If someone in New Hampshire dies without a will, that person’s assets are distributed by a court in accordance with New Hampshire law. Many people think that by having a will they can avoid the process of having a court distribute their assets (known as “probate”), but this is not the case. Before assets in a will can be disbursed, a probate court must first validate the will and give interested parties an opportunity to contest the will.
Which assets avoid probate?
Even if your will is subject to probate, you may have other assets that are not. For instance, a retirement account that names a beneficiary will generally not go through probate, provided the beneficiary is at least 18 years of age. Property that you own together with someone else as joint tenants will also avoid probate if there is a right of survivorship, meaning that your portion of the property will pass to the other owner when you die.
Benefits of avoiding probate
When a will goes to probate court, family members, creditors, and beneficiaries named in the will (all of whom are considered “interested parties”) can challenge the will on a variety of bases. Even if no one contests the will, the probate process can take several months or even years, and it takes money from the decedent’s estate in costs.
Living trusts as an alternative to wills
One way to avoid the probate process is to put your assets into a living trust rather than a will. Living trusts have named beneficiaries as well as a named trustee, who manages the trust. Since property cannot pass to a minor, assets can be held in a trust until a beneficiary comes of age.
Living trusts can either be revocable, meaning they can be amended or changed during the trustor’s lifetime, or irrevocable. Irrevocable and revocable trusts can also differ in the benefits they offer, such as a possible tax break for beneficiaries. If you want to learn more about estate planning and the options available to you, you may want to speak with an estate planning attorney.