New law bodes well for N.H. trust services
On July, 11, Governor Hassan signed SB 289 which amended certain New Hampshire trust laws effective, retroactive back to July 1, 2014. That bill, which was co-sponsored by Senators D’Allesandro and Bradley, continues the decade-long effort to make New Hampshire one of the best legal environments for trusts and their administration.
As trusts migrate to New Hampshire, additional trust companies, investment advisors and other legal and accounting services are adding jobs to the New Hampshire economy. There are several key provisions of this new legislation.
First, trustees will be given the unilateral authority to modify and update trust administrative provisions without creating a new trust and transferring assets into that new trust. Transferring assets into a new trust can have a number of significant hurdles where the assets comprise of real estate (especially when subject to mortgages), limited partnership interests and other interests subject to transfer restrictions.
Second, trustees and executors (and other trust advisors and trust protectors) and their attorneys are now entitled to attorney-client privilege for communications between their lawyers and advice given concerning how to serve in their roles as fiduciaries. Previously, it was uncertain whether beneficiaries of a trust could gain access to these confidential discussions. This created situations where trustees might be wary of seeking legal guidance when they needed it the most.
Third, trusts can now require beneficiaries to resolve disputes through nonjudicial means (i.e., mediation and arbitration). With litigation becoming increasingly unattractive due to court delays, costs and legal fees, trusts can now impose a mechanism to streamline how to resolve these controversies.
Finally, New Hampshire allows for directed trusts – a trust where one of several trustees has specific responsibilities for the trust (i.e., usually investments or distributions). The remaining trustees, which are not involved in those decisions, are “excluded” fiduciaries and not subject to any claims or liability. This open architecture of structuring a trust allows clients to tailor trusts to their individual circumstances. With these changes, New Hampshire continues to be one of the most attractive jurisdictions for trust administration – good news for trustees and good news for our New Hampshire economy.
William V. A. Zorn 603-628-1340 McLane, Graf, Raulerson & Midddleton Professional Association 900 Elm Street P.O. Box 326 Manchester, NH 03105-0326 firstname.lastname@example.org