Should I Name a Trust as a Retirement Account Beneficiary?

When designating retirement account beneficiaries, it is important to think about your individual estate planning goals. There are disadvantages and advantages to naming a trust as a beneficiary of a retirement account. You can avoid probate, expenses and frustration when naming beneficiaries for qualified retirement plans as these assets pass outside of your probate estate.

Naming a trust as a beneficiary of your retirement plan is most helpful if your beneficiaries cannot be trusted with a significant amount of money, currently have a disability for which they receive government benefits or if those beneficiaries are minors. However, the major disadvantage of naming a trust as a beneficiary is that the assets inside the retirement plan are subject to required minimum distribution payouts based entirely on the oldest beneficiary’s life expectancy. This is not as important if you only have one beneficiary on the trust but if there are multiple heirs with various ages, this can cause significant problems.

Naming individual beneficiaries, however, will allow each of those beneficiaries to take a required minimum distribution based on their individual life expectancy. For more information about estate planning for your IRA and other retirement accounts, set aside a time to speak with an experienced estate planning lawyer in NH.

Learn more about how to create and use trusts within your estate plan by setting up an initial consultation with our law office. We’ll learn more about you, your family, and any other special interests like a business. We’ll use that information to create a comprehensive estate plan for you.


Is It Time for A Trust?

If you are concerned about passing on assets to your family members and their ability to manage this appropriately, a trust could be the perfect estate planning tool. For those young adults with money management issues or if you have minors who you want to eventually receive the assets, a trust can be a great way to name them as a beneficiary of a particular asset and protect the way in which it is passed on to them. A trust is a formal estate planning tool that should be drafted by an experienced estate planning lawyer.

A trust holds your assets on behalf of beneficiaries or a beneficiary and is a legal entity dictated by those documents made by the person who created it. If you go the right route to have this crafted by an estate planning attorney, those assets will go into the trust instead of directly to your heirs, which means they are only eligible to receive money based on the stipulations you have put inside the trust documents. The creation of a trust may vary in cost depending on the number of assets you wish to place inside and any other complexities.

You can determine which kind of trust would be appropriate as part of your Maine or New Hampshire estate planning or Maine estate planning after you sit down with a lawyer to discuss options.

Meeting with an estate planning lawyer can help you figure out whether a trust would complement your existing estate plan or whether another tool would be more appropriate. Having a consultation with a lawyer can get the ball rolling on these important conversations about planning ahead for your future.



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.


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.

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.



Should I Make My Trust Easy to Change?

Before sitting down to work with an estate planning attorney, you have an important choice to make: to make your trust easy to change or not. This is the primary distinction between a revocable and an irrevocable trust. Although the term trust accurately describes both of these, they accomplish different purposes based on the fact that you can update one but not the other.

There are many good reasons that you might want a trust to be able to update while you are still alive. Many expectations and assumptions that might have influenced the original terms of the trust, for example, can change as your children get older. But a settlor might not be comfortable with the idea of a trust becoming easily modified by beneficiaries after they have passed away. There are plenty of financial and tax reasons why the power to change your trusts may last several generations is advantageous. However, state trust laws have always allowed a beneficiary process for petitioning the court with jurisdiction to approve a modification if and when necessary.

Lately there has been a trend towards giving greater control to the trust beneficiaries and avoiding the use of state courts. Many creators of trusts today view this relationship as a financial strategy to reduce taxes and to provide for family governance. This approach values discretion and family control more so than fiduciary expertise. If you want the flexibility and control, think carefully about how to create a trust that would work for you and your loved ones. Sit down with a New Hampshire estate planning lawyer to learn more about when you should create a trust and what to consider as you draft one.



What Happens If I Need to Settle a Revocable Trust After the Trust Maker Has Passed Away?

Most people will not have had the experience of being named a successor trustee in charge of settling a person’s revocable living trust after a loved one passes away. There are many different steps involved in closing out this trust and all of these should be approached with care and with the possible support of an experienced probate lawyer.

The first step to settle a revocable living trust is to locate all of the important papers and estate planning documents owned by the creator of the trust. You will also need to look at their will in addition to trust documents, but you might also encounter things, such personal property memorandums or memorial instructions.

All of these documents should be kept in a safe place until they can be passed on to the attorney helping you with the administration of the trust. You might also find other things that will not be included in their probated estate, such as certain brokerage account statements or life insurance policies.

After you’ve looked at all of the important documents, read through the specific provisions of the individuals revocable living trust. Make note of the beneficiaries of any residuary trusts, personal effects or specific bequests and whether or not a person has been named to serve as successor trustee.

You’ll also want to make a list of how each asset is titled from the list of what the decedent owed and owned as well as any questions you may have for your estate planning attorney in NH.


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.

Does a Trust Take Care of Everything in My Estate Planning?

A trust is an important tool that makes a lot of sense in its various forms for the right person. However, it is a mistake to assume that an estate planning trust will accomplish each and every one of your estate planning goals.

Most sizeable estate planning strategies incorporate a revocable or an irrevocable trust in some format and it’s important to recognize what this process actually means for you as well as the asset.

When an asset is placed inside the control of an irrevocable trust, the ownership of the asset is handed over to the trust and the management of it is given to a trustee. The trustee must maintain a fiduciary responsibility to the beneficiaries of the trust which can create some forms of conflict for the trustee. This is most problematic if you put together a trust and hand over the role of trustee to a family member when other family members are beneficiaries.

This can put unnecessary strains on family relationships in the future and is often a good reason to use a third party like a professional or corporate fiduciary to play that role outside of your family and reduce the individual pressure.

Remember that a trust is only as good as it is aligned with your individual goals and has been properly funded. This is why the selection of the right kind of trust matters so much and why you should count on an attorney’s support as you navigate through that process.

For further information about the trust creation steps, meet with an estate planning attorney licensed in Maine and New Hampshire now.