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 

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.

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.

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...

The Rest of the Story... To Fund or Not To Fund - Are You "All Set?"

As a follow-up to our "tongue-in-cheek" April Fool's Day post, here's an example of an estate planning attorney who drafted a trust, but didn’t assist with any of the funding. The client thought he and his family were "all set" because they had a trust. 

Unfortunately, an unexpected heart attack claimed the client's life, and as it turned out, everything was not "all set." There was nothing in his trust and all of his assets went through probate. His probate estate incurred $20,000.00+ in legal fees to go through the probate process. 

Without funding your trust with assets, your trust will not accomplish your goal of avoiding probate and of making it easier and less expensive for your loved ones and beneficiaries down the road.

To Fund or Not to Fund? (April Fools!)

Instead of telling you how to avoid probate, in honor of April Fools Day, we decided to provide you with a list of how to guarantee that your assets will go through the probate process when you pass away. 

• Own everything in your name only
• Fail to name beneficiaries on all of your accounts, no transfer on death designations either
• Don’t own anything jointly, and if you do own real estate jointly, have it owned as tenants in common (note that only sometimes does owning real estate as tenants in common make sense)
• Create a trust, but don’t put anything in it. We lawyers call it “the funding of your trust.” If you don’t put anything in your trust, there is nothing for your successor Trustee to distribute and then the assets go through probate. Your estate planning attorney should assist you with the funding of your trust.