6 tips for effective estate planning
Far too often, excuses keep people from estate planning, whether they feel too young, it sounds too complicated, or it’s not a topic they want, or feel prepared, to address. But the reality is, estate planning is a crucial step to ensure your assets are managed and distributed according to your wishes after you pass away, or should you be unable to make decisions on your own. Estate planning simplifies the process for your beneficiaries and family members, providing peace of mind knowing that your wishes will be carried out when you are no longer able to express your choices. Plus, without a proper plan in place, your estate could be subject to estate laws, tax climates and other stipulations that may not align with your goals, even in New Hampshire — which has some of the most attractive trust and tax laws in the country.
To be prepared and best navigate your estate plan, keep these tips in mind:
1. Simplify. One of the primary goals of estate planning is to simplify the process for your beneficiaries after you are no longer able to manage your own affairs. This doesn’t mean simplifying your assets, but rather the processes involved in settling your estate. By clearly outlining your wishes in a will, trust and other estate planning documents, such as designating a power of attorney and health care directives, you can make it easier for the person(s) responsible for managing and settling your affairs.
2. Designate. Choosing the right person or organization to settle your estate is crucial. This individual or entity will be responsible for carrying out your wishes and managing your assets as your executor or trustee. Put your wishes down in writing and select someone you trust to handle these responsibilities. Once your documents are drafted, be sure to tell your loved ones where they are and how to access them.
3. Control. You’ve worked hard to build your wealth, and estate planning allows you to maintain control over how your assets are managed and distributed. Without an outlined plan, state laws will dictate the distribution of your assets, which may not reflect your desires. If maintaining control of your wealth is important, consider setting up a trust. Through trust planning, you can specify exactly how and when your assets will be distributed, ensuring that your wishes are honored. Remember, estate plans are not static and should be reviewed and updated as life circumstances change due to a marriage, divorce, retirement, or every 5-7 years. Evaluate the status of your beneficiaries, too. Every person’s situation is unique, but with careful estate planning, you can achieve your goals and provide for your loved ones in a way that works for you and for them.
4. Know your options. A will takes effect only after you pass away, but a trust can be used to appoint someone to manage your affairs if you become unable to make decisions, for example due to memory loss. This person can ensure your expenses are paid and your medical needs are met. It’s important to know who will take care of these responsibilities when you no longer can. Have a plan in place.
5. Consider the cost benefits. There can be significant cost benefits to having a well-organized estate plan, namely avoiding the state from stepping in to appoint a fiduciary to settle your estate. By working with an attorney to create a comprehensive plan, you can ensure that your estate is settled in an orderly and cost-effective manner by someone you trust.
6. Factor in New Hampshire law. New Hampshire offers some of the most attractive trust and tax laws in the country, with many advantages around delegated trusts, directed trusts, dynasty trusts, trust protectors and trust advisors, and more. Plus, administration of a trust can be divided among two or more trustees, overturning the traditional concept of a unitary trusteeship. New Hampshire also offers tax advantages for non-grantor trusts, including no state level capital gains tax or interest and dividends tax, and allows settlors to retain certain rights, powers and interests. Whether you’re a resident of New Hampshire or have residency elsewhere, understand how New Hampshire law may benefit your estate plan.
By following these tips and working with experienced trust professionals, you can draw upon highly knowledgeable experts who, along with your other advisors including a lawyer and an accountant, can help you prepare a plan that addresses your specific wishes and circumstances. After all, ensuring your estate plan remains relevant, effective and managed according to your wishes provides peace of mind for you and your family.
Susan Martore-Baker is president of Cambridge Trust Wealth Management New Hampshire, a division of Eastern Bank, where she also oversees Cambridge Trust Company of New Hampshire.
