Adults in New Hampshire with dependent family members often want to leave as much of their resources as possible for their loved ones. The estate planning process involves not only clarifying who should receive specific assets from someone’s estate, but also how to pass as much of that property to loved ones as possible.
Parties ranging from individual creditors and tax authorities to the New Hampshire Medicaid estate recovery program may bring claims against someone’s assets when they die that could reduce what their family members inherit. Maximizing the inheritance rights of children and grandchildren is one of the reasons that trusts have become increasingly popular among middle-class and even working-class families during the estate planning process.
How trusts can help
Whatever property someone has in their name when they die will become their estate. The assets in someone’s estate are vulnerable to claims from tax authorities and any other party with a financial interest in the estate, including creditors and those with a judgment against the deceased. Valid claims brought against the estate for the repayment of debts or Medicaid benefits will take priority over the right of surviving family members to inherit those assets.
Thankfully, people can protect their most valuable resources from such claims by changing their ownership. Property held in a trust won’t have to pass through probate court in most cases. It will be protected from lawsuits brought by creditors and will not contribute to the possibility of tax obligations for the estate. Additionally, the choice to move major assets to a trust before retirement may make it easier for someone to qualify for Medicaid benefits if they eventually need to move to a nursing home or require in-home support from nursing staff, which are expenses that Medicare typically does not cover but Medicaid might.
Trusts help to preserve certain assets by keeping them out of someone’s estate and diminishing their personal holdings, making it easier for them to get benefits when they need support. Finally, trusts are beneficial for many testators in part because they can provide more detailed instructions about the distribution of their property and are harder to challenge in probate court.
Seeking legal guidance concerning one’s legacy and reviewing current holdings in depth may facilitate the creation of an estate plan – possibly including at least one trust – that can actually achieve someone’s goals.