Bar News - March 18, 2015
Elder, Estate Planning & Probate Law: Watch Out for Traps with Standard Estate Planning Forms
By: Benjamin T. Siracusa Hillman
Attorneys drafting estate planning documents often rely on forms as a starting point. However, as experienced estate planners know, preparing wills and powers of attorney is not as simple as filling in the client’s name on a form. New Hampshire law sets a number of traps for unwary users of such forms. (Although not directly addressed here, some of these traps apply to drafting standalone trusts as well.) Here are a few to watch out for:
Avoid the Pretermitted Heir Statute. New Hampshire’s pretermitted heir statute, RSA 551:10, has existed in its current form for almost two centuries and has generated litigation for about as long. The statute creates a rule of law that the omission of a child or issue of a child from a will is accidental unless there is evidence in the will itself that the omission was intentional. Drafters can generally avoid its inadvertent application by explicitly naming all of the testator’s children in the testator’s will, taking care not to omit any predeceased children. Doing so should preclude the testator’s children and the issue of any children or predeceased children from invoking the statute to take against the will. See In re Estate of Laura (1997); In re Estate of Treloar (2004).
Avoid the Anti-Lapse Statute. New Hampshire’s anti-lapse statute, RSA 551:12, provides that when the intended recipient of a gift of real or personal property predeceases the testator, the gift passes to the “heirs in the descending line” of the would-be recipient. When drafting will provisions that provide for the disposition of property, avoid unintended applications of this statute by specifically providing for the situation where the would-be recipient predeceases the testator. Even if the outcome resulting from the anti-lapse statute is consistent with your client’s intent, it is best to specify who is next in line to receive the gift to avoid any potential ambiguities.
Specify Whether Wills Are Mutual. When preparing wills for spouses, be sure to include a provision in both wills specifying whether or not the spouses are executing the wills as part of an agreement between them that they will not change their wills in the future. See Shaka v. Shaka (1980).
Include a Self-Proving Affidavit with Every Will. While not required to make a will valid, a self-providing affidavit should always be included with a will in order to avoid the need for the witnesses to testify regarding the will’s execution. See RSA 551:2-a.
Waive Accounting and Bond Requirements in a Testamentary Trust. While testamentary trusts are often disfavored for reasons beyond the scope of this article, there are situations in which they are appropriate or even necessary. Since 2011, the law has permitted a testator to expressly waive the previously mandatory requirement that a trustee of a testamentary trust file annual accountings in the probate court.
The law has also removed the previously mandatory bonding requirement in the event that annual accountings are also waived. So, if your client’s will includes a testamentary trust and he or she does not want to require the trustee to file annual accountings with the probate court or to be bonded, be sure to affirmatively waive these requirements. The trustee will still have to report to the beneficiaries at least annually, unless the instrument expressly waives that requirement, too. See RSA 564:1, 564:19, and 564-B:8-813.
Affix an Executed Principal’s Disclosure Statement and Attorney-in-Fact’s Acknowledgement Form to a Durable General Power of Attorney. When preparing a durable general power of attorney, have the principal execute the statutory disclosure statement at the time of executing the power of attorney, and have the attorney-in-fact execute the statutory acknowledgement form prior to exercising his or her powers. An attorney-in-fact has no power to act where the acknowledgment form is not executed and affixed to the power of attorney. See RSA 506:6, VI(a), VII(a); Eaton v. Eaton (2013).
Include Specific Gifting Provisions in a Durable General Power of Attorney. When preparing a durable general power of attorney, drafters should specify whether the attorney-in-fact is authorized to make gifts, whether the attorney-in-fact is authorized to make gifts to him or herself, and whether the attorney-in-fact is authorized to make gifts that deprive the principal of sufficient assets or income to provide for the principal’s care without relying on Medicaid, other public assistance, or charity. See RSA 506:6, V.
Benjamin T. Siracusa Hillman is an attorney at Shaheen & Gordon, in Concord and Dover. He focuses his practice on elder law, estate planning, and probate litigation.