Month: October 2020

Nashua client has questions about what happens to her revocable trust and creditors after she dies?

Revocable trusts are common estate planning tools in New Hampshire. The trust is established by someone known as a “grantor” (i.e. the person who transfers assets into the trust) and in most instances is also a beneficiary of the trust. When the grantor dies, the trust does not automatically terminate. There are steps that need to be followed in order to close out a trust after the grantor dies. Once all of the closing steps have been completed the trust can be closed out.  During the administration of the trust the trust still operates. 

The main benefit of a revocable trust is that after the grantor’s death the trust does not have to go through the probate process.  After death, a formerly revocable trust becomes irrevocable and the assets of the trust are distributed in accordance with the grantor’s directions. After the debts and obligations of the estate are settled, the assets are distributed to the beneficiaries. However, in order to do this, there are steps that must be taken.  A New Hampshire estate planning attorney can help you with these steps.

Successor Trustee

The duty to fulfill the terms of the trust (trust “administration” for short) are assumed by the successor trustee after the grantor’s death. This trustee has to deal with the beneficiaries and has obligations to them. The successor trustee will also have to deal with any creditors of the grantor and coordinate the preparation of any tax returns that are due.

Notifying the Creditors

Death does not make the deceased Grantor’s debt obligations disappear.  Creditors will expect to be paid back from the trust assets. Accordingly, creditors can be notified that the trust has become irrevocable and that the trustee is now responsible for the trust and intends to close it. Whether notice to creditors is required is also a matter of state law.  Many states, such as New Hampshire, have enacted laws which do provide some guidance on creditor notice provisions in the revocable trust context.  For example, a trustee may be required to publish notice of death in a newspaper or some other publication. A prudent trustee should consult with their estate planning attorney about the various creditor notice provisions and whether a creditor claim is time barred before making final trust distributions to the trust’s beneficiaries. Creditors generally have a limited period of time to file claims. However, if the creditors do have notice, in most states it will give them a shorter period in which to file a claim than they would otherwise have.

Settling and Negotiating Debts

The deceased may have owed money. As mentioned above, the creditors are able to access the trust’s assets for repayment. It is important to know that not all debts must be paid. Some debts do go away when the grantor dies. For example, student loan debts do not survive the death of the grantor. Other loans, such as credit card debt do continue to exist. The debts must be paid before the trust property is distributed to the beneficiaries. If not, both the trustee and the beneficiaries may be sued by the creditor for repayment of the debt. The trustee can either use liquid assets of the trust such as bank accounts to pay the debt or sell assets to raise funds. The beneficiaries may receive money or property usually only after all of the creditors have been paid. Another of these obligations and debts is income taxes, which must be paid out of the deceased’s assets. Some states have laws that require that estate taxes be paid before the beneficiaries can receive assets. The trustee must be careful about distributing assets before debts have been settled in order to avoid becoming personally liable.

Distributing

The first things that must be done before distributing the assets is valuing them in order to know how to do the distribution. After the bills, expenses and creditors have been paid, the pool of assets with be known. Then, the trustee must follow the directions of the grantor in either selling or deciding what to do with the assets. After all property that must be sold is sold, there will be the group of assets that needs to be distributed. To the extent that the assets are liquid, checks will be issued to the beneficiaries. If the property is not sold, then it will be retitled to reflect the new ownership by the beneficiaries. Note that the trustee may be liable for any future expenses if new expenses arise after the assets of the trust are distributed so this final step may take some time.

If you’re interested in talking with the attorneys at Welts, White & Fontaine PC about estate planning, including wills and trusts, trust administration and probate matters please contact us by clicking here or by calling (603) 883-0797. Welts, White & Fontaine is one of Nashua’s largest, multi-practice law firms and serves the legal needs of both individuals and businesses in towns such as Amherst, Milford, Hudson, Brookline, Windham, Hollis, Merrimack, Litchfield, Bedford, Londonderry, Pelham, and, of course, Nashua.

Author: John Polgrean

This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion.

Negligent Signaling In New Hampshire Car Accidents: When Trying To Be A Courteous Driver Backfires

It’s a common occurrence: one driver yields the right of way and waves another driver into traffic. Most of the time, the first motorist is doing a favor to the second driver by allowing them to go. And most of the time, the act is greatly appreciated. It is even considered a mark of a courteous driver. However, sometimes the second motorist is subsequently involved in a car accident. In those situations, the well-intentioned “waving driver” might be subject to legal liability.

In New Hampshire, every person must refrain from causing personal injury and property damage to other persons. In the context of driving, motorists have a duty “to use ordinary care to prevent injury to others.” Howland v. Cressy, 95 N.H. 205, 207 (1948). The extent of that duty depends on the circumstances. If a driver fails to use ordinary care under the circumstances, he or she will be deemed negligent.

The New Hampshire Supreme Court has stated that, “absent special circumstances,” a driver who signals another motor vehicle operator to proceed owes no “duty of care to other motorists on the roadway.” Williams v. O’Brien, 140 N.H. 595, 596 (1995). Put another way, the “mere act of signaling does not, by itself, create a duty to insure the safety of other operators on the highway.” That said, a duty does exist if the signaling driver knows (or should know) of “special circumstances which create, or could reasonably create, a foreseeable risk of harm” to the second car or other motorists. Id. For example, if the signaling driver knows (or should know) that the signalee (i.e., car being waved on) has obstructed visibility of other motorists on the highway, “then the signaler assumes a duty to exercise reasonable care in giving a signal.” The basis for this rule of law is the principle that “one who voluntarily assumes a duty” — such as, for example, signaling another driver that it is safe to proceed – “thereafter has a duty to act with reasonable care.” Carignan v. N.H. Int’l Speedway, 151 N.H. 409, 413 (2004).

Essentially, the duty imposed on a signaling driver is adjudged on a case by case basis. There may be a duty when “a special relationship indicating heightened reliance exists” (for instance, if the signaler is a police officer), where “the parties are not driving in ordinary circumstances” (like during a snowstorm), or “there exist other unusual obstacles or obstructions in the roadway (for example, passing a truck where the path ahead is obscured).” Williams, 140 N.H. at 599.

The Williams case involved a signalee driver who came out into traffic and was then struck by a third motorist. It was the third motorist who was severely injured, and the third motorist sued the signaling driver. Although the Court affirmed dismissal of the complaint against the signaling driver, it did so because no “special circumstances” had been identified which would have imposed a duty on the signaling driver. The Court was clear that under different circumstances the signaling driver could have a duty of care to not only the signalee (car being waved on), but also to third party motorists.

The Williams court did not discuss whether there would be a different standard of care as between the signaling driver and the signalee versus the signaling driver and a third party. Courts in other jurisdictions have reached different conclusions; indeed, some state that, as a matter of law, the signaling driver owes no duty to third party motorists period. However, it appears that the majority of jurisdictions hold negligent signalers liable, even to “third” parties. Lokey v. Breuner, 243 P.3d 384 (Mont. 2010).

In negligent signaling cases, it is the jury’s responsibility to determine whether the hand gesture in question was reasonably interpreted by the other driver as a sign that it was safe to proceed. Woods v. O’Neil, 767 N.E.2d 1119 (Mass. App. Ct. 2002).

CONCLUSION

If you were injured because another driver waved you out into traffic, you may have claims against both the signaling driver and the motorist that collided with you. The possibility of another defendant/responsible party is especially important if one of the drivers was uninsured or has insufficient insurance coverage to compensate you for your injuries. Although not all states allow a cause of action for “negligent signaling,” New Hampshire Supreme Court precedent is clear that — at least under certain circumstances — such a claim is viable.

If you were the victim of a car accident, contact us for a free consultation. We handle most personal injury cases on a contingency fee basis: you don’t pay any attorney’s fees unless we successfully recover a verdict or settlement. Welts, White & Fontaine, PC is Nashua’s largest law firm and has decades of experience handling car accident lawsuits and claims. We represent clients statewide.

Contact Welts, White & Fontaine, PC by calling (603) 883-0797 or writing to us here.

Author: Israel F. Piedra

This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion.

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29 Factory Street Nashua, New Hampshire 03060
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