Estate planning in New Hampshire involves the management, transference and distribution of your assets to avoid tax liabilities, probate and disputes upon your death or incapacity. Proper planning can provide for the financial support of your children and others, as well as expressing your wishes regarding life-prolonging measures if you become incapacitated.
Creating a will
A will is an expression of your intent on how you wish your property to be distributed on your passing, and it can be revoked or modified during your lifetime. If you die intestate, or without a will, the state of New Hampshire will appoint an administrator and distribute your assets according to the state’s succession law that. This distribution may not be as you intended, and it could potentially invite family disputes.
A will should include the following:
- Property distribution
- Provisions for children
- Funeral arrangements
- Organ donations
- Executor for the estate
Be sure to appoint an alternative executor in case the first-named individual is deceased, becomes incapacitate or declines to serve.
Probate is a legal process that determines the validity of a will, provides for an executor to administer the estate and distributes the estate’s assets to the heirs after seeing that all taxes, debts and creditor’s claims on the estate are paid.
Even with a will and other planning tools, probate may not be avoided completely, especially in large estates, but there are ways to dispose of assets during your lifetime to avoid probate:
- Living trusts—This is a tool to transfer assets and title into a trust and allows you to name yourself as trustee without relinquishing control of your assets. You also name a successor trustee to manage the estate on your incapacity or death.
- Joint ownership—Joint ownership of real or personal property with a right of survivorship allows title to automatically pass to the surviving joint owner on your death. Joint bank accounts are another example.
- Life estates—Life estates enable a person to possess and occupy land for the duration of someone else’s life. When that person dies, full title reverts to the original owner or someone designated to take title.
Other types of trusts may be formed according to your unique situation. Contact a legal estate attorney for any questions.
Special purpose trusts
A Totten Trust is an informal trust with a bank, credit union or brokerage firm known as a transfer-on-death account with a named beneficiary. A Spendthrift Trust does not allow the beneficiary control until the property is transferred out of the trust.
New Hampshire has a small estate exemption from formal probate for estates valued at $10,000 or less where the estate may be distributed by filing an affidavit. A summary administration is allowed for property valued up to $20,000. There are simplified procedures for a sole heir.
Financial power of attorney
This is a legal document that delegates the handling of your affairs. Only a durable power of attorney takes effect immediately and continues in full force and effect if you become incapacitated. It is revocable at any time if you are mentally capable and on your death.
Also known as a health care directive, this document sets forth your wishes regarding end-of-life health measures.
Power of attorney for health care
A health care power of attorney can appoint someone to make health care decisions for you.
Additional planning considerations
Most individuals should have some of the above plans for distributing their estates but there are other considerations:
- Estate taxes—Only very large estates valued at $5.25 million for 2013 are subject to federal estate taxes.
- Life insurance—Life insurance can provide a valuable financial cushion if your children, spouse or other dependents need support in the long term. If you have other sources of benefits like a pension, group life insurance or large IRA, it may be an unneeded expense.
- Business succession—Your business should have a prearranged method of distributing the business interests on your death or retirement like a buy-sell agreement or trust or a family limited partnership structure.
For other tax and succession concerns, you need the opinion of an estate planning attorney.
Consider an estate planning attorney
State and federal estate laws are always changing. Consider talking to a New Hampshire estate planning lawyer to ensure your assets and personal medical and financial affairs are properly managed.