What You Should Know About Testamentary Trusts

There are many different components to a comprehensive estate plan and one of these could be a testamentary trust. This legal document is usually drafted inside of your will and becomes effective at the time of your death as part of your estate planning strategy in NH.

Benefactors are able to exert some control over the distribution of how their assets are passed on to loved ones by using a testamentary trust. This is in fact one of the most common reasons to sit down with an estate planning attorney and craft a testamentary trust. If your goal is to provide for your children after your death, you could have the ability within your testamentary trust to design how those assets are paid out, such as at certain ages.

The testamentary trust will remove the property from your personal ownership and place it inside the trust for your heirs’ benefit. The trust comes into effect when a few different criteria have been met. First of all, the one who created the trust must have passed away, the will has gone through the probate process and the terms of the trust remain relevant, such as in cases in which the heirs named in the testamentary trust are still younger than the ages outlined in the document.

A testamentary trust is different from a living trust. This is because a living trust goes into effect during the grantor’s life. If you are not sure which type of trust is most beneficial for your unique situation, you will want to discuss this with a knowledgeable estate planning lawyer in New Hampshire.

 

Recognizing the Challenges of Undue Influence for Elders

Undue influence refers to taking unfair advantage over another person’s weakness of body or mind and using it to produce an unfair advantage over someone. This comes up most frequently in the context of estate planning in which you might argue that a loved one has been unduly influenced by an outside party.

Imagine that one of your loved ones is handicapped, requires in-home care, is elderly or is experiencing cognitive decline due to an issue like dementia. Developing a close relationship with a caretaker could mean that this person is suddenly included in your loved one’s estate plans. This can be especially shocking when you are familiar with your elderly loved one’s current estate planning documents like a will and discover that a newly executed document is produced by this caretaker shortly after your family member passes away.

You could challenge the validity of this document by claiming that your loved one was unduly influenced by the caretaker. In this case, however, you’ll need to move quickly and promptly to ensure you have necessary evidence to support such a claim. Undue influence must be proven by the person who is arguing that it has occurred.

Therefore, you’ll need to produce indications of the loved one being unfit to sign such a new document close to their death that would name this new caretaker as a primary or the sole recipient of your loved one’s assets and belongings.

For more information about how to prevent claims of undue influence, schedule a consultation with an estate planning attorney. Our NH estate planning lawyer can help you learn more about issues in estate planning and how best to protect the interests of an elder family member.

 

What Is a Trustee Fee?

A trustee is a person who serves in an important role in managing the assets and administration of a trust. This person is also entitled to receive compensation based on their efforts managing the assets and the responsibilities associated with the trust. Trustee fees are payments for services rendered whether the trustee is an organization or an individual. Various duties are associated with the responsibility of a trustee and these duties are clearly outlined in the trust document.

The primary purpose of the trustee is to ensure that the grantor or creator’s wishes are honored when it comes to the trust beneficiaries. This can include distributing assets or payments from the trust to its beneficiaries and handling tax filings for the trust. When creating your own trust, you would typically specify the terms of payment in the trust document itself.

There are a few different ways that you might approach the process of trustee fees, such as a set percentage of the assets in the trust each year or a flat dollar amount each year.

If there are not many duties associated with the administration of your trust, this could lead to a trustee fee arrangement of an hourly payment for the person’s time. You can also establish a limit on how much can be paid out in trustee fees. State laws will determine the fees in the event that you do not document them in your trust.

If you have not yet appointed a trustee or are curious about how to choose whether an individual or an entity should serve in this role? Our New Hampshire estate planning law office is here to support you with these questions and concerns.

Schedule a consultation today with a trusted estate planning lawyer to learn more.

 

 

Why You Can’t View Medicare As a Comprehensive Plan for Long Term Care

Medicare is often an important component of your overall health expenses and plan for your retirement years. However, it is a misconception to assume that it will help you when it comes to your long-term care expenses.

Given that long term care expenses, especially those associated with nursing home stays can be very expensive and

can dip into your savings significantly, it is important to sit down with an elder law planning attorney to walk through all of your options and ensure that you have a backup plan in place.

One of the costliest Medicare exclusions is long term care coverage. Medicare does cover certain expenses associated with a skilled nursing facility in very limited circumstances, such as when you are returning after a very long hospital stay and need support from a medical professional to recover. However, it does not pay for what is known as custodial care in a nursing home or at home.

If you need assistance from an outside person to help you with activities of daily living, such as using the bathroom, eating or getting dressed, you will be responsible for covering the costs. This long term care can be very expensive, particularly when it comes to using a home health aide. Many people prefer to stay in their own home and be comfortable, but this means that you might need to pay monthly costs of over $4,000 for this form of support.

You should discuss your elder law options and alternative planning arrangements with an attorney.

Since Medicare won’t pay most long term care expenses, you’ll need some other strategy for potential long term care costs. One option is Medicaid. Schedule a consultation with a trusted elder law attorney to walk through the different aspects of your elder law plan and get the support that you need from a dedicated and trusted estate attorney in NH.  

 

Yes, You Still Need a Financial Plan Even After a Pandemic

There is no doubt that the year 2020 has been unpredictable across the board, including financially. This makes many people hesitant to update their plans or to establish a new planning strategy altogether. However, a financial plan and an estate plan are some of the most important things you can work on even if you only develop a framework that needs to be amended later.

Despite all of the uncertainty around you, planning could be a good way to address any of the anxieties or nerves you have around the situation. This is a perfect opportunity to step back and reassess where you are right now. Do you already have some documents in place but they might be outdated? Perfect. That’s the first step, but you’ll likely need to make sure they still reflect what’s most important to you and what you currently own. That could require some outside support.

Now is the time to speak with an experienced estate planning attorney to revise those and ensure they are in line with your needs. Some of the initial questions might even prompt you to think about new ways to develop your financial plan.

Did someone take a salary cut, lose their job or is worried about losing their job as a result of the pandemic? Go back to revisiting your emergency fund and thinking about how much you contribute to your retirement.

If you haven’t reevaluated your budget recently, now is also a good time to re-strategize and reevaluate that. For more information about how you can be successful with your financial plan and your estate planning goals, schedule a consultation with a trusted estate planning lawyer today.

 

 

What Powers Can I Authorize Under a Durable Power of Attorney?

A durable and general power of attorney is an important document that should be at the cornerstone of your estate planning. A power of attorney is most effective in the event of incapacity, such as an illness or event that renders you unable to make decisions or take certain actions on your own. You can decide what works best for your situation and then discussing setting your POA up that way with your lawyer.

A durable general power of attorney authorizes a person to act in a wide range of business and legal matters, which will stay in effect even if you are incapacitated. You can decide that your general POA becomes effective only if you are incapacitated or it becomes effective immediately upon the signing of the document.

The person that you appoint as your attorney in fact or agent can handle many types of transactions on your behalf, including filing tax returns, selling and buying property, managing bank accounts and applying for government benefits. Without a general durable power of attorney in your estate planning document set, your family might need to go to court to request that you be declared incompetent so that a person can take care of your finances for you.

It’s important to recognize that a general durable power of attorney is not the same thing as a durable healthcare power of attorney. You’ll need to sit down with an estate planning lawyer to discuss some of the distinctions between various types of power of attorney documents and which of these are most appropriate for your individual situation.

Need help with your POA assignment in New Hampshire or Maine? Discuss your options by contacting our firm today.

 

 

What Does a Convenience Account Have to Do with a Power of Attorney?

If you are concerned about being able to keep up with your banking and your bill paying, using a durable power of attorney is an excellent way to appoint another person to make these decisions and take these actions on your behalf. In the process of setting up your planning, you might run across the term convenience account.

If you are older and concerned about keeping up with your financial affairs, it is natural to think about whether or not there is a family member or other person who could help you manage deposits, writing checks or getting cash out of the bank for you. This can backfire very badly if you do not accomplish the process of setting up a power of attorney in the right way.

Adding someone as a co-owner of your bank account, for example, empowers them to make all decisions as if it was their own bank account. This is different than setting up a power of attorney and can lead to problems like sibling conflict, creditor access, and misuse. The best way to give another person authority over your financial matters is to sign a document known as a durable power of attorney for finances.

Your attorney in fact would still be eligible to spend your money with regard to your bank account but there are two primary restrictions that add a layer of support for you. These are that the funds must be used only for your benefit and at the time that you pass away the money becomes part of your estate, meaning that it does not go to the person that you named as the attorney in fact.

Schedule a consultation with a trusted estate planning lawyer to discuss how a power of attorney document can be used for your best interests.  Our New Hampshire law office is here to support you with the creation of your power of attorney document so that you feel confident about your decisions.

 

 

Should My Financial Power of Attorney Agent Get Extra Authority?

Using a simple power of attorney form makes it seem as though it will be a seamless process to transfer financial authority to this person. However, you might not realize in filling out a simple online form or downloadable PDF that there are significant powers a DIY template like this does not include.

It’s important to educate yourself about these possibilities so that you can determine whether there are circumstances in which you need to give your agent extra authority. Basic power of attorney documents usually do not include the authority to:

  • Delegate the agent’s existing powers to another individual.
  • Update designations for beneficiaries on retirement or life insurance accounts.
  • Amend or create trusts on behalf of the principal in the power of attorney.
  • Create gifts from a property.

One of the reasons that simple forms don’t include these powers is because they can be very dangerous if given to the wrong individual. This could ruin your estate plan and eliminate this property if you don’t have any trusted POA agent. However, if you do trust your POA agent and want this person to have as many choices as possible for taking care of you, these powers can be essential. You’ll want to discuss the options with your estate planning attorney to determine whether or not you wish to allow for additional care and options.

Need more information about what this looks like in New Hampshire or Maine? Use us as a resource- schedule a call with our NH estate office today.

Preventing Challenges or Conflicts with Your Power of Attorney Document

Creating a financial power of attorney is one of the first and most important steps that you can take to protect yourself in the event that you become unable to make decisions or take actions with your finances.

However, you’ll want to ensure that your financial power of attorney is properly drafted and accepted. If you think that someone might end up going to court to challenge your durable power of attorney for finances or arguing that you were in fact coerced into signing it, there are several proactive steps you can take in drafting and signing the document to minimize these problems. First of all, if you previously created a financial power of attorney document by yourself, you might want a lawyer to review the document.

An experienced and knowledgeable estate planning lawyer can help you answer questions about the POA as well as any other estate planning documents you might have created. You might also be anticipating challenges to a trust or a will. A knowledgeable estate planning attorney can answer questions for all of these issues too.

A couple of key steps can minimize the opportunities for someone to challenge the validity of your financial power of attorney. While you may certainly hope that no one will end up arguing about the legality of this document, being proactive can help reduce expenses and delays with regard to your agent under the power of attorney taking the action you desire. Some actions you can take to minimize the risk of challenges to your financial power of attorney include:

  • Get a doctor’s statement saying that you appeared to be of sound mind at the time you signed the financial power of attorney.
  • Sign your document in front of witnesses and a Notary Public.
  • Make a videotape of the signing ceremony.

While we certainly hope you never need to fight back against a challenge to your financial power of attorney, it is a smart idea to take these proactive steps to avoid a challenge. Schedule a consultation today with an estate planning attorney in New Hampshire.

 

Woman signing paperwork naming an executor to her estate.

How to Make Things Easier for Your Executor

When you name someone as the executor of your estate, you are sending a message that you trust them significantly because this person is responsible for handling all of your affairs when you are no longer around. You are also passing on a lot of tasks and work for this executor because it is a very time-consuming process to wrap up an estate. Woman signing paperwork naming an executor to her estate.

Some of the steps that you take now can make things much easier for your executor and by association, your heirs. The first thing to do is update your trust beneficiary and will designations.

One of the best things you can do for your executor is to leave behind documents that truly reflect your wishes and are easily found after you pass away. Make sure that all beneficiary forms for your retirement accounts, life insurance policies and payable on death designations are fully updated. Be sure that if you’ve created a living trust that all of the relevant assets have been funded inside of it. An executor must also be able to find the documents that you have left behind.

There are legal and financial documents that almost everyone will have or need and these should be organized in one safe place. This can include vehicle titles, birth certificates, divorce decrees, marriage certificates, military discharge paperwork, property tax records, social security records, trust documents, brokerage statements, insurance policies and deeds to real estate.

Where possible, make the extra step to introduce your executor to your professional advisors, such as your life insurance company, brokerage company, bank, and home and auto insurance company. Ensure that some cash is accessible so that your executor can take action sooner rather than later.

Need more help with your estate plan? Set up a time to talk to our law firm about your estate planning program.