But did you know that the state where you establish your trust can make a significant difference in the future trustee’s ability to manage the trust’s investments and modify its provisions, if needed, even after it becomes irrevocable?
The state where you establish your trust will also affect its tax liability.
That’s why so many people are taking a closer look at establishing their trusts in “trust-friendly” states like New Hampshire, Delaware, South Dakota, and Alaska. These states have created a legal environment that is attractive to all parties involved in trust creation and administration, including grantors, beneficiaries, trustees, drafting attorneys, and other estate planning professionals.
In New Hampshire, for example, trust laws are regularly reviewed, updated, and modernized to make sure they address today’s need
s for flexibility. New Hampshire also allows trust grantors to establish several types of trusts not available in many other states. Those trusts include:
If you want your trust to stay in existence for many generations, even forever, you can do this by creating a Dynasty Trust in New Hampshire that continues into the future without violating the Rule Against Perpetuities. This is not the situation in most states which require that a trust terminate within a specific number of years or at the end of someone’s lifetime (a life in being).
This means that a trust you create for a particular purpose or beneficiaries does not need to terminate according to a set time frame or lifetime. It can continue for many generations -- or for eternity, if you choose -- under current law.
New Hampshire law also allows for investment and administrative responsibilities to be separated so that a grantor – the person who establishes the trust- can appoint different trustees or agents for investments, distributions, and other decisions. This division of duties is not possible in many other states. If directed in the trust document, an advisor can be considered an “excluded fiduciary” and will not be liable for the actions of the other advisors.
Also called wealth preservation trusts, these trusts provide significant protection for assets held in the trust from a grantor or settlor’s creditors (such as those arising from litigation or divorce) while still allowing access to the trust’s funds. To protect assets in this way, the trust must be irrevocable and have an independent trustee.
Other features that make establishing trusts in New Hampshire desirable include:
So, if you believe that the administration of an ongoing irrevocable trust could become difficult in the future – even 100 years from now – decanting the trust to a new one in New Hampshire gives the trustee the ability to change the trust to make it more workable or close it down completely in favor of one that does work, keeping your original intentions in mind.
While many of the trust features and provisions described above are not permitted in other states, they are available in New Hampshire to individuals living in any state -- as long as specific guidelines are met and the trust is drafted correctly.
That’s why it’s important to work with a qualified attorney and trust professionals who have knowledge of New Hampshire trust laws. They can help you take advantage of the special trust benefits that the state offers and guide you through the process of establishing or moving a trust to the Granite State.
For more on how Cambridge Trust can help you realize the benefits of a New Hampshire trust: