Of all that has been written and discussed about what a revocable trust is and is not and how tax laws have changed to make revocable trusts applicable to more people, there is still more to be stated about how a revocable trust, under New Hampshire’s laws, can benefit you and your family.
In a discussion of how a revocable trust can benefit you, there are a number of ways to organize that discussion, but I have found that a useful way to organize the discussion is to think of it not just of the benefits that are realized once you (being the person who creates the revocable trust) have passed away, but also the benefits of a revocable trust if you were ever to become incapacitated. Understandably, neither of these topics, our own mortality or permanent mental incapacity, are ones that many of us truly enjoy discussing. The important thing to remember is that a properly drafted revocable trust can benefit you while you are alive and after you have passed away.
If you were to find yourself somewhere between the land of the living and the land of the dead, a benefit of having your money and property in a properly drafted revocable trust is that your checking account(s) and other bank accounts would be set up to continue to receive money on your behalf and pay bills on your behalf. Now, creating a document that creates the process for paying your bills does not sound all that glamorous or exciting, but if you were to become temporarily or permanently incapacitated – especially as the result of an accident or something like that – it should be very comforting and reassuring to you to know that your family would not be dealing with what just happened to you, grappling with how each of their lives has just taken a turn for the worse, and simultaneously trying to figure out where everything is and how to make sure the rent or mortgage gets paid on time, the electricity and insurance gets paid, etc.
A properly drafted trust also should operate, essentially, 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, because those instructions would be in your trust document. If you were to be incapacitated, the successor trustee, a person who you pre-selected and listed in your trust document, would “step into your shoes” and have the power to take care of the 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 the person, who you have selected, who manages the money and property in your trust, if you are unable to do it. Again, the successor trustee must follow your instructions in your trust document.
Certainly, one of the key benefits of a revocable trust that you create under New Hampshire law is that you can make changes to any part of the trust and you can end the trust arrangement, as long as you are mentally competent. Even if you were to become incapacitated, your successor trustee still would have power to make changes to certain parts of your trust to make sure that how you wanted your money and property to be used still happens.
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 all of 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, before your money and property go to the people who you wanted it to go to. 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.
Also, 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 are considered public records. That means any person can walk into any probate court, ask to see any of those files, 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 and arrangements in your revocable trust and the money and property that you have in it 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 each person is to receive it, how they get it, and under what conditions they can get it. With just a Will, the only thing you can control is who gets your stuff. If someone is to receive money, he or she just 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 and even in ways that will leave them worse off than if they didn’t receive it at all. 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. Such as, 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.), and for the successor trustee to 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 that you have for your family. A revocable trust is a very useful and beneficial document to have in your estate plan. It can be created so you are able to enjoy its benefits from the moment it is created and for the rest of your life – and afterwards. A revocable trust should suit your particular goals and situation, so 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.