Regardless of the size of your estate, it is always a good idea to have a will. At minimum, your will allows you to name the person you would like to administer your estate in probate, your executor or executrix. Without a will, the Probate Court will name an administrator. This might be someone you would not choose or approve of given a choice.

Your will also allows you to name the persons to whom you would like to leave your property. Without a will, your property will be divided by the Probate Court under the statutory descent and distribution laws. Your property then could wind up being distributed other than how you would have liked.

If you have minor children, your will allows you to name as guardian the person(s) you would like to care for your children. The absence of a will can lead to much family turmoil in this respect.

A word about the probate process is helpful to understand some benefits of the living trust. Probate is a public process that begins with proving the will, or establishing that there is no will. The opening of the estate is published in the newspaper. A executor or administrator is appointed. That person must obtain a bond from an insurance company. An inventory of estate assets is filed with values established by an appointed appraiser. If it is necessary to sell estate assets, such as the home or its contents, the Probate Judge must first grant permission. The estate remains open for a minimum of six months to allow any claimants against the estate to come forward. The estate is closed with a final accounting to the probate court indicating that all the bills have been paid and all distributions properly made to the beneficiaries.

The living trust avoids probate because you put all your property in the name of your trust. That means when you die, the property is not part of your probate estate. Your trust owns it. If you own a home or other real estate, you deed the real estate to your trust. You still have complete control over all your property because you are the Trustee of your own trust. Revocable means changeable. You can transfer your property in or out of the trust anytime.

The living trust can allow your Successor Trustee to hold the inheritance until the child is older. Many trusts specify, for example, that the principal trust fund will be distributed to the children in thirds when they reach ages 25, 30 and 35. In the meantime, the interest can be paid out to the beneficiaries or kept in the trust fund. The Successor Trustee is usually given broad discretion to pay from the trust fund for education, medical needs and other worthy causes for the beneficiary.

Married spouses do not need this credit as between them. They have an unlimited marital deduction. One spouse can leave the other a zillion dollars with no tax. Trouble is, the first spouse's unified credit was not used; it was lost. That is where the trust is helpful. By using specific language, the trust preserves the credit of the first spouse to die. Then the second spouse dies with $1.2 million in credits to protect the estate against taxation.

The Living Will

You might recall the Karen Quinlan case where a young woman was brain dead after a car crash. She was kept alive artificially for seven years despite the pleas of her family for death with dignity. Courts finally allowed doctors to "pull the plug" after it was established that Karen had expressly said she would not have wanted to be kept alive this way. Almost immediately, all the States, including New Hampshire, passed living will laws to allow the expression of intent, yes or no, on the question of terminating the artificial means. The living will is just an authorization, not a mandate, for terminating artificial means of life.

This takes the living will a step further by naming an agent to make health care decisions for you in case you are incapacitated.

This powerful document allows your named designee to step into your shoes in the legal sense. That person then has the power to administer your estate in case you cannot. Such a power of attorney would be prepared even with a trust because it is easier for your Successor Trustee to use than the long trust document. Because the power of attorney is so powerful, it is often accompanied by an escrow letter to the lawyer's office asking that it be held until you or your doctors indicate that it is needed.

Additional questions? Please call:

(603) 668-1971