Estate Planning

First, what is a Power of Attorney?  It is a document in which you can name an Agent to act on your behalf in ways authorized in the Power of Attorney and it is an important part of an estate plan.  When the Agent has authority to act is also included in the Power of Attorney document, for instance, an Agent can be given authority to act immediately or could only act if you are incapacitated.  A Power of Attorney could give your Agent broad powers to basically do anything that you could do in your name, like sign your checks and make withdrawals from your bank account.

Let’s look at two scenarios: One where there is no power of attorney in place and one where there is.

Scenario One:  What happens if I do not have a Power of Attorney?

This scenario can become an issue if you become incapacitated.

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One of our attorneys, Sarah Frankel, was honored to be able to speak last month at the Monadnock Summit for Caregivers of Aging Loved Ones.  Sarah presented at two sessions that focused on acting as someone’s agent under a Power of Attorney or Advance Healthcare Directives, the importance of putting an estate plan into place before a crisis or incapacity, and planning with Wills and Revocable Living Trusts.
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In recent years, we have distributed our Legacy Letter Template with our estate plans.  These templates are a way to get you started if you wanted to write a letter to memorialize your own family history, values, wishes, and any personal messages to particular people.  This is one aspect of the personal side of estate planning.  The legal side of estate planning can accomplish certain things such as naming your choice of individuals who will be in charge in case of capacity or after death and stating how your remaining assets should be divided among your beneficiaries; however, they do not necessarily provide the personal connection to your survivors and generations to come.  A letter with your own thoughts and in your own handwriting could be the best gift that you leave behind.
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Many people worry about what will happen to their animals if they were to pass away suddenly or have to move from their homes.  Planning ahead for your pets can be an important part of your estate plan.

As far as providing for them after you pass away, you can write provisions in your Will or Trust that state where or with whom you would want your pets placed as well as an amount to be paid to the intended placement, if any. Another option could be a pet trust, which is recognized in New Hampshire.  After you pass away, the assets in your pet trust would be used by your Trustee to take care of your pet(s) for the pet’s lifetime.

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In our context, “Probate” refers to the court-supervised settlement of the estate of someone who has passed away.  A Probate Administration is generally needed if someone passes away owning an asset in his or her own personal name, such as a bank account in the deceased’s person’s name only.  Typically jointly owned assets or assets with valid beneficiary designations will not need to pass through the Probate process but will pass directly to the other owner or beneficiary.  At Ward Legal Group, we assist people who are named as executors in Wills, or who want to settle the estate of someone who died without a will (see intestacy blog post) to determine what might need to go through Probate and to help them navigate that process.

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The laws of intestacy apply when someone passes away without a will.  There are other circumstances in which the laws of intestacy apply, such as if there was a will but it was determined to be invalid.  New Hampshire has a statute that states how an estate should be divided in the case of intestacy.  If there is a surviving spouse, s/he will generally receive some distribution, the amount depending on whether there are surviving children or parents of the deceased.  For instance, if there are no parents or children of the deceased, then the surviving spouse would receive the entire estate.  However, if the decedent is survived by a spouse and children who are also the children of the surviving spouse, then the surviving spouse receives the first $250,000 plus ½ of the balance of the estate.  Estate planning, such as with a Will or Trust, can avoid having your estate being divided up in this way, so that you can give what you have to whom to you want, when you want, and in the way that you want. 

In New Hampshire, if one parent dies, the general rule is that the surviving parent would then be considered the guardian of the child or children.  If both parents are deceased or lack parental rights, then someone (or an authorized agency like the Division for Children, Youth, and Families) could petition the Probate or Family Court for guardianship over the child or children. 

There are different kinds of guardianships:  over the estate and over the person.  A guardianship over the person is necessary in order to make decisions regarding living arrangements and healthcare for the child.  A guardian over the estate would manage the minor’s property and financial affairs.   There could be more than one guardian appointed for a child.

You can nominate a guardian for your children in a Will.  It is helpful to also name successor guardians as well as the probate judge is not required to appoint your choice of guardian.

You have options for providing for your minor children in your estate plan.

In a will you not only can name guardians for your children, but you can also describe how you would want your estate to be distributed to them after you pass away.  One option is to distribute everything outright to your children (or to a guardian of the child).  Another option is to set up in your will separate trusts for each of your children, with a trustee who makes distributions to each child.  You can state some guidelines as to in which circumstances you think that the trustee should make these distributions. 

Yet another option could be to set up a “common pot trust” in your will.  In this scenario, your estate would not be broken up into separate trusts like the previous example, but instead, held in common for all of your children.  A common pot trust can delay division into equal shares until younger children have had the same assistance as older children for support and education.  A trustee could make unequal distributions to your children based on their needs, and could make advancements to older children for things like buying a home.  The common pot trust could terminate when the youngest child reaches a stated age and then the rest could be distributed out equally to your children.

Similar arrangements can be made in a revocable living trust plan.

A revocable living trust is an effective substitute for a will.  It is a document that contains your set of instructions for managing your affairs while you are alive and well, during incapacity, and after your death.  It may include who gets what provisions in which you name beneficiaries of your trust and state how you would like your trust property to be distributed.  It may also include who’s in charge provisions in which you can name trustees and successor trustees who can serve in case of your incapacity or death. 

A trust can avoid probate if that is your estate planning goal.  An important piece of planning with a trust is what we call “funding.”  Funding means that assets are titled and beneficiary designations are made in such a way as to work with your estate plan.  For more information on estate planning, click here.

A will is a document that may include who gets what provisions that name beneficiaries of your estate and how you want your estate to be divided.  You may also include specific distributions of particular pieces of your personal property.  A will may also include who’s in charge provisions, such as naming an executor and a guardian for minor children. 

A will does not “avoid probate.”  Probate Court will typically need to be involved when someone dies owning assets in his/her own personal name.  A will can be viewed as a set of instructions for the Probate Court regarding how the estate should be distributed and who should be in charge.   For more information about Probate Administration click here.

Our estate planning process typically starts with a preparation meeting.  Prior to the preparation meeting you would have received information from us, including our Estate Planning Worksheet.  At the meeting, one of our attorneys will meet with you to discuss your estate planning goals, review the Worksheet, and discuss your options for designing your estate plan. 

In some cases we design your plan during the preparation meeting.  In more involved cases, we may schedule you to come back in to have a more in-depth discussion about the design of your plan.  Once the design is established, we will schedule you for a delivery meeting.  At this meeting, one of our attorneys will review your estate plan documents with you and then the documents are signed and delivered to you.

For more information about our process click here.