By Rachel Cautero
New Hampshire does not charge an inheritance or estate tax. But if you inherit an estate from someone who lived in a state that does have such taxes, you may still have to pay it. In this detailed guide of New Hampshire’s inheritance laws, we break down intestate succession, probate, taxes, what makes a will valid and more. If you’d like professional guidance on your estate planning, or just need help investing your inheritance, you can use SmartAsset’s advisor matching tool to find a financial advisor in your area.Does New Hampshire Have an Inheritance Tax or Estate Tax?
New Hampshire does not have an inheritance tax. However, if you inherit from someone who lived in or owned property in a state that does have an estate tax, such as Maryland or Kentucky, then you may have to deal with that tax.
It is one of the 38 states in the U.S. that does not levy an estate tax. But you may not get out of taxes altogether just because you inherited an estate in New Hampshire. The federal estate tax is applied if an inherited estate is more than $11.58 million in 2020. While it’s taxed only on the overage and not the entire estate, the rate can be as high as 40%.
While similar, state taxes and inheritance taxes differ in a few important ways. Estate taxes, also called the death tax, are taken out of the deceased’s estate immediately after their passing. Inheritance taxes are imposed upon the deceased’s heirs after they have received their inheritance.
New Hampshire also does not have a gift tax, but the federal gift tax will kick in if you give an individual more than $15,000 in one calendar year. Also, the state does not have a salary or wage tax, but there is a 5% tax on dividends and interest earned on investments, plus high property taxes.Other Necessary Tax Filings
To file any of these estate-based returns, you’ll need to apply for an employer identification number (EIN) with the IRS. You can do this online, by fax or via mail.Dying With a Will in New Hampshire
If you die and leave behind a valid will and last testament in New Hampshire, it will take precedence over the state’s intestacy laws. Dying with a last will and testament in place, or dying testate, is the best way to control to whom and how your estate is distributed, regardless of your state’s intestate succession laws.
Dying without a valid will and last testament is called dying intestate. This means your estate will be subject to your state’s succession laws and may even have to go through the probate process. In many cases, it’s best to avoid the probate process, as it can be lengthy and expensive.
Wondering what the requirements for a valid will and last testament in New Hampshire are? For starters, the testator (the person who created the will) must be at least 18 years old, of sound mind and the will must be signed by the testator and two witnesses. The will must name a beneficiary and must be in writing. However, in some cases, New Hampshire does recognize oral wills, but only if made by a soldier in active military service or mariner or seaman at sea.
An estate in New Hampshire skips probate if it’s $25,000 or less. This is called the simplified probate process and could be beneficial for an estate’s heirs, as the probate process can be long and expensive.
But if an estate in New Hampshire exceeds this threshold, it will be required to go through the probate process, which includes filing paperwork such as the deceased’s will, the petition for probate, and posting a notice in the local newspaper. The court will then grant the estate’s executor the legal right to act on behalf of the estate, all creditors and taxes will be paid, and only then will the heirs collect their share of the estate.
New Hampshire does not adhere to the Uniform Probate Code, a standardized set of probate procedures used across 15 states.Dying Without a Will in New Hampshire
If you die without a valid will and last testament in place in New Hampshire, the distribution of your estate will be subject to the state’s intestate succession laws, and may also be subject to the probate process, which can be both lengthy and expensive.
Generally speaking, if you die intestate in New Hampshire, your closest living relatives will inherit your estate, though that depends on who you leave behind – a spouse, children, parents, even siblings.
As with many states, there are some assets in New Hampshire that are exempt from intestate succession laws, such as property in a living trust, life insurance policies, retirement accounts, payable-on-death bank accounts, real estate that is transfer-upon-death, and community property in which the property passes on to the surviving spouse.Spouses in New Hampshire Inheritance Law
Spouses will generally be entitled to a large share if not all of your intestate assets, but that depends on whether you leave behind other heirs, such as children or parents, according to laws in New Hampshire, which does not recognize common law marriage.
Leave behind a spouse and no children or surviving parents, and your spouse inherits your entire estate. If you die with a surviving spouse and children with that spouse (and your spouse has no other children), then your spouse gets the first $250,000 of your estate, plus ½ the balance, while your children get the rest.
Die with a surviving spouse and children with that spouse and your spouse has children with someone other than you, and your spouse will get the first $150,000 of your estate, plus ½ the remainder. Your children inherit the rest.
If you leave behind a spouse and children with someone other than that spouse, your spouse gets the first $100,000 of your estate, plus ½ the rest, and your children get the rest. Die intestate and leave behind only a spouse and parents, and your spouse gets the $250,000 of your intestate property, plus 3/4 of the balance, while your parents get the rest.Children in New Hampshire Inheritance Law
If you die intestate in New Hampshire, your children are entitled to part of your estate, but how much depends on whether you also leave behind a spouse, and if you have children with someone other than your surviving spouse.
For example, leave behind a spouse and children with that spouse (and your spouse has no other children), then your spouse gets the first $250,000 of your estate, plus ½ the balance, while your children get everything else.
Die with a surviving spouse, children with that spouse and your spouse has children with someone other than you, and it changes a bit – your spouse gets the first $150,000 of your estate, plus ½ the remainder. Your children inherit the rest.
But leave behind a spouse and children with someone other than that spouse, your spouse gets the first $100,000 of your estate, plus ½ the rest, and your children get the rest.
In New Hampshire, children are only eligible to receive part of your intestate assets if they are legally recognized children by the state. So, they have to be adopted, born within marriage, or born outside of marriage if a marriage later occurred or paternity was established. Grandchildren are also eligible to receive a share.Intestate Succession: Spouses and Children Inheritance Situation Who Inherits Your Property Spouse, but no children or living parents – Entire estate to spouse Spouse and children with that spouse – Spouse gets the first $250,000 of your estate, plus ½ the balance, children get the rest. Spouse and children with spouse and someone other that spouse – Spouse gets the first $100,000 of your estate, plus ½ the remainder, children get the rest. Spouse and children with spouse and spouse has children from previous relationship – Spouse gets the first $150,000 of your estate, plus ½ the remainder. Your children inherit the rest. Spouse and parents -Spouse inherits $250,000 plus 3/4 of the balance. Parents get the rest. Unmarried Individuals Without Children in New Hampshire Inheritance Law
If you are unmarried and die without a valid will and last testament in New Hampshire, then your estate passes on to your children in equal shares.
If you die intestate unmarried and with no children, then by law, your parents inherit your entire estate. If your parents are no longer living, your siblings are next in line.
And if you die intestate and don’t have any surviving family, your property goes back to the state, though this is rare. These succession laws are only enacted in the case of an intestate estate. If a valid will and last testament are in place, it takes precedence over a state’s succession law.Intestate Succession: Extended Family Inheritance Situation Who Inherits Your Property Children, but unmarried – Entire estate to children Parents, but no spouse, children, or siblings – Entire estate to parents Parents are deceased, but no spouse or children – Estate split among siblings in equal shares Non-Probate New Hampshire Inheritances
New Hampshire allows some property to be exempt from intestate succession laws. This includes property in a living trust, life insurance policies, retirement accounts, payable on death bank accounts, real estate that is transfer-upon-death, and community property in which the asset passes on to the surviving spouse.Other Situations in New Hampshire Inheritance Law
There are a few unique situations regarding New Hampshire’s inheritance laws to keep in mind. For example, according to state law, half relatives are treated the same as whole relatives, and an heir’s immigration status does not affect their right to inherit their share of your estate. And in order to inherit a portion of your estate, an heir must outlive you for 120 hours. And if an heir was conceived before you died but born after you died, they are still entitled to their portion of your estate.Resources for Estate Planning
Managing your own estate, or handling the intricacies of inheriting money from the estate of a loved one, can get complicated. That’s why many people choose to work with a professional.
The SmartAsset financial advisor matching tool will pair you with as many as three nearby financial advisors equipped to handle your estate and inheritance planning needs. If you’re ready to work with a financial advisor in your area, get started now.
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