Much has been written and discussed about what a revocable trust is and how tax laws have changed to make revocable trusts applicable to more people. However, it is important to note how a revocable trust, under New Hampshire’s laws, can benefit you and your family.
There are a number of ways to organize a discussion about how a revocable trust can benefit you. A useful way is to think of it is not just as the benefits that are realized once you (being the person who creates the revocable trust) have passed away. There are also benefits of a revocable trust if you were ever to become incapacitated. Understandably, our own mortality or permanent mental incapacity are not topics many of us truly enjoy discussing. The important thing to remember is a properly drafted revocable trust can benefit you while you are alive and after you have passed away.
Bills Get Paid If You Are Incapacitated
If you were to be incapacitated, a benefit of having your money and property in a properly drafted revocable trust is that your bank accounts would be set up to continue to receive money and pay bills on your behalf.
Creating a document that creates the process for paying your bills does not sound all that glamorous or exciting. However, if you were to become temporarily or permanently incapacitated – for example as the result of an accident – it should be very comforting and reassuring to you to know your family would not be dealing with what just happened to you while simultaneously trying to figure out how to make sure the bills get paid on time.
The Successor Trustee
A properly drafted trust should operate as a type of instruction manual for how your money and property has to be used for your benefit; namely, your health or healthcare, maintenance, and support. Your trust, then, ensures that you and your family continue to get the benefits of the money and things that you have worked hard to get. Those instructions would be in your trust document.
If you were to be incapacitated, the successor trustee would step into your shoes. The successor trustee is a person who you pre-selected and listed in your trust document. They have the power to take care of financial accounts in your trust and make sure your bills get paid. A trustee can be thought of as the manager of the money and property that a trust owns. A successor trustee is someone who manages the money and property in your trust if you are unable to. They must follow your instructions in your trust document.
It Can Be Changed
A key benefit of a revocable trust created under New Hampshire law is that you can make changes to any part of the trust. You can also end the trust arrangement, as long as you are mentally competent. Even if you were to become incapacitated, your successor trustee would have power to make changes to certain parts of your trust to make sure it is followed.
Shorter Probate Court Process
After you pass away, a revocable trust can benefit you (indirectly, of course) and your family, in a number of important ways. First, by transferring your money and the ownership of your property into your revocable trust, your family will be able to avoid the expense and delay of having those things go through New Hampshire’s mandatory probate administration process. On average, it can take an estate 15 months to get through this process. Your money and property will not go where you wanted it to until after it is complete. Under New Hampshire law, the probate courts only have the power to review what a person owned in his/her own name as of the moment he/she passed away. Putting your money and property into a revocable trust means that the trustee owns it, not you. This greatly shortens the time and expense of the probate court process.
If the ownership of your money (bank accounts, etc.) and property are in your name, the information about those assets has to be filed with the probate court as part of the estate administration process. Typically, New Hampshire considers estate administration files public records. That means any person can walk into any probate court, ask to see any of those files, and see what you – and therefore, your spouse or family – have for assets. The public can even make photocopies of that information. Under New Hampshire law, a revocable trust is a private agreement or arrangement. Unless there is a legal dispute over the document, the instructions, arrangements, money and property in your revocable trust stay as you had it during your lifetime – private information. The public does not have a right to see it.
In addition, with a properly drafted revocable trust under New Hampshire law, you can control not only who gets how much of your money and property, but when and how each person receives it and under what conditions they can get it. With just a Will, the only thing you can control is who gets your things. If someone is to receive money, he or she gets it all at once, in a lump sum payment. For most people, that is the worst way to receive “free” money. It is not likely to be spent wisely. For some, it will be spent foolishly. It could even be spent in ways that will leave them worse off than if they never received it.
Very few of us want to make things worse for our family, especially our kids. With a revocable trust, you can provide instructions for the successor trustee to distribute money and property in many different ways. For example, paying it out over a number of separate payments, over a number of years, only if certain conditions are met (like graduating high school, college, etc.). The successor trustee could also make payments on behalf of someone (like rent payments, education costs, groceries, etc.)
Lastly, a revocable trust, rightly, can provide you with a sense of success and a testament to all of your hard work, good decisions, and the love you have for your family. A revocable trust is a very useful and beneficial document to have in your estate plan. You can enjoy its benefits from the moment it is created and for the rest of your life. Your family can benefit after you have passed away. A revocable trust should suit your particular goals and situation. It is very important that you entrust the task of drafting the documents to an estate planning attorney who will take the time to get to know you and who has the knowledge to draft it correctly.
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