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Why You Might Want to Create a Revocable Trust

In terms of avoiding probate, it is true that there are other methods you might consider, such as assigning assets to designated beneficiaries, or a simply establishing joint ownership. 

However, the advantage of a revocable trust for probate avoidance is that, when it is established and properly funded, it ensures a consistent estate plan. 

Too often, when people rely on designated beneficiaries and joint ownership, the result is a plan that is skewed unintentionally toward one or another beneficiary. The reason for this is that if you have multiple beneficiary designations, and you change one but forgot to change the others, you may create a different distribution than the one you had in mind. By contrast, with a revocable trust, the change can be made once (by means of an amendment to the trust) and this will affect all assets.

Other reasons for creating a revocable trust include:

• Minimizing estate taxes
• Keeping assets available for children until they reach adulthood 

Guardianship & Management for Beneficiaries Under Age 18

Questions about guardianship and management for those under the age of eighteen are quite common.

While your beneficiaries are minors — that is, under age 18 — the trustee can manage and invest the trust funds, free of the oftentimes considerable costs and restrictions that arise when a Probate court must appoint and supervise a guardian of the property until the beneficiary reaches the age of majority.

Furthermore, a guardianship terminates upon the beneficiary reaching age 18.

Obviously, all children do not mature at the same rate, and it is thus not always a good idea to have a young adult gain control of significant assets at that age. 

With a revocable living trust, management of a beneficiary’s assets can continue beyond the age of 18, free of Probate court involvement, to whatever age you specify. For example, you can easily dictate that at age 18 the trust beneficiary be given 25% of the assets, another 25% at age 22 and the remaining 50% at age 25, if that is your wish.

Trust v. Will?

People often ask about the difference between a will and a trust. 

There are numerous benefits to executing a revocable living trust as opposed to a last will and testament, in particular the following three:

1. Probate: Once property is transferred into a revocable living trust, it does not go through Probate
   
2. Privacy: Unlike a last will and testament, a revocable living trust is a private document, and is thus not published
   
3. Control and Simplification: In addition to a revocable living trust not complicating the management of your assets during your lifetime, it also simplifies the transfer of your estate to your beneficiaries upon your death 

"Pour Over" Wills?

Are you familiar with "Pour Over" wills?

If so, then you know that a “pour over” will is used in conjunction with a revocable living trust. This document is designed to “pour” anything of yours that was not placed into your revocable living trust during your lifetime into it after your death. You might think of it as a “safety net.”

Chances are, you’ll never need a "pour over" will, but if an unexpected need arises, it’s good to have.

Elder Law Questions Part 2

In a previous post we shared some of the most common questions about Elder Law. 

Here are three more important things that clients consistently ask about and that you might want to ask yourself when evaluating your and your family's position:

• Have I communicated my wishes to my loved ones regarding end of life decisions?
• Will I be able to take care of my own needs without help from other family members or government programs? If not, do I expect family members to help me as I age? What supports are available to help me live independent from my family?
• Do I have knowledge about the resources that are available to me to assist with my planning?

Can Probate Be Avoided?

People often ask about if and how probate can be avoided, and there are a number of different ways of holding assets that will avoid probate. 

The simplest is probably just joint ownership, such as a piece of real estate held as joint tenants or a bank account held jointly. This type of assets will pass automatically to the other joint owner when the first owner dies – but keep in mind, there will still be a probate at the second death. 

Another way to avoid probate is by assets which have 'designated beneficiaries', such as an insurance policy or a retirement plan (such as an IRA). These assets will pass to those beneficiaries when the owner of the asset dies.

Still another way to avoid probate is to hold assets in a revocable trust.

Questions About Elder Law?

As we age, for planning purposes, people often ask about the questions they should be asking themselves and their loved ones. 

Among the most common, which you might want to consider, are: t

• Do I want to make sure my spouse is taken care of?
• Do I want to stay in my own home?
• If I need help making decisions relating to my health care or finances, do I have the legal documents in place without the need for a guardianship?

Read more... 

Welcome Associate Attorney Tom Harlan!

We are happy to announce that Thomas R. Harlan has joined the firm as an Associate Attorney.

A lifelong resident of Manchester, Tom was Valedictorian of Central High School’s Class of 1988.  He went on to The University of New Hampshire, where he graduated summa cum laude in 1992 with a Bachelor of Arts in History.  

During his undergraduate career, Tom was inducted into the Phi Beta Kappa National Honor Society during his junior year, and subsequently obtained his Juris Doctor degree from U.N.H. Law (formerly Franklin Pierce Law Center) in 1997.

Tom has been a member of the New Hampshire Bar since 1997, and focuses his practice on estate planning.

A Case of Asset Protection

A recent client was still working at age seventy-five, but not necessarily by choice. His wife was suffering with Alzheimer’s disease, and had been living at a long-term care facility for seven years. 

During our conversation it became clear that the only reason he continued to work was to pay for his wife's care. He was exhausted, yet unsure about alternatives… 

He felt trapped... 

Like many people, he was confused about asset protection in a case where only one spouse was in need of long-term care. He had also been told about a five-year “look-back,” didn’t know whether his home and other assets were protected, and was worried about the fact that he had not done any planning. 

In fact, he confessed he wasn’t quite sure about how the look-back worked or how he could possibly maintain his wife's care if he were to stop working or, even worse, suddenly be unable to do so. 

The Good News... read the case study.

Is Your Trust "Bucket" Funded?

To avoid probate many families have their estate planning attorney create a trust, which is like a bucket a person or family carries through life. 

While carrying the “trust bucket” they can decide what they’d like to place into it, thus “funding” the trust. They can also decide who should carry the bucket for them should they become unable to do so, and also how the assets within the bucket should be distributed when they die.

If a trust is not funded when someone dies, then the probate court must decide how to distribute any assets involved and the family will incur the costs associated.

Read case study...

Helpful Legal Resource

One of the most highly trafficked legal web sites, FindLaw provides the most comprehensive set of legal resources on the Internet for:

• Lawyers
• Businesses
• Students
• Individuals

The website, findlaw.com, also contains news and legal updates, and can help people find a lawyer should they need to do so.

You can find links to additional resources like this on the "helpful links" page on our website. 

Summer Reading...

We recently read On Pluto: Inside the Mind of Alzheimer’s by Greg O’Brien and recommend the reading of this book to anyone who knows someone who is facing Alzheimer’s or any other cognitive disease.

The author, an investigative reporter, was diagnosed with early onset Alzheimer’s and speaks personally about living with the disease on a day-to-day basis. Although some of the legal aspects stated in the book seemed to be a bit inaccurate, I found that the author’s frank and insightful observations into what it is like to experience early onset Alzheimer’s to be invaluable to caretakers as well as to the medical profession.

While this book isn’t a “light” summer read, the narrative is very informal and can definitely be read on the beach.

New in NH Law

Real estate transfer taxes are no longer imposed for transfers into or out of revocable trusts where the ownership interests of the transferor and transferee are identical. (RSA 78-B:2 (XXII))

Apparently, however, the NH Department of Revenue Administration and the county registries have not been updated regarding this change. We will keep you informed and are hopeful that all applicable parties will soon be on the same page.

Do You Have a Child in College?

We know that the summer is a great time to spend at the beach, but did you know that it is also a great time for your college kids to execute powers of attorney while they are home.

Many parents are surprised to learn that when their children attain the age of 18, they can no longer gain access to their children’s health care information, or schedule doctor’s appointments on their behalf. 

In NH, an 18 year old is considered to be an adult and for that reason, in order to act on behalf of your now adult child, either medically or financially, your child needs to execute a financial power of attorney and health care power of attorney.

Reflections on Freedom from an Estate Planning Perspective

As we approach the 4th of July and are thinking about the celebration of the Declaration of Independence, we would also like to reflect briefly on freedom from an estate planning perspective.

• Freedom to choose who you want to act on your behalf when you no longer can, instead of the Court deciding who this person(s) will be.
• Freedom to allocate assets to whomever you want, instead of the State of New Hampshire deciding for you.
• Freedom to minimize taxes, instead of burdening beneficiaries who then face adverse tax implications.
• Freedom to protect loved ones and to make their lives easier and less costly in the event of a disability or of a death, rather than having them involved with the Court and other bureaucracies.

Be proactive and celebrate the freedom to plan for yourself and for those dearest to you. Wishing you a happy and safe 4th of July and a wonderful summer!

Common Misconceptions When Only One Spouse Needs Long-term Care

People are frequently unsure about asset protection issues, especially  in cases where only one spouse is in need of long-term care. 

In one case, our client had been told about a five-year “look-back,” and didn’t know whether his home and other assets were protected. He and his wife were also worried about the fact that he had not done any planning. 

Fortunately, and despite common misconceptions, there are times when it is possible to transfer assets between spouses, even though one of them is in a nursing home...

Read case study...

Elder Exploitation

Continuing with the topic of a new law relating to elder abuse that criminalizes elderly financial exploitation, which is not limited to an incapacitated person, here are some of the most common ways in which people exploit the elderly:

• Using a financial attorney as a license to steal.
   
• Treating joint accounts as your own even though you are only on the account for estate planning purposes.
   
• Using another person’s ATM card and/or checks for one’s own benefit.
   
• Threatening victim to get money.
   
• Refusing to obtain needed medical care for the elderly person so that assets will continue to be available for abuser.
   
• With respect to caregiver, keeping the change from errands, falsifying time sheets, spending time on the phone instead of doing what they are paid to do, etc.

New Elder Abuse Law

There is a new law relating to elder abuse that criminalizes elderly financial exploitation…this law is not limited to an incapacitated person.

• Makes it a crime for fiduciaries who knowingly, or recklessly for their own profit or advantage, deprive or take real or personal property of an elderly, disabled or impaired adult for the benefit of someone other than the adult.
   
• Makes it a crime for a person through the use of undue harassment, duress, force, compulsion or coercion acquires possession or control of an interest in real or personal property of an elderly, disabled or impaired adult, or establishes a relationship with a fiduciary obligation to an elderly, disabled or impaired adult that gives the person control or interest in real or personal property or other financial resources.
   
• Prior to this statutory change, unless the incident involved an obvious crime, like a forged check, the police often considered reports of financial exploitation to be family or civil matters allowing the perpetrators to continue the exploitation without fear of criminal liability, which as you can imagine was very frustrating.

Things You Should Know About Elder Abuse Law in NH

Did you know that you have a duty to report elder abuse?

Any person who suspects or believes that an incapacitated person may be the subject of exploitation is required under NH law to file a report with NH Bureau of Elderly and Adult Service (BEAS).  

However, the requirement to report extends to incapacitated adults only. Phone number for BEAS is 1-800-949-0470. The report to BEAS is confidential.

Additional facts:

• According to a 2011 MetLife study of elder financial abuse, as much as $2.9 billion per year is stolen from seniors.
   
• NH is the 4th oldest state in the U.S.
   
• Population of NH residents age 65+ is expected to double by 2025