A living trust in New Hampshire can be a valuable estate planning tool. A revocable living trust (sometimes known as an inter vivos trust) allows you to control your assets during life and direct how they are distributed after your death.
Living Trusts in New Hampshire
A New Hampshire living trust is established by the grantor. As the grantor, you place your assets in the trust. You choose a trustee who manages them during your lifetime for your benefit. It is most common to simply name yourself as the trustee. A successor trustee is put in place to take over after your death. After your death, your assets are distributed to the beneficiaries according to the provisions of the trust.
To make your trust as effective as possible, you will want to place as many assets into it as you can. Retirement accounts and life insurance cannot be placed in a revocable living trust. Your trust is flexible and you can make any changes you want to it at any time, even eliminating it. After your death it cannot be changed. An irrevocable trust in contrast cannot be altered, ever.
One of the prime benefits of a living trust is that it completely bypasses probate. A will must be approved and put into effect by a probate court, a process that can take months and can involve the cost of an executor, attorney, and court expenses. Trusts never need to go through probate. New Hampshire has not enacted the Uniform Probate Code, so its probate procedures are not considered to be streamlined. That being said, there is a simplified probate procedure that is available when the will gives everything to the surviving spouse or there is no spouse and everything goes to an only child. All other situations require full probate and it is important to understand that none of the inheritances can be released to heirs until probate has been completed. A trust, on the other hand, allows distribution immediately with no wait, if that is what you want. In addition, a trust allows you to avoid multiple probate proceedings in multiple states if you own property in other states.
Do I Need a Living Trust in New Hampshire?
A living trust New Hampshire gives you great control over your assets now and in the future. While you are alive, life goes on as normal as you live in your home, use your car, spend money, give gifts, and manage all of your assets yourself as trustee. Everything is technically owned by the trust, but you have complete freedom to do what you wish. After your death, the successor trustee steps in and continues to manage and protect the assets in the trust. The provisions you have written into the trust specify exactly how and when assets will be passed to your beneficiaries. For example, you can state that your grandchildren receive some money on their twenty-first birthday and the rest when they turn thirty. If you use a will to create an inheritance, all of the money is inherited as soon as probate is concluded.
Creating a living trust in New Hampshire provides you with privacy that is not available with a will. A will is made public record when it goes through probate. A trust document is never revealed in the same way. In New Hampshire an annual accounting of a trust is required to be filed with the court system once the trust becomes irrevocable (upon your death), so there is some transparency.
While a living trust does not technically shield your assets from creditors, in practice, it can help avoid them. While a creditor has the right to attach assets in a living trust, they may not be able to find them and if the assets are distributed quickly after your death, locating them may be more work than it is worth.
Your revocable living trust protects you should you become mentally incapacitated. All of your assets are already controlled, owned, and managed by the trust and a conservatorship proceeding is likely unnecessary. Your financial life is protected by the trust.
Living Trusts and Estate Taxes in New Hampshire
Estate taxes cannot be avoided using a revocable living trust. New Hampshire has no inheritance tax currently in place, but there is a federal estate tax in effect for estates over $5 million. Special trusts such as AB trusts (also known as a martial trusts or QTIP trusts) do avoid estate tax by passing assets from the deceased spouse directly to the surviving spouse. Living trusts do not prevent your assets from being used for Medicaid spend down.
How to Create a Living Trust in New Hampshire
To create a living trust in New Hampshire, you sign the trust document in front of a notary public. The trust is not in effect though until you actually transfer ownership of assets to its name. A living trust provides a variety of benefits. If you use a living trust with full knowledge of its abilities and limitations, it can be a useful tool.
Ready to create a New Hampshire living trust? LegalZoom can help you create a living trust online in three simple steps. Get started by answering a few simple questions. LegalZoom will review your answers and mail your complete living trust package to you.