This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion.
This question was asked recently at an initial trust review meeting with a married couple from Merrimack, New Hampshire who had drafted their trust and other estate planning documents some years ago with a different estate planning attorney. For those readers who do not already have a Trust, a Trust is an estate planning document that, among other things, allows the creators of the trust (referred to as “Grantors” or “Donors”) to avoid the probate process while maintaining control of assets. During the Grantors lifetimes, title of most assets (with the possible exception of qualified retirement assets) should be transferred to the name of the Revocable Trust. By transferring assets to the trust, the Trustee (the majority of our New Hampshire Estate Planning clients are both Grantors and Trustees of their revocable trust), would have complete control over all trust property. They can pay expenses, make gifts, take out a mortgage, or do anything else associated with owning and using trust property. During lifetime, a Revocable Trust is not a separate tax paying entity for income tax purposes, and all income earned on Trust-owned assets would still be reported on an individual income tax return.
Upon death, any individually held assets (assets that are either not held jointly and do not have a beneficiary designation) pass through a Will to that individuals’ named beneficiaries. If there is no Will, such assets pass by the laws of intestacy. Either way, an individuals’ estate would need to go through a process in the Probate Court known as “probate”. The probate process is labor intensive. It requires newspaper notices, an appointment of an Executor or Administrator, letters to heirs, and a statutory waiting period, all of which can be costly and time-consuming. The records of an Estate, including a Will, if any, and often an Inventory of all probate assets, become part of the public record.
By setting up and funding a Revocable Trust during life, you avoid the onerous and expensive probate process, and simplify and expedite the process of transferring assets upon death. Upon death, your successor Trustee would be able to distribute Trust assets to beneficiaries of your choice in accordance with the terms of your Trust without any court involvement.
For more detailed information, please contact Attorney John Polgrean to better understand your Trust options and to arrange a free initial consultation.
Our offices are located in Nashua but we support all of Southern New Hampshire and Northern Massachusetts.