New Hampshire passes new trust statute

In the June 2006 RealProperty and Probate Bulletin, Christina Thoda of Fulbright & Jaworski L.L.P. writes:

The Trust Modernization andCompetitiveness Act, SB 394, passed by both houses of New Hampshire’slegislature this past April, amends the state’s current trust statute in orderto make New Hampshire more attractive for those individuals establishing orservicing trusts. Backers of the bill argue that the new legislation, alongwith the state’s lack of income tax and already favorable trust laws, willbenefit New Hampshire by potentially creating new jobs and millions in statebusiness tax revenue. The legislation streamlines the application process forthe formation of trust companies and clarifies the authority of thesecompanies, conferring upon them the power and privileges applicable to alimited liability corporation. The statute provides for the appointment ofTrust Protectors and Trust Advisors and states that Trustees are notresponsible for the acts of such Protectors and Advisors. The provisions of theUniform Principal and Income Act, including the Power to Adjust, are adopted inthe New Hampshire Act. The Act also allows for the formation of “FamilyFiduciary Services Companies”–entities which specifically service one ormore family members rather than the general public. Though these new companieswould not be allowed to take deposits or make loans, the law essentially allowsany family with $500,000 in start-up capital to form their own private trustcompany to manage and control the family’s wealth. A final key provision of thelaw includes additions, ensuring that confidential information only be sharedwith state and federal regulators.