Ask the Experts: Planning is paramount for wills, trusts and estates

Planning for the future, particularly as a business owner, requires more than a simple will. Our panelist of professionals explore the fundamentals of estate planning, from choosing between wills and trusts to preparing for incapacity and business succession. Their insights highlight how thoughtful planning can protect assets, reduce legal complications, maximize financial benefits and ensure your wishes are carried out for both family and business interests.

Panelists:

• Sheliah M. Kaufold, Frank B. Mesmer Jr., and Richard Thorner, Wadleigh Starr & Peters, wadleighlaw.com

• Amanda K. Steenhuis, Esq., and Jocelyn P. Frawley, Esq., Shaheen & Gordon, P.A., shaheengordon.com

• Richard Schoepke, Chief Trust Officer, NBT Bank, nbtbank.com

• Christopher J. Degenhardt, Assistant Vice President and Commercial Banking, Service Credit Union, servicecu.org

• Paul Stanley, Managing Partner and Chief Investment Officer, Granite Bay Wealth Management, granitebaywm.com

Sheliah M. Kaufold, Frank B. Mesmer Jr., and Richard Thorner, Wadleigh Starr & Peters

Why do I need an estate plan?

In short, it simplifies the process after your passing for those you leave behind. If you die without an estate plan, state law, known as intestate succession, dictates asset distribution. Under this law, your estate would typically be distributed to your family, but only after the time-consuming and often expensive probate court process.

In the event you become incapacitated with no plan in place, a probate judge may allow a court-appointed guardian to undertake some estate planning on your behalf. This, too, may be a costly process. Absent court authorization, you may not be able to have an estate plan effectuated in the event of incapacity.

How do I decide between a will or a trust?

Deciding between a trust and a will, or both, depends on several factors, including your current situation, what you are trying to achieve and the extent of your assets. Trusts can avoid probate and offer privacy but may require ongoing management and costs, especially if amendments are made. Wills are simpler and generally less costly but are subject to probate, which, as mentioned, is time-consuming, expensive and can delay asset distribution. Factors to be considered include the value and type of assets, your desire to control assets after death, your family situation and any issues that may need to be addressed for children, business ownership, future changes and health matters.

It is imperative to consult with an estate planning professional who can tailor the appropriate plan to address your specific goals and ensure documents accurately reflect your wishes.

How often should I review my plans?

An estate plan isn’t “set it and forget it.” Savvy clients review their estate plan every 3-5 years for potential updates. As well, major life changes like marriage, divorce, birth/death of a family member, inheritance, starting a new business, sales or purchases of large assets, starting a business, moving or changes in health, may necessitate a review of the plan to ensure it still reflects your wishes.

What other documents should I consider in my estate planning?

All adults should have a will whether or not they have a trust as well as durable powers of attorney for both financial matters and health care. If minor children are involved, a provision in the will is needed to nominate someone to care for the children, and a trust is recommended to manage assets for them.

The will should name guardians, choosing someone aligned with their values and who is capable of caring for the children long-term. Trusts should be configured to protect assets for the children while dictating how they will inherit assets, ensuring the assets last to cover essentials like care and education.

Another vital document is the Power of Attorney (POA), a legal document naming an agent who can make financial and/or medical decisions if you are unable to do so. The POA for finances can manage affairs like bills and investments, whereas the Healthcare POA allows the agent to make health care decisions on your behalf. Both documents ensure privacy and efficient management by alleviating the need to seek court permission.

Blended families or second marriages may require more customized solutions. Estate plans for blended families, second marriages and other complex dynamics are essential for preventing conflict, protecting inheritances, ensuring a surviving spouse’s security, and clearly defining asset distribution when default laws fall short in addressing your unique family situation. The best way to do this is by making a trust.

Even a seemingly straightforward situation can be complicated by the absence of a trust or will. Consulting with an attorney to define this process will simplify an already emotional time, leaving your loved ones able to focus on each other.

Amanda K. Steenhuis, Esq., and Jocelyn P. Frawley, Esq., Shaheen & Gordon, P.A.

What are the basics of a comprehensive estate plan?

Most estate planning attorneys will encourage you to plan for the management of your assets and health care decision-making during your incapacity and also the distribution of those assets after you pass. The former include the health care Advance Directive and Durable Power of Attorney. The latter directs the distribution of your estate upon your death and includes a will and/or a trust.

A will directs the distribution of your probate assets and nominates a guardian of your minor children. A trust creates a legal entity that can hold title. After your death, a properly funded trust will allow your assets to be distributed outside of the probate process, privately and according to your beneficiaries’ timeline.

What’s the difference between a will and a trust? Do I need both?

Both a will and a trust can direct where and how your assets pass to your intended beneficiaries upon your death. One key difference is that a will does not take effect until you pass away, whereas a trust becomes effective immediately upon signing and funding it. A trust allows for the management of your assets by the trustee during your life, incapacity and following your death. Assets that are held by the trust, or that name the trust as the direct beneficiary, are not included in your probate estate and are therefore not subject to the court’s procedures.

Even if you have a trust, you should always also have a will. In the case of estate planning that incorporates a revocable trust, it is common practice to execute a “pour-over” will that directs any assets held in your individual name upon your passing be transferred to your trust for final distribution. This ensures that any assets that unexpectedly end up in your probate estate are still distributed according to your stated wishes.

Who makes my decisions if I become incapacitated?

If you are incapacitated without a plan in place, the law provides road maps for others to make medical and legal/financial decisions for you. A doctor can appoint a surrogate to make medical decisions on your behalf for up to 180 days. After 180 days, the authority terminates, and if you remain incapacitated, someone must petition the court for Guardianship of the Person to make your medical decisions. For legal and financial decisions, someone would petition the court for Guardianship of the Estate, as there is no option for a surrogate to make these types of decisions.

Executing an Advance Directive, which names the agent you want to make your medical decisions, and gives guidance on life-sustaining measures, and a Durable Power of Attorney, which allows you to grant an agent the authority to manage your finances or make legal decisions, provides your future self the assurances that, if something unexpected happens to you, the right people can make the best decisions for your care.

What happens to people’s estates when they do not properly execute a will or trust?

Without an estate plan, you leave the distribution of your assets to the default process outlined in New Hampshire law, known as intestacy. NH RSA 561:1 outlines how your assets will be distributed if you do not execute a valid will or trust during your lifetime. Many people are surprised to learn that their spouse may not receive their entire estate under the default intestacy laws. In cases where there are no close relatives, one’s estate can even pass to the state of New Hampshire.

Creating your estate plan will ensure that the people and charities you care about will inherit your estate according to your wishes. This is especially important if you want specific property or gifts directed to specific individuals, want to leave money to charity, are in a second marriage, or have minor children or children with special needs.

No matter your situation, we encourage you to build a strong relationship with your estate planning attorney so they can provide the most well-informed advice on how to effectuate your goals.

Richard Schoepke, Chief Trust Officer, NBT Bank

When you’re ready to move on from your business, what are your options?

Business owners generally have three primary succession options: transferring ownership to the next generation, selling the business or winding down operations. Shutting down the business is the least desirable path, because any value attached to your business’s goodwill is lost. Additionally, you are financially limited to the value of the underlying business assets as they are sold off. Handing over the business to your children or another party preserves the underlying goodwill and income generation potential, but it also requires careful planning to ensure it continues to prosper so that you can comfortably retire. Selling your business also requires significant planning to ensure the business is properly valued and employees are prepared for the transition. Additionally, you’ll need thorough tax planning advice well in advance of the sale to minimize and/or mitigate the resulting capital gains tax. No matter which path you choose, it is critical to assemble a solid team of advisors, including your banker, attorney and tax professional, to help guide you along the way.

How do I pass my business to my children or another party?

You’ve decided to transition ownership of your business to your children or another party, now what? A critical first step is to seek professional assistance in determining fair market value to sell at a price that supports you through retirement. For tax considerations, make sure to consult your tax professional for guidance on gifting the business to your successor(s), which can help defer tax payments and avoid increasing tax payments later on. This is just one example of where close collaboration with your advisors is critical. Finally, you should develop a structured estate plan to cover the details of the handover, any debt instruments, and likely, the plan of action for handing down the business via a trust. Once the plan and financials are in order, you can determine your retirement timeline and your successor’s takeover. These steps help preserve the long-term legacy of your business and ensure your successor is positioned to succeed.

I don’t have children or another party who can or wants to take over my business. What should I do?

An alternative to handing down your business is to sell it. There are a variety of ways to divest, including a private equity takeover, selling to a competitor or an employee stock purchase. Selling requires a long runway and detailed planning with a trusted merger and acquisition attorney to help guide you through the cash infusion post-sale, planning for capital gains tax and helping determine how the sales proceeds will be managed to care for your retirement and fund your estate plan. It is also critical to get a proper valuation and ensure the business’s financials are in order. A final consideration for sellers is potential relocation. Many retirees who sell plan to relocate, so it is important to be aware of tax implications associated with relocation both in your current home state and your potential retirement destination to avoid being surprised by another large tax bill. Again, close collaboration with your team of advisors will help you navigate these considerations.

I haven’t prepared a succession plan and now I need to quickly move on. What do I do?

Your first move should be to consult with your financial planner, tax professional and attorney as soon as possible. The further ahead of the succession event that you engage with your advisors, the more flexibility there is in how the transition happens and the resulting tax consequences. It is not too late to make and implement a plan for your business and an estate plan for you and your family, and implement those plans. In an ideal scenario, you’ve laid plans for succession, but if you find yourself suddenly needing to divest, you still have an option: shutting down. In this case, you would sell off all assets and anything else of value from the company and discontinue business. You will not realize the full value of the company in this case, but sometimes it is the only route.

Carefully planning your succession helps both to protect your assets now for your eventual retirement and gives you a clear line of sight on the future of your business. It will also help you anticipate legal and financial matters that can impact your retirement many years after you retire. A well-thought-out succession plan means peace of mind and creating a lasting legacy.

Christopher J. Degenhardt, Assistant Vice President and Commercial Banking, Service Credit Union

What estate planning tools can help business owners protect both personal and business assets?

A well-structured estate plan protects both personal wealth and business interests. For business owners, the foundation typically includes a will, trusts, powers of attorney and buy-sell agreements.

A will ensures assets are distributed according to your wishes, including business ownership. However, because wills often go through probate, they may delay business continuity.

Trusts can help avoid probate, maintain privacy and ensure a smoother transition. Revocable trusts allow flexibility during your lifetime, while irrevocable trusts may offer added asset protection and potential tax advantages.

Powers of attorney may also play a critical role. A financial POA allows a trusted individual to manage finances or business matters if you become incapacitated, ensuring operations continue without disruption. For business owners, buy-sell agreements are especially important. These agreements define how ownership will transfer in the event of death, disability or retirement, helping prevent disputes and ensuring continuity.

How should business succession planning be incorporated into a broader estate plan?

Succession planning is a core component of estate planning, not a separate exercise.

A strong plan answers key questions: Who will lead the business? Will ownership transfer to family members, partners or be sold? How will the transition be funded?

Integrating succession planning ensures alignment between personal goals and business realities. For example, if one family member is involved in the business and another is not, your estate plan can balance distributions while preserving operations.

The goal is continuity. A coordinated plan reduces uncertainty, minimizes disruption and helps ensure long-term success.

What are the tax implications of passing a business to the next generation?

Transferring a business can involve estate taxes, potential state-level taxes and capital gains considerations.

While current federal estate tax exemptions are relatively high, they may change. Without planning, tax obligations could force heirs to sell assets or even the business to cover costs.

Strategies such as gifting shares over time, using trusts or applying valuation discounts may help reduce the taxable estate. Structuring ownership appropriately may also improve tax efficiency. A tax advisor can offer guidance tailored to each specific situation.

Working with legal and financial professionals is essential. Proactive planning provides more flexibility, while waiting limits available options.

How can trusts be structured to address complex ownership or partnership arrangements?

Trusts offer flexibility for managing complex ownership structures.

For family businesses, trusts can keep ownership within the family while assigning control to individuals best equipped to manage operations. This helps reduce conflict and maintain stability.

In partnerships, trusts can work alongside buy-sell agreements to define how ownership interests are transferred and valued, creating clarity for all parties.

Trusts can also allow for staged distributions, providing income or ownership over time rather than all at once. This approach can support long-term stability and responsible management.

What is the biggest mistake business owners make when it comes to estate planning?

The most common mistake is waiting too long or failing to update a plan.

Business owners are often focused on daily operations and assume they have more time. Others create a plan but don’t revisit it as their business or personal situation evolves.

An outdated or incomplete plan can lead to confusion, unnecessary taxes and potential disputes.

Estate planning should be reviewed regularly to ensure it reflects current goals and circumstances.

Estate planning is about more than documents. It ensures what you’ve built continues to support your family and your business. With the right plan in place, you can move forward with confidence knowing your legacy is protected.

Paul Stanley, Managing Partner and Chief Investment Officer, Granite Bay Wealth Management

How can a company’s structure offer different protections or benefits?

A company’s structure plays a critical role in determining how well owners are protected from personal liability. LLCs and corporations are generally the most effective at shielding personal assets. In an LLC, the members are typically not personally responsible for business debts or lawsuits, meaning creditors can only pursue business assets. Corporations provide similar protection, often with stronger legal precedent, but require more formal governance, such as boards of directors and annual meetings.

Partnerships and sole proprietorships, on the other hand, offer little to no liability protection. In a general partnership, each partner can be held personally liable for the actions of the other partners, creating significant risk. A limited partnership can mitigate some of that exposure but still may not offer the same level of protection as an LLC or corporation.

The tradeoff comes down to complexity and cost.

LLCs are typically simpler to maintain and flexible in taxation, while corporations — especially C corporations — can involve double taxation but may offer advantages in raising capital and long-term growth. Choosing the right structure requires balancing liability protection, tax efficiency and administrative burden.

What should a company consider as part of their goals and transition plans?

Companies should articulate their long-term vision — whether growth, family succession or steady income — and build a transition plan that supports those goals.

Succession planning is a key component. Without a clear transition plan, businesses risk disruption or loss of value. This includes identifying future leadership, creating buy-sell agreements, and ensuring key roles are documented and transferable. For family-owned businesses, this can also involve estate planning considerations.

Financial readiness is equally important. Companies should assess their valuation, cash flow and debt to ensure they are attractive to buyers, or capable of supporting a transition. Tax implications also play a major role, as poor planning can result in unnecessary tax burdens during a sale or transfer.

Finally, contingency planning should not be overlooked. Unexpected events such as disability or death of a key owner can significantly impact operations, so having insurance and legal safeguards in place is essential.

What are some new developments in tax laws or regulations that businesses should know about?

One key area is the treatment of pass-through income. Many small businesses structured as LLCs or S corporations benefit from the Qualified Business Income (QBI) deduction, but eligibility and thresholds can change, making proactive planning important.

Depreciation rules are another major consideration.

Bonus depreciation has been phasing down after previously allowing 100% expensing of certain assets.

This change affects capital investment strategies, as businesses may no longer receive the same immediate tax benefits.

State-level taxation is also becoming more complex, especially with varying rules on remote work. Businesses operating across state lines need to monitor where they may have tax obligations.

Additionally, regulatory focus on transparency and reporting — such as beneficial ownership reporting requirements — has increased compliance expectations.

Businesses should ensure they meet new filing requirements to avoid penalties.

How can businesses balance tax efficiency with operational flexibility?

While minimizing taxes is important, overly aggressive tax strategies can limit flexibility or increase risk.

For example, electing S corporation status may reduce self-employment taxes, but it comes with stricter rules on ownership and profit distribution.

Similarly, choosing a C corporation structure might allow for reinvesting profits at a lower corporate tax rate, but could create challenges when distributing earnings due to double taxation.

The key is to align tax strategy with business goals.

A company focused on rapid growth and outside investment may prioritize structure and scalability over short-term tax savings. Conversely, a lifestyle business may benefit more from pass-through taxation and simplicity.

Ultimately, the best approach is proactive planning with advisors who can adjust strategies as laws and business needs evolve.