the proper documents in place for both locations where you live.

We can help you with your NH or ME estate planning documents and help you consider some of the more involved issues in splitting your time between two or more states.