TITLE LVI
PROBATE COURTS AND DECEDENTS' ESTATES
Chapter 564-B
NEW HAMPSHIRE TRUST CODE
ARTICLE 1
GENERAL PROVISIONS AND DEFINITIONS
Section 564-B:1-101
564-B:1-101 Short Title. –
This chapter may be cited as the New Hampshire Trust Code.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2015, 272:67, eff. Oct. 1, 2015.
Section 564-B:1-102
564-B:1-102 Scope. –
(a) This chapter applies to express trusts, charitable or noncharitable, and trusts created pursuant to a statute, judgment, or decree that requires the trust to be administered in the manner of an express trust.
(b) Without precluding other means for establishing that this chapter applies to a specific trust, this chapter applies to a trust to the extent that the terms of the trust provide that this state's laws govern the trust's validity, interpretation, or administration.
(c) Unless otherwise provided under the terms of the trust, New Hampshire law shall apply to the administrative matters of a trust that has its principal place of administration within this state.
(d) This chapter shall not limit the authority of the director of charitable trusts or the department of health and human services as otherwise provided by statute or common law.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:6, eff. July 1, 2014.
Section 564-B:1-103
564-B:1-103 Definitions. –
In this chapter:
(1) "Action," with respect to an act of a trustee, includes a failure to act.
(2) "Beneficiary" means a person that:
(A) has a present or future beneficial interest in a trust, vested or contingent; or
(B) in a capacity other than that of trustee, holds a power of appointment over trust property.
(3) "Charitable trust" means a trust, or portion of a trust, created for a charitable purpose described in RSA 564-B:4-405(a).
(4) "Conservator" means a person appointed by the court to administer the estate of an individual pursuant to RSA 464-A:13.
(5) "Environmental law'' means a federal, state, or local law, rule, regulation, or ordinance relating to protection of the environment.
(6)(a) "Guardian of the estate" means a person appointed by a court to administer the estate of a minor, including a person described in RSA 463:19, or a person appointed by a court to serve as guardian of the estate of an incapacitated person, including a person described in described in RSA 464-A:26, I.
(b) "Guardian of the person" means a person appointed by a court to make decisions regarding the support, care and education of a minor, including as described in RSA 463:12, or a guardian of the person of an incapacitated individual appointed by a court, including a person appointed by the court to carry out the responsibilities described in RSA 464-A:25. The term does not include a guardian ad litem.
(7) "Interests of the beneficiaries" means the beneficial interests provided in the terms of the trust.
(8) "Jurisdiction," with respect to a geographic area, includes a state or country.
(9) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government (including a governmental subdivision, agency, or instrumentality), public corporation, or any other legal or commercial entity.
(10) "Power of withdrawal" means a presently exercisable general power of appointment other than a power exercisable by a trustee which is limited by an ascertainable standard or which is exercisable by another person only upon consent of the trustee or a person holding an adverse interest.
(11) "Property" means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein.
(12) "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's qualification is determined:
(A) is a distributee or permissible distributee of trust income or principal;
(B) would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in subparagraph (A) terminated on that date but the termination of those interests would not cause the trust to terminate; or
(C) would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.
(13) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
(14) "Revocable" as applied to a trust, means revocable by the settlor without the consent of the trustee or a person holding an adverse interest.
(15) "Settlor" means a person, including a testator, who creates, or contributes property to, a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution except to the extent another person has the power to revoke or withdraw that portion.
(16) "Sign" means, with present intent to authenticate or adopt a record,
(i) to execute or adopt a tangible symbol; or
(ii) to attach to or logically associate with the record an electronic sound, symbol, or process.
(17) "Spendthrift provision" means a term of a trust which restrains both voluntary and involuntary transfer of a beneficiary's interest.
(18) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band recognized by federal law or formally acknowledged by a state.
(19) "Terms of a trust" means the manifestation of the settlor's intent regarding a trust's provisions as expressed in the trust instrument or as may be established by other evidence that would be admissible in a judicial proceeding. The terms of the trust may be interpreted, amended, modified, and reformed as provided in this chapter, including by means of a court order or a nonjudicial settlement agreement made in accordance with RSA 564-B:1-111.
(20) "Trust instrument" means an instrument executed by the settlor that contains terms of the trust, including any amendments thereto.
(21) "Trustee" includes an original, additional, and successor trustee, and a cotrustee.
(22) "Ascertainable standard" means a standard related to an individual's health, education, support, or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the Internal Revenue Code.
(23) "Directed trust" means a directed trust as defined in RSA 564-B:7-711(b).
(24) "Excluded fiduciary" means:
(A) A trustee who is an excluded fiduciary under RSA 564-B:7-711(c) or RSA 564-B:7-711(d); or
(B) A trust advisor or trust protector who is an excluded fiduciary under RSA 564-B:7-711(e) or RSA 564-B:7-711(f).
(25) "Include" and "including" means the same as "include, without limitation" and "including, without limitation" regardless of whether expressly specified. Accordingly, the word "include" and any variation of that word shall be construed as words of enlargement and not as words of limitation or restriction.
(26) "Investment company" means an investment company as defined under the federal Investment Company Act of 1940.
(27) "Trust advisor" means any person described in RSA 564-B:12-1201(a).
(28) "Trust protector" means any person described in RSA 564-B:12-1201(a).
(29) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended and as in effect from time to time.
(30) "Good faith" means:
(A) with respect to a trustee, trust advisor, or trust protector, the observance of common standards of honesty, decency, fairness, and reasonableness in accordance with the terms of the trust, the trust's purposes, and the interests of the beneficiaries as their interests are defined under the terms of the trust; or
(B) with respect to a person other than a trustee, trust advisor, trust protector, or beneficiary for purposes of RSA 564-B:10-1012 and RSA 564-B:10-1013, honesty in fact and the observance of reasonable commercial standards of fair dealing.
(31) "Resident" means an individual who is domiciled in the state or jurisdiction in which he or she has his or her principal place of physical presence.
(32) "Agent" includes an agent appointed under a power of attorney.
(33) "Incapacity" means an individual's inability to manage property or business affairs because the individual:
(A) Has an impairment in the ability to receive and evaluate information or make or communicate decisions even with the use of technological assistance; or
(B) Is:
(i) Missing;
(ii) Detained, including incarcerated in a penal system; or
(iii) Outside the United States and unable to return.
Source. 2004, 130:1. 2005, 270:1, 2. 2006, 320:47, 48, eff. Aug. 19, 2006. 2008, 374:2-5, eff. Sept. 9, 2008. 2014, 195:7, 8, eff. July 1, 2014. 2015, 272:64, eff. Oct. 1, 2015. 2017, 257:2, 3, eff. July 18, 2017.
Section 564-B:1-104
564-B:1-104 Knowledge. –
(a) Subject to subsection (b), a person has knowledge of a fact if the person:
(1) has actual knowledge of it;
(2) has received a notice or notification of it; or
(3) from all the facts and circumstances known to the person at the time in question, has reason to know it.
(b) An organization that conducts activities through employees has notice or knowledge of a fact involving a trust only from the time the information was received by an employee having responsibility to act for the trust, or would have been brought to the employee's attention if the organization had exercised reasonable diligence. An organization exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the employee having responsibility to act for the trust and there is reasonable compliance with the routines. Reasonable diligence does not require an employee of the organization to communicate information unless the communication is part of the individual's regular duties or the individual knows a matter involving the trust would be materially affected by the information.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:1-105
564-B:1-105 Default and Mandatory Rules. –
(a) Except as otherwise provided in the terms of the trust, this chapter governs the duties and powers of a trustee, relations among trustees, and the rights and interests of a beneficiary.
(b) The terms of a trust prevail over any provision of this chapter except:
(1) the requirements for creating a trust;
(2) the duty of a trustee to act in good faith and in accordance with the terms of the trust, the purposes of the trust, and the interests of the beneficiaries;
(3) the requirement that a trust and the terms of that trust be for the benefit of its beneficiaries as their interests are defined under the terms of the trust, and that the trust have a purpose that is lawful, not contrary to public policy, and possible to achieve;
(4) the power of the court to modify or terminate a trust under RSA 564-B:4-410 through RSA 564-B:4-416;
(5) the effect of a spendthrift provision and the rights of certain creditors and assignees to reach a trust as provided in article 5;
(6) the power of the court under RSA 564-B:7-702 to require, dispense with, or modify or terminate a bond;
(7) the power of the court under RSA 564-B:7-708(b) to adjust a trustee's compensation specified in the terms of the trust which is unreasonably low or high;
(8) the effect of an exculpatory term under RSA 564-B:10-1008;
(9) the rights under RSA 564-B:10-1010 through RSA 564-B:10-1013 of a person other than a trustee or beneficiary;
(10) statutory periods of limitation for commencing a judicial proceeding;
(11) the power of the court to take such action and exercise such jurisdiction as may be necessary in the interests of justice;
(12) the subject-matter jurisdiction of the court and venue for commencing a proceeding as provided in RSA 564-B:2-203 and RSA 564-B:2-204;
(13) an interested person's rights under RSA 564-B:1-111A(b);
(14) the extent to which a no-contest provision is unenforceable or inapplicable under RSA 564-B:10-1014;
(15) if, under the terms of the trust, a trust advisor or trust protector is a fiduciary, the duty of the trust advisor or trust protector to act in good faith and in accordance with the terms of the trust, the purposes of the trust, and the interests of the beneficiaries;
(16) to the extent that the trust is a charitable trust, the requirement that a trust advisor or trust protector is a fiduciary, regardless of whether the charitable trust was created before, on, or after the effective date of this paragraph or the trust advisor or trust protector accepted his, her, or its appointment before, on, or after the effective date of this paragraph; and
(17) to the extent that a trust is a charitable trust, the limitations on the trustee's power to decant under RSA 564-B:4-418 and the limitations on the trustee's power of modification under RSA 564-B:4-419.
Source. 2004, 130:1. 2005, 270:3, 4. 2006, 320:49, eff. Aug. 19, 2006. 2011, 243:7, eff. Sept. 11, 2011. 2014, 195:9, eff. July 1, 2014. 2017, 257:4, eff. July 18, 2017.
Section 564-B:1-106
564-B:1-106 Common Law of Trusts; Principles of Equity. –
The common law of trusts and principles of equity supplement this chapter, except to the extent modified by this chapter or another statute of this state.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:1-107
564-B:1-107 Governing Law. –
(a) The meaning and effect of the terms of a trust are determined by:
(1) the law of the jurisdiction designated in the terms of the trust unless the designation of that jurisdiction's law is contrary to a strong public policy of the jurisdiction having the most significant relationship to the matter at issue; or
(2) in the absence of a controlling designation in the terms of the trust, the law of the jurisdiction having the most significant relationship to the matter at issue.
(b) Without precluding other circumstances under which this state has the most significant relationship to a matter affecting a trust, this state has the most significant relationship to a matter involving a trust's validity, construction, or administration if:
(1) under the terms of the trust, this state's laws govern that matter; and
(2) the trust has its principal place of administration in this state.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2015, 272:65, eff. Oct. 1, 2015.
Section 564-B:1-108
564-B:1-108 Principal Place of Administration. –
(a) Without precluding other means for establishing a sufficient connection with the designated jurisdiction, terms of a trust designating the principal place of administration are valid and controlling if:
(1) a trustee's principal place of business is located in or a trustee is a resident of the designated jurisdiction; or
(2) all or part of the administration occurs in the designated jurisdiction.
(b) A trustee is under a continuing duty to administer the trust at a place appropriate to its purposes, its administration, and the interests of the beneficiaries.
(c) Without precluding the right of the court to order, approve, or disapprove a transfer, the trustee, in furtherance of the duty prescribed by subsection (b), may transfer the trust's principal place of administration to another state or to a jurisdiction outside of the United States.
(d) The trustee shall notify the qualified beneficiaries of a proposed transfer of a trust's principal place of administration not less than 60 days before initiating the transfer. The notice of proposed transfer must include:
(1) the name of the jurisdiction to which the principal place of administration is to be transferred;
(2) the address and telephone number at the new location at which the trustee can be contacted;
(3) an explanation of the reasons for the proposed transfer;
(4) the date on which the proposed transfer is anticipated to occur; and
(5) the date, not less than 60 days after the giving of the notice, by which the qualified beneficiary must notify the trustee of an objection to the proposed transfer.
(e) The authority of a trustee under this section to transfer a trust's principal place of administration terminates if the qualified beneficiary or, if more than one, a majority of qualified beneficiaries, notifies the trustee of an objection to the proposed transfer on or before the date specified in the notice.
(f) Unless otherwise provided under the terms of the trust or an agreement among the trustees, a trust has a principal place of administration in this state if (1) a trustee's principal place of business is located in this state or, if a trustee is an individual, that trustee is a resident of this state and (2) all or part of the administration occurs in this state.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:10, eff. July 1, 2014.
Section 564-B:1-109
564-B:1-109 Methods and Waiver of Notice. –
(a) Notice to a person under this chapter or the sending of a document to a person under this chapter must be accomplished in a manner reasonably suitable under the circumstances and likely to result in receipt of the notice or document. Permissible methods of notice or for sending a document include first-class mail, personal delivery, commercial delivery service, courier service, and delivery to the person's last known place of residence or place of business, or a properly directed electronic message.
(b) Notice otherwise required under this chapter or a document otherwise required to be sent under this chapter need not be provided to a person whose identity or location is unknown to and not reasonably ascertainable by the trustee.
(c) Notice under this chapter or the sending of a document under this chapter may be waived by the person to be notified or sent the document.
(d) Notice of a judicial proceeding must be given as provided in the applicable rules of civil procedure.
(e) Notice to any minor or incapacitated individual shall not be effective unless such notice is sent to a person who represents and can bind such minor or incapacitated individual in accordance with the provisions of Article 3 of this chapter.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2011, 243:18, eff. Sept. 11, 2011.
Section 564-B:1-110
564-B:1-110 Others Treated as Qualified Beneficiaries. –
(a) A charitable organization expressly designated to receive distributions under the terms of a charitable trust has the rights of a qualified beneficiary under this chapter if the charitable organization, on the date the charitable organization's qualification is being determined:
(1) is a distributee or permissible distributee of trust income or principal;
(2) would be a distributee or permissible distributee of trust income or principal upon the termination of the interests of the distributees then receiving or eligible to receive distributions; or
(3) would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.
(b) A person appointed to enforce a trust created for the care of an animal or another noncharitable purpose as provided in RSA 564-B:4-408 or RSA 564-B:4-409 has the rights of a qualified beneficiary under this chapter.
(c) The director of charitable trusts has the rights of a qualified beneficiary with respect to a charitable trust having its principal place of administration in this state if the charitable trust describes a charitable purpose but does not designate a specific charitable organization as a beneficiary for that charitable purpose and if trust income or principal, on the date the qualification is being determined:
(A) is distributable to carry out the charitable purpose;
(B) would be distributable to carry out the charitable purpose upon the termination of the interests of the distributees or permissible distributees then receiving or eligible to receive distributions; or
(C) would be distributable to carry out the charitable purpose if the trust terminated on that date.
(d) No provision of this chapter shall limit the authority of the director of charitable trusts to supervise and control charitable organizations.
Source. 2004, 130:1. 2005, 270:5. 2006, 320:50, eff. Aug. 19, 2006.
Section 564-B:1-111
564-B:1-111 Nonjudicial Settlement Agreements. –
(a) For purposes of this section, "interested person" means each of the following persons: a trustee; a person who, under the terms of the trust, has the power to enforce the trust; if the trust is a charitable trust, the director of charitable trusts; and any other person, other than the settlor, whose consent would be required in order to achieve a binding settlement were the settlement to be approved by a court.
(b) Except as otherwise provided in subsection (c), all of the interested persons may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust.
(c) A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by a court under this chapter or other applicable law.
(d) Matters that may be resolved by a nonjudicial settlement agreement include without limitation:
(1) the interpretation or construction of the terms of the trust;
(2) the approval of a trustee's report or accounting;
(3) direction to a trustee to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power;
(4) the resignation or appointment of a trustee and the determination of a trustee's compensation;
(5) transfer of a trust's principal place of administration;
(6) liability of a trustee for an action relating to the trust; and
(7) the termination or modification of a trust.
(e) Any interested person may request the court to approve a nonjudicial settlement agreement, to determine whether the representation as provided in article 3 was adequate, and to determine whether the agreement contains terms and conditions the court could have properly approved.
Source. 2004, 130:1. 2006, 320:51, eff. Aug. 19, 2006. 2008, 374:6, eff. Sept. 9, 2008. 2015, 272:57, eff. July 27, 2015.
Section 564-B:1-111A
564-B:1-111A Nonjudicial Dispute Resolution. –
(a) If the terms of the trust require the interested persons to resolve a trust dispute exclusively by reasonable nonjudicial procedures, then those interested persons shall resolve that trust dispute in accordance with the terms of the trust.
(b) An interested person may commence a judicial proceeding to determine whether the nonjudicial procedures are reasonable. To the extent that the terms of the trust purport to prohibit an interested person from commencing a judicial proceeding under this subsection or penalize an interested person for commencing a judicial proceeding under this subsection, those terms of the trust are void.
(c) For purposes of this section, "interested person" means any person who would be an interested person in a judicial proceeding to resolve the trust dispute.
(d) For purposes of this section, "trust dispute" means any matter in which a court has subject-matter jurisdiction under RSA 564-B:2-203, excluding (1) a determination of the validity of the trust or (2) a determination of any material purpose of the trust, including a determination of whether any modification, termination, or other action is consistent with a material purpose of the trust.
(e) Unless the director of charitable trusts expressly consents to the nonjudicial procedures, those procedures shall not apply to any matter involving a charitable trust. Unless the department of health and human services expressly consents to the nonjudicial procedures, those procedures shall not apply to any matter in which that department would be an interested person.
(f)(1) The nonjudicial dispute resolution procedures may include a reasonable procedure by which a person is appointed to represent and bind any one or more of the following persons:
(A) any unborn person;
(B) any minor or other incapacitated person; or
(C) any person whose identity or location is unknown and is not reasonably ascertainable.
(2) The procedure for the appointment of a representative is not reasonable if:
(A) There is a conflict of interest between the person appointing the representative and any interested person;
(B) There is a conflict of interest between the representative and any represented person; or
(C) With respect to any matter that is the subject of the trust dispute, there is a conflict of interest among the persons whom the representative is appointed to represent.
(3) To the extent that the trust dispute involves a trust's modification or termination, a settlor of the trust shall not represent any of the trust's beneficiaries.
Source. 2014, 195:11, eff. July 1, 2014. 2017, 257:5, eff. July 18, 2017; 257:6, eff. Sept. 16, 2017.
Section 564-B:1-112
564-B:1-112 Rules of Construction. –
(a) The rules of construction that apply in this state to the interpretation of and disposition of property by will also apply as appropriate to the interpretation of the terms of a trust and the disposition of the trust property. For the purposes of this section, RSA 551:10 is not a rule of construction. RSA 551:10 shall not apply to any trust.
(b) In interpreting or construing the terms of a trust, the settlor's intent shall be sovereign to the extent that the settlor's intent is lawful, not contrary to public policy, and possible to achieve.
(c) For the purposes of determining the benefit of the beneficiaries, the settlor's intent as expressed in the terms of the trust shall be paramount.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2011, 243:8, eff. Sept. 11, 2011. 2015, 272:58, eff. Oct. 1, 2015. 2018, 120:2, eff. May 30, 2018.
Section 564-B:1-113
564-B:1-113 Precatory Language. –
(a) For purposes of this section, the following definitions apply:
(1) "Letter of wishes" means a record that:
(A) Is not a trust instrument;
(B) Is created by a settlor; and
(C) Contains precatory language.
(2) "Precatory language" means language that:
(A) Is not binding on any trustee, trust advisor, or trust protector;
(B) Expresses the settlor's wishes regarding the exercise of any discretionary power by a trustee, trust advisor, or trust protector; and
(C) Is not inconsistent with the terms of the trust.
(b) In exercising a discretionary power, a trustee, trust advisor, or trust protector may consider precatory language contained in the trust instrument or a letter of wishes.
(c) Precatory language does not impose any duty on any trustee, trust advisor, or trust protector, and the fact that a trustee, trust advisor, or trust protector does not exercise a discretionary power in accordance with precatory language shall not create an inference that the trustee, trust advisor, or trust protector improperly exercised the power.
(d) In determining whether a trustee, trust advisor, or trust protector exercised a discretionary power in a manner that is consistent with the settlor's intent, a court may consider precatory language contained in the trust instrument or a letter of wishes. A court may consider precatory language contained in a letter of wishes regardless of whether the trust instrument is ambiguous.
(e) Except as provided under the terms of the trust or by court order, a trustee, trust advisor, or trust protector shall not have any duty to provide any beneficiary a copy of a letter of wishes.
Source. 2019, 230:1, eff. Sept. 10, 2019.
ARTICLE 2
JUDICIAL PROCEEDINGS
Section 564-B:2-201
564-B:2-201 Role of Court in Administration of Trust. –
(a) The court may intervene in the administration of a trust to the extent its jurisdiction is invoked by an interested person or as provided by law.
(b) A trust, other than a trust created by a will subject to the provisions of RSA 564:19, shall not be subject to continuing judicial supervision unless ordered by the court.
(c) A judicial proceeding involving a trust may relate to any matter involving the trust's administration, including a request for instructions and an action to declare rights.
(d) Each of the following persons may commence a judicial proceeding for the purpose of enforcing the terms of the trust: a settlor; a qualified beneficiary; a trustee; a person who, under the terms of the trust, has the power to enforce the terms of the trust; and in the case of a charitable trust, the director of charitable trusts.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2011, 243:9, eff. Sept. 11, 2011. 2015, 272:59, eff. Oct. 1, 2015.
Section 564-B:2-202
564-B:2-202 Jurisdiction Over Trustee and Beneficiary. –
(a) By accepting the trusteeship of a trust having its principal place of administration in this state or by moving the principal place of administration to this state, the trustee submits personally to the jurisdiction of the courts of this state regarding any matter involving the trust.
(b) With respect to their interests in the trust, the beneficiaries of a trust having its principal place of administration in this state are subject to the jurisdiction of the courts of this state regarding any matter involving the trust. By accepting a distribution from such a trust, the recipient submits personally to the jurisdiction of the courts of this state regarding any matter involving the trust.
(c) This section does not preclude other methods of obtaining jurisdiction over a trustee, beneficiary, or other person receiving property from the trust.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:2-203
564-B:2-203 Subject-Matter Jurisdiction. –
(a) Except as provided in subsection (b), the probate division of the circuit court shall have exclusive jurisdiction of the creation by judgment or decree, interpretation, construction, modification, termination, and administration of those trusts described in RSA 564-A:1, I, and over the appointment, removal, and surcharge of trustees, trust advisors, and trust protectors of such trusts.
(b) The probate division of the circuit court has concurrent jurisdiction with the superior court of proceedings involving charitable uses and trusts other than those trusts described in RSA 564-A:1, I.
Source. 2004, 130:1. 2006, 91:5, eff. May 5, 2006. 2008, 97:3, eff. May 21, 2008. 2014, 195:12, eff. July 1, 2014.
Section 564-B:2-204
564-B:2-204 Venue. –
(a) Except as otherwise provided in subsection (b), venue for a judicial proceeding involving a trust is in the county of this state in which the trust's principal place of administration is or will be located. In the case of a testamentary trust where the estate is not yet closed, venue also may be in the county in which the decedent's estate is being administered.
(b) If a trust has no trustee, venue for a judicial proceeding for the appointment of a trustee is in a county of this state in which a beneficiary resides, in a county in which any trust property is located, and if the trust is created by will, in the county in which the decedent's estate was or is being administered.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:2-205
564-B:2-205 Confidential Communications. –
(a) A communication between an attorney and a client acting as a trustee, trust advisor, or trust protector is privileged and protected from disclosure to the same extent as if the client was acting in his, her, or its individual capacity and was not acting as a trustee, trust advisor, or trust protector.
(b) The privilege is not waived by (1) a fiduciary relationship between the trustee, trust advisor, or trust protector and a beneficiary of the trust or (2) the use of trust property to compensate the attorney for legal services rendered to the trustee, trust advisor, or trust protector.
(c) If an attorney's client is a trustee, trust advisor, or trust protector, then the attorney's client is only the person acting as trustee, trust advisor, or trust protector. A successor trustee, successor trust advisor, or successor trust protector is not the attorney's client solely by reason of succeeding the person with whom the attorney had an attorney-client relationship.
(d) A trustee, trust advisor, or trust protector and his, her, or its successor may agree to share privileged communications relating to some or all matters involving the trust. The disclosure of privileged communications under the agreement does not waive the disclosing party's privilege. Unless the agreement provides otherwise, privileged communications disclosed under the agreement shall not be disclosed to a third party without the disclosing party's consent or a court order.
(e) This section shall not impair or abridge the law governing exceptions to the attorney-client privilege relative to claimants through the same deceased.
Source. 2014, 195:13, eff. July 1, 2014.
ARTICLE 3
REPRESENTATION
Section 564-B:3-301
564-B:3-301 Representation; Basic Effect. –
(a) Notice to a person who may represent and bind another person under this article has the same effect as if notice were given directly to the other person.
(b) The consent of a person who may represent and bind another person under this article is binding on the person represented unless the person represented objects to the representation before the consent would otherwise have become effective.
(c) Except as otherwise provided in RSA 564-B:6-602, a person who under this article may represent a settlor who lacks capacity may receive notice and give a binding consent on the settlor's behalf.
(d) A settlor may not represent and bind a beneficiary under this article with respect to the termination or modification of a trust.
Source. 2004, 130:1. 2005, 270:6, eff. Sept. 20, 2005.
Section 564-B:3-302
564-B:3-302 Representation by Holder of a Power of Appointment. –
(a) To the extent there is no conflict of interest between the holder of a power of appointment and the persons represented with respect to the particular question or dispute, the holder may represent and bind persons whose interests, as permissible appointees, takers in default, or otherwise, are subject to the power.
(b) Subsection (a) applies to any power of appointment, including:
(1) A power in which the permissible appointees include any one or more of:
(A) The holder of the power;
(B) The holder's creditors;
(C) The holder's estate; and
(D) The creditors of the holder's estate; or
(2) A power of appointment in which the permissible appointees:
(A) Excludes each of the persons described in subsection (b)(1), (b)(2), (b)(3), and (b)(4); and
(B) May excluded any one or more other persons;
(3) A testamentary power of appointment; and
(4) A power of appointment exercisable during the holder's life.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2017, 257:7, eff. July 18, 2017.
Section 564-B:3-303
564-B:3-303 Representation by Fiduciaries and Parents. –
To the extent there is no conflict of interest between the representative and the person represented or among those being represented with respect to a particular question or dispute:
(1) a conservator may represent and bind the estate that the conservator controls;
(2) a guardian of the estate may represent and bind the estate that the guardian of the estate controls;
(3) a guardian of the person may represent and bind the ward if a guardian of the ward's estate has not been appointed;
(4) an agent having authority to act with respect to the particular question or dispute may represent and bind the principal;
(5) a trustee may represent and bind the beneficiaries of the trust except as to matters relating to the administration or distribution of the trust;
(6) a personal representative of a decedent's estate may represent and bind persons interested in the estate except as to matters relating to the administration or distribution of the estate;
(7) a parent may represent and bind (i) the parent's minor, incapacitated or unborn child if neither a guardian of the estate nor guardian of the person for the child has been appointed and (ii) a minor, incapacitated or unborn descendent of such child if neither a guardian of the estate of the descendent nor a guardian of the person of the descendent has been appointed; and
(8) a representative who is expressly appointed under the terms of the governing trust instrument, either directly or by appointment of one or more persons who are expressly authorized under the terms of the trust instrument to do so, may represent and bind one or more beneficiaries of the trust as to any matter involving the trust. A representative appointed pursuant to this paragraph shall be presumed to be a fiduciary and, unless otherwise provided under the terms of the trust, must deliver to the trustee a written acceptance of appointment as representative. A representative may not be appointed pursuant to this paragraph to represent the interests of a charitable beneficiary subject to the authority of the director of charitable trusts, as provided in statute and common law.
Source. 2004, 130:1. 2005, 270:7, eff. Sept. 20, 2005. 2008, 374:7, eff. Sept. 9, 2008. 2021, 103:1, eff. Aug. 30, 2021.
Section 564-B:3-304
564-B:3-304 Representation by Person Having Substantially Identical Interest. –
Unless otherwise represented, a minor, incapacitated, or unborn individual, or a person whose identity or location is unknown and not reasonably ascertainable, may be represented by and bound by another having a substantially identical interest with respect to the particular question or dispute, but only to the extent there is no conflict of interest between the representative and the person represented.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2008, 374:28, eff. Sept. 9, 2008. 2011, 243:17, eff. Sept. 11, 2011.
Section 564-B:3-305
564-B:3-305 Appointment of Representative. –
(a) If the court determines that an interest is not represented under this article, or that the otherwise available representation might be inadequate, the court may appoint a representative to receive notice, give consent, and otherwise represent, bind, and act on behalf of a minor, incapacitated, or unborn individual, or a person whose identity or location is unknown. A representative may be appointed to represent several persons or interests.
(b) A representative may act on behalf of the individual represented with respect to any matter arising under this chapter, whether or not a judicial proceeding concerning the trust is pending.
(c) In making decisions, a representative may consider general benefit accruing to the living members of the individual's family.
Source. 2004, 130:1, eff. Oct. 1, 2004.
ARTICLE 4
CREATION, VALIDITY, MODIFICATION, AND TERMINATION OF TRUST
Section 564-B:4-401
564-B:4-401 Methods of Creating Trust. –
A trust may be created by:
(1) transfer of property to another person as trustee during the settlor's lifetime or by will or other disposition taking effect upon the settlor's death;
(2) declaration by the owner of property that the owner holds identifiable property as trustee;
(3) exercise of a power of appointment in favor of a trustee; or
(4) judgment or decree of a court.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2008, 97:4, eff. May 21, 2008.
Section 564-B:4-402
564-B:4-402 Requirements for Creation. –
(a) A trust is created only if:
(1) the settlor has capacity to create a trust;
(2) the settlor indicates an intention to create the trust;
(3) the trust has a definite beneficiary or is:
(A) a charitable trust;
(B) a trust for the care of an animal, as provided in RSA 564-B:4-408; or
(C) a trust for a noncharitable purpose, as provided in RSA 564-B:4-409;
(4) the trustee has duties to perform; and
(5) the same person is not the sole trustee, the sole current beneficiary and the sole remainder beneficiary.
(b) A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities.
(c) A power in a trustee to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails and the property subject to the power passes to the persons who would have taken the property had the power not been conferred.
Source. 2004, 130:1. 2005, 270:8, eff. Sept. 20, 2005.
Section 564-B:4-402A
564-B:4-402A Duration of Trusts. –
(a) Unless a trust is subject to the rule against perpetuities or is a trust for the care of an animal under RSA 564-B:4-408, a trust may be perpetual or may exist for any shorter period of time.
(b) The rule against perpetuities shall not apply to a trust or any disposition of trust property if:
(1) the terms of the trust expressly exempt the trust from the application of the rule against perpetuities; and
(2) under the terms of the trust, an applicable statute, or common law, the trustee or other person to whom the power is properly granted or delegated has the power to sell, mortgage, or lease trust property for any period of time beyond the period that, if this section did not apply to the trust, would be required for an interest in the trust to vest in order to be valid under the rule against perpetuities.
(c) The rule against accumulations shall not apply to any trust to which the rule against perpetuities does not apply.
(d) Subsections (b) and (c) apply to any trust created on or after January 1, 2004. This section otherwise applies to any trust created before, on, or after the effective date of this chapter.
Source. 2014, 195:14, eff. July 1, 2014.
Section 564-B:4-403
564-B:4-403 Trusts Created in Other Jurisdictions. –
A trust not created by will is validly created if its creation complies with the law of the jurisdiction in which the trust instrument was executed, or the law of the jurisdiction in which, at the time of creation:
(1) the settlor was domiciled, had a place of abode, or was a national;
(2) a trustee was domiciled or had a place of business; or
(3) any trust property was located.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:4-404
564-B:4-404 Trust Purposes. –
A trust may be created only to the extent its purposes are lawful, not contrary to public policy, and possible to achieve. A trust and its terms must be for the benefit of its beneficiaries, as their interests are defined under the terms of the trust.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2011, 243:10, eff. Sept. 11, 2011.
Section 564-B:4-405
564-B:4-405 Charitable Purposes; Enforcement. –
(a) A charitable trust may be created for the relief of poverty, the advancement of education or religion, the promotion of health, governmental or municipal purposes, or other purposes the achievement of which is beneficial to the community.
(b) If the terms of a charitable trust do not indicate a particular charitable purpose or beneficiary, the court may select one or more charitable purposes or beneficiaries. The selection must be consistent with the settlor's intention to the extent it can be ascertained.
(c) The settlor of a charitable trust or the director of charitable trusts, among others, may maintain a proceeding to enforce the trust. In any such proceeding where the director of charitable trusts is not a party, the director of charitable trusts shall be joined as a necessary party.
Source. 2004, 130:1. 2006, 320:52, eff. Aug. 19, 2006.
Section 564-B:4-406
564-B:4-406 Validity of Trusts. –
(a) A trust is void to the extent that it was not validly created in accordance with this chapter or its creation was induced by fraud, duress, or undue influence.
(b) A person may commence a judicial proceeding to contest the validity of a trust within the earlier of:
(1) in the case of a trust that was revocable at the settlor's death, 3 years after the settlor's death;
(2) in the case of an irrevocable trust, including a formerly revocable trust that has become irrevocable, 3 years after the trustee sent to the beneficiary a notice described in RSA 564-B:8-813(c)(3); or
(3) in the case of an irrevocable trust, including a trust that was revocable at the settlor's death or a formerly revocable trust that has become irrevocable, 180 days after the trustee sent the person a copy of the trust instrument and a notice informing the person of the trust's existence, the trustee's name, address, and telephone number, and the time allowed for commencing a proceeding to contest the validity of a trust.
(c) A trustee may send the notice described in subsection (b)(3) for purposes of commencing the 180-day limitation period, but the trustee does not have a duty to do so. A trustee shall not be liable to any person for not sending the notice described in subsection (b)(3).
(d) During his or her life, a settlor may commence a judicial proceeding to determine the validity of a trust that he or she created, subject only to the trust's subsequent amendment or revocation if the trust is revocable.
(1) The trust instrument must expressly provide that this state's laws govern the trust's validity, interpretation, and administration, and the trust must have its principal place of administration within this state.
(2) The venue for the judicial proceeding is in the county where the trust has its principal place of administration.
(3) In addition to the settlor, each of the following persons is an interested person in the judicial proceeding:
(A) the settlor's spouse;
(B) the persons who, if the settlor had died on the date of filing the petition, would be the settlor's heirs;
(C) the qualified beneficiaries;
(D) the trustees, trust advisors, and trust protectors;
(E) if the trust is wholly or partially a charitable trust, the director of charitable trusts;
(F) if the trust is a trust for the care of an animal under RSA 564-B:4-408, the persons who, under the terms of the trust, have the power to enforce the trust;
(G) if the trust is a trust authorized under RSA 564-B:4-409, the persons who, under the terms of the trust, have the power to enforce the trust; and
(H) any other persons who would be an interested person in a judicial proceeding to determine the validity of the trust.
(4) In the case of a revocable trust, the qualified beneficiaries and other interested persons shall be determined as if the trust was irrevocable on the date of filing the petition, and each of the qualified beneficiaries and other interested persons shall be deemed possessed of inchoate property rights.
(5) Notice shall be given to each of the interested persons. The court may order notice be given to other persons.
(6) After a hearing, the court shall declare whether the trust is valid or invalid, and it may make other findings of fact and conclusions of law that are appropriate under the circumstances.
(7) A trust for which there is a declaration of validity under this subsection may be modified or revoked in the same manner as a trust for which there is no declaration of validity under this subsection.
(8) A settlor's failure to commence a judicial proceeding under this subsection shall not be construed as evidence or as an admission that the trust is invalid for any reason.
(e) A trustee may proceed to distribute the trust property in accordance with the terms of the trust even though the period for contesting the validity of the trust has not expired. The trustee is not subject to liability for doing so unless:
(1) the trustee knows of a pending judicial proceeding contesting the validity of the trust; or
(2) a potential contestant has notified the trustee of a possible judicial proceeding to contest the trust and a judicial proceeding is commenced within 60 days after the contestant sent the notification.
(f) A beneficiary of a trust that is determined to have been invalid is liable to return any distribution received.
(g) If the laws of this state govern a trust's validity and the trust has its principal place of administration in this state, then the trust and any transfer of property by a settlor to the trust shall not be void or voidable for either of the following reasons:
(1) The laws of a foreign jurisdiction prohibit or do not recognize the concept of a trust; or
(2) The trust or the transfer defeats any forced heirship, legitime, forced share, or any similar heirship right under the laws of a foreign jurisdiction.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:15, eff. July 1, 2014. 2017, 257:8, eff. July 18, 2017.
Section 564-B:4-407
564-B:4-407 Evidence of Oral Trust. –
Except as required by a statute other than this chapter, a trust need not be evidenced by a trust instrument, but the creation of an oral trust and its terms may be established only by clear and convincing evidence.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:4-408
564-B:4-408 Trust for Care of Animal. –
(a) A trust may be created to provide for the care of an animal alive during the settlor's lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor's lifetime, upon the death of the last surviving animal.
(b) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.
(c) Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor's successors in interest.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:4-409
564-B:4-409 Noncharitable Trust Without Ascertainable Beneficiary. –
Except as otherwise provided in RSA 564-B:4-408 or by another statute, the following rules apply:
(1) A trust may be created for a noncharitable purpose without a definite or definitely ascertainable beneficiary or for a noncharitable but otherwise valid purpose.
(2) A trust authorized by this section may be enforced by a trustee, a trust advisor, a trust protector, a person appointed under the terms of the trust or, if no person is so appointed, by a person appointed by the court.
(3) Except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use, property of a trust authorized by this section may be applied only to its intended use, including appointing trust property to or for the benefit of an existing or new trust whose purposes are limited to one or more purposes of the original trust. Except as otherwise provided by the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor's successors in interest.
Source. 2004, 130:1. 2006, 320:53, eff. Aug. 19, 2006. 2008, 374:8, eff. Sept. 9, 2008.
Section 564-B:4-410
564-B:4-410 Modification or Termination of Trust; Proceedings for Approval or Disapproval. –
(a) In addition to the methods of termination prescribed by RSA 564-B:4-411 through RSA 564-B:4-414, a trust terminates to the extent the trust is revoked or expires pursuant to its terms, no purpose of the trust remains to be achieved, or the purposes of the trust have become unlawful, contrary to public policy, or impossible to achieve.
(b) Any of the following persons may commence a judicial proceeding to approve or disapprove a proposed modification or termination under RSA 564-B:4-411 through RSA 564-B:4-416, a proposed trust combination under RSA 564-B:4-417(a), or a proposed trust division under RSA 564-B:4-417(b):
(1) A trustee;
(2) A trust advisor or trust protector to the extent that, under the terms of the trust, the trust advisor or trust protector has:
(A) The power to modify the terms of the trust;
(B) The power to terminate the trust;
(C) The power to commence a judicial proceeding to modify the terms of the trust;
(D) The power to commence a judicial proceeding to terminate the trust;
(E) The power to direct the modification of the terms of the trust;
(F) The power to direct the termination of the trust; or
(G) Any substantially similar power;
(3) A beneficiary; or
(4) To the extent that the trust is a charitable trust, the director of charitable trusts.
(c) A settlor of a charitable trust may commence a judicial proceeding to modify the trust under RSA 564-B:4-413, and in that proceeding, the director of charitable trusts shall be a necessary party.
(d) A modification or termination under RSA 564-B:4-410, RSA 564-B:4-411, RSA 564-B:4-412, RSA 564-B:4-413, RSA 564-B:4-415, or RSA 564-B:4-416 shall not violate any of the trust's material purposes.
Source. 2004, 130:1. 2005, 270:9, eff. Sept. 20, 2005. 2015, 272:60, eff. Oct. 1, 2015. 2017, 257:9, eff. Sept. 16, 2017.
Section 564-B:4-411
564-B:4-411 Modification or Termination of Noncharitable Irrevocable Trust by Consent. –
(a) A noncharitable irrevocable trust may be terminated upon consent of all of the beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust. A noncharitable irrevocable trust may be modified upon consent of all of the beneficiaries if the court concludes that modification is not inconsistent with a material purpose of the trust.
(b) Upon termination of a trust under subsection (a), the trustee shall distribute the trust property as agreed by the beneficiaries.
(c) If not all of the beneficiaries consent to a proposed modification or termination of the trust under subsection (a), the modification or termination may be approved by the court if the court is satisfied that:
(1) if all of the beneficiaries had consented, the trust could have been modified or terminated under this section; and
(2) the interests of a beneficiary who does not consent will be adequately protected.
Source. 2004, 130:1. 2005, 270:10, eff. Sept. 20, 2005.
Section 564-B:4-412
564-B:4-412 Modification or Termination Because of Unanticipated Circumstances or Inability to Administer Trust Effectively. –
(a) Upon petition by a trustee, the director of charitable trusts (in the case of a charitable trust) or an interested person other than the settlor, the court may modify the administrative or dispositive terms of a trust or terminate the trust if, because of circumstances not anticipated by the settlor, modification or termination will further the purposes of the trust. To the extent practicable, the modification must be made in accordance with the settlor's probable intention.
(b) The court may modify the administrative terms of a trust if continuation of the trust on its existing terms would be impracticable or wasteful or impair the trust's administration.
(c) Upon termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.
Source. 2004, 130:1. 2006, 320:54, eff. Aug. 19, 2006. 2017, 257:10, eff. July 18, 2017.
Section 564-B:4-413
564-B:4-413 Cy Pres. –
(a) Except as otherwise provided in subsection (b), if a particular charitable purpose becomes impossible, impracticable, illegal, obsolete, ineffective or prejudicial to the public interest to achieve:
(1) the trust does not fail, in whole or in part;
(2) the trust property does not revert to the settlor or the settlor's successors in interest; and
(3) upon petition by a trustee, the director of charitable trusts or an interested person other than the settlor, the court may apply cy pres to modify or terminate the trust by directing that the trust property be applied or distributed, in whole or in part, to a charitable purpose that is useful to the community and fulfills as nearly as possible the general charitable intent of the settlor.
(b) A provision in the terms of a charitable trust that would result in distribution of the trust property to a noncharitable beneficiary prevails over the power of the court under subsection (a) to apply cy pres to modify or terminate the trust only if, when the provision takes effect:
(1) the trust property is to revert to the settlor and the settlor is still living; or
(2) fewer than 21 years have elapsed since the date of the trust's creation.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2017, 257:11, eff. July 18, 2017.
Section 564-B:4-414
564-B:4-414 Modification or Termination of Uneconomic Trust. –
(a) After notice to the qualified beneficiaries, the trustee of a trust consisting of trust property having a total value less than $100,000 may terminate the trust if:
(1) The trustee concludes that the value of the trust property is insufficient to justify the cost of administration; and
(2) Within 30 days after the notice was sent to the qualified beneficiaries, a beneficiary does not notify the trustee of the beneficiary's objection to the trust's termination.
(b) The court may modify or terminate a trust or remove the trustee and appoint a different trustee if it determines that the value of the trust property is insufficient to justify the cost of administration.
(c) Upon termination of a trust under this section, the trustee shall distribute the trust property in a manner consistent with the purposes of the trust.
(d) This section does not apply to an easement for conservation or preservation or to a fund held or created by a town or other municipality under RSA 31:19 or RSA 31:19-a.
Source. 2004, 130:1. 2005, 270:11, eff. Sept. 20, 2005. 2017, 257:12, eff. Sept. 16, 2017.
Section 564-B:4-415
564-B:4-415 Reformation to Correct Mistakes. –
The court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor's intention if it is proved by clear and convincing evidence that both the settlor's intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:4-416
564-B:4-416 Modification to Achieve Settlor's Tax Objectives. –
To achieve the settlor's tax objectives, the court may modify the terms of a trust in a manner that is not contrary to the settlor's probable intention. The court may provide that the modification has retroactive effect.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:4-417
564-B:4-417 Combination and Division of Trusts. –
(a) After notice to the qualified beneficiaries, a trustee may combine 2 or more trusts into one trust if the result does not impair rights of any beneficiary or adversely affect achievement of the trust's purposes.
(1) Upon the combination of the trusts, the following shall apply:
(A) Each of the trusts other than the surviving trust shall terminate;
(B) The terms of the surviving trust shall govern the surviving trust and its property, including any property acquired from the other trusts that combined into the surviving trust;
(C) All title to real property and other property owned by each trust that combined into the surviving trust and all contractual rights possessed by each trust that combined into the surviving trust are vested in the surviving trust without reversion or impairment; and
(D) All liabilities of each trust that combined into the surviving trust are vested in the surviving trust.
(2) After the combination is effective, the name of the trustee of the surviving trust may be substituted in any pending proceeding for the name of the trustee of any trust that combined into the surviving trust.
(b) After notice to the qualified beneficiaries, a trustee may divide a trust into 2 or more separate trusts if the result does not impair rights of any beneficiary or adversely affect achievement of the trust's purposes.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2017, 257:13, eff. July 18, 2017.
Section 564-B:4-418
564-B:4-418 Trustee's Power to Decant Trust. –
(a) Subject to the limitations provided in this section, a trustee has the power to decant a trust. The power to decant is the power to appoint some or all of the trust property of a trust ("first trust") to another trust ("second trust"). A trustee's power to decant is a power with respect to an administrative matter of the trust.
(a-1)(1) For purposes of this section, "second trust" means: (A) an irrevocable trust already in existence, whether created by the settlor of the first trust or a different settlor; (B) a trust that is a complete restatement of the first trust, which may be created by the authorized fiduciary of the first trust or another person as the nominal grantor; (C) the first trust as modified to create the second trust; or (D) a new trust created by the authorized fiduciary or another person as the nominal settlor for the purpose of decanting.
(2) If a second trust is created by restating or modifying the first trust: (A) the second trust may, but need not, have the same name as the first trust; and (B) the second trust may, but need not, obtain a new taxpayer identification number. If no new taxpayer identification number is obtained, the second trust may continue to use the taxpayer identification number of the first trust.
(b)(1) The beneficiaries of the second trust may include only one or more of the beneficiaries of the first trust.
(2) The second trust may exclude one or more of the beneficiaries of the first trust.
(3) A person is not a beneficiary of the second trust solely by reason of being a permissible appointee of a power of appointment under the terms of the second trust.
(4) The current distributees and current permissible distributees of the second trust may include one or more persons who, under the terms of the first trust, are not current distributes or current permissible distributes, but would be distributees or permissible distributees upon the occurrence of a future date or event.
(c) Under the terms of the second trust, a person may have a power of appointment if (1) that person was a beneficiary of the first trust or (2) under the terms of the first trust, that person held a power of appointment either in a fiduciary or nonfiduciary capacity.
(d) Except as otherwise provided in this subsection, the terms of the second trust may provide that a trustee has discretion to distribute income or principal, and the terms of the second trust may impose a standard or no standard on the trustee's discretion regardless of whether the terms of the first trust imposed a standard on the trustee's discretion to distribute income or principal. If the first trust is a charitable trust and the terms of the first trust impose a standard on the trustee's discretion to distribute income or principal, then the terms of the second trust shall impose the same standard on the trustee's discretion to distribute income or principal, unless the director of charitable trusts expressly consents to the modification or elimination of that standard.
(e) The second trust may have a term that is longer than the first trust.
(f) A trustee may not decant to the extent that the terms of the second trust are inconsistent with a material purpose of the first trust.
(g)(1) A trustee may not decant to the extent that the terms of the second trust reduce or eliminate a vested interest of a beneficiary of the first trust.
(2) A vested interest is:
(A) a current right to a mandatory distribution of income or principal, a mandatory annuity interest, or a mandatory unitrust interest;
(B) a currently-exercisable power of withdrawal; or
(C) a noncontingent, unconditional right to receive an ascertainable portion of the trust property upon the trust's termination.
(3) In addition to other possible contingencies, a beneficiary's right to receive a portion of the trust property upon the trust's termination is contingent if, by reason of the trustee's discretionary power to make distributions or under other terms of the trust, any person other than the beneficiary or the beneficiary's estate could receive that portion unless the beneficiary survives a specified date or a specified event.
(h) If a transfer to the first trust qualified for a deduction, credit, exclusion, or exemption for purposes of any income, gift, estate, or generation-skipping transfer tax, then a trustee may decant only to the extent that the decanting would not jeopardize that deduction, credit, exclusion, or exemption.
(i) If a settlor of the first trust or a beneficiary of the first trust is an applicant for public benefits or receives public benefits and the settlor's or beneficiary's eligibility or qualification for those public benefits is dependent on the nature and scope of his or her rights, powers, and interests in the first trust, then a trustee may decant only to the extent that the decanting would not jeopardize the settlor's or beneficiary's eligibility or qualification for those public benefits.
(j) A trustee may not decant to the extent that, under the terms of the second trust:
(1) one or more beneficiaries can remove the trustee;
(2) those beneficiaries can appoint a successor trustee who, with respect to any of them, is a related or subordinate party within the meaning of section 672(c) of the Internal Revenue Code;
(3) the trustee may distribute trust property to any one or more of those beneficiaries; and
(4) the trustee's discretion to make those distributions is not limited by an ascertainable standard.
(k) A trustee who is a beneficiary of the first trust does not have the power to decant to the extent that, under the terms of the first trust:
(1) the trustee does not have the discretion to make or participate in making distributions to himself or herself unless the terms of the second trust impose the same limitation on that trustee's discretion;
(2) the trustee's discretion to make or participate in making distributions to himself or herself is limited by an ascertainable standard unless the terms of the second trust impose the same limitation on that trustee's discretion;
(3) the trustee's discretion to make or participate in making distributions to himself or herself is exercisable only with the consent of a cotrustee or a person holding an adverse interest, unless the terms of the second trust impose the same limitation on that trustee's discretion; or
(4) the trustee does not have the discretion to make or participate in making distributions in a manner that will discharge his or her legal support obligations, unless the terms of second trust impose the same limitation on that trustee's discretion.
(l) A trustee is not prohibited from decanting solely because:
(1) the first trust is irrevocable;
(2) the terms of the first trust provide that the trust may not be amended or modified;
(3) the first trust contains a spendthrift provision;
(4) under the terms of the first trust, the trustee does not have any discretion in making distributions of income or principal; or
(5) except as provided in subsection (d), the terms of the first trust impose a standard on the trustee's discretion to distribute income or principal.
(m) A trustee of a charitable trust or a trust in which a charitable organization has a vested interest shall notify the director of charitable trusts of a proposed decanting, and the trustee shall provide that notice in writing at least 30 days before the effective date of the decanting. A trustee of a noncharitable trust may notify a beneficiary of a proposed decanting, but does not have any duty to do so. The right of any beneficiary to object to a proposed decanting terminates if the beneficiary does not notify the trustee of an objection within 60 days after the proposal was sent to the beneficiary but only if the proposal informed the beneficiary of the right to object and the time allowed for objection.
(n) A trustee's power to decant may be expanded, restricted, eliminated, or otherwise altered by the terms of the trust. A nonjudicial settlement agreement made in accordance with RSA 564-B:1-111, however, may only restrict or eliminate a trustee's power to decant. Except as otherwise provided under the terms of the trust, a trustee's power to decant is in addition to any other powers conferred by the terms of the trust, this chapter, or the laws of this state. This section does not expand, restrict, eliminate, or otherwise alter any power that, with respect to a trust, a person holds in a nonfiduciary capacity.
(o) A trustee does not have a duty to decant or an ongoing duty to consider whether to decant. In exercising the power to decant, a trustee has a duty to exercise the power in a manner that is consistent with the settlor's intent as expressed in the terms of the trust, and the trustee shall act in accordance with the trustee's duties under this chapter and the terms of the first trust.
(p) A trustee may exercise the power to decant, without court approval, the consent of the settlor, or the consent of any of the beneficiaries of the first trust. A trustee or any other interested person may ask a court to approve a trustee's exercise of the power to decant.
(q) Upon a decanting in which all of the first trust's property is appointed to the second trust, the following shall apply:
(1) The first trust shall terminate;
(2) The terms of the second trust shall govern the second trust and its property, including any property acquired from the first trust;
(3) All title to real property and other property owned by the first trust and all contractual rights possessed by the first trust are vested in the second trust without reversion or impairment, subject to the provisions of paragraph (b); and
(4) All liabilities of the first trust are vested in the second trust.
(r) After a decanting in which all of the first trust's property is appointed to the second trust, the name of the trustee of the second trust may be substituted in any pending proceeding for the name of the trustee of the first trust.
Source. 2008, 374:9, eff. Sept. 9, 2008. 2014, 195:16, eff. July 1, 2014. 2015, 272:66, eff. Oct. 1, 2015. 2017, 257:14-16, eff. July 18, 2017. 2021, 103:2, 3, eff. Aug. 30, 2021.
Section 564-B:4-419
564-B:4-419 Trustee's Power of Modification. –
(a) Subject to the limitations provided in this section, a trustee may modify a trust. A trustee may exercise that power of modification for any reason, including:
(1) furthering the settlor's intent or a material purpose of the trust;
(2) preserving any favorable tax treatment for the trust, the settlor, or the beneficiaries;
(3) enhancing the efficient administration of the trust; or
(4) minimizing the costs of administration.
(b) A trustee's power under this section is a power with respect to an administrative matter of the trust.
(c) A trustee shall not modify a trust to that extent that:
(1) the terms of the trust expressly prohibit the trustee's modification of the trust;
(2) the modification is inconsistent with the settlor's intent or a material purpose of the trust;
(3) the modification expands, restricts, eliminates, or otherwise alters any right or power that the settlor has under this chapter or the terms of the trust;
(4) the modification adds a beneficiary, unless the modification is expressly permitted under the terms of the trust;
(5) the modification reduces or eliminates a beneficiary's vested interest in the trust;
(6) the modification reduces or eliminates a beneficiary's interest in the trust (other than a vested interest), unless the modification is consistent with the settlor's intent as clearly expressed under the terms of the trust;
(7) the modification adds a power of withdrawal or a power of appointment, unless the modification is consistent with the settlor's intent as clearly expressed under the terms of the trust;
(8) the modification reduces or eliminates a currently-exercisable power of appointment held by any person other than a beneficiary, unless the modification is consistent with the settlor's intent as clearly expressed under the terms of the trust; or
(9) the modification modifies any of the dispositive terms of a charitable trust, unless the director of charitable trusts consents to the modification.
(d) If the trust or a transfer to the trust qualified for a deduction, credit, exclusion, or exemption for purposes of any income, gift, estate, or other tax, then a trustee may modify a trust only to that extent that the modification would not jeopardize that deduction, credit, exclusion, or exemption.
(e) If a settlor of the trust or a beneficiary of the trust is an applicant for public benefits or receives public benefits and the settlor's or beneficiary's eligibility or qualification for those public benefits is dependent on the nature and scope of his or her rights, powers, and interests in the trust, then a trustee may modify the trust only to the extent that the modification would not jeopardize the settlor's or beneficiary's eligibility or qualification for those public benefits.
(f) A trustee does not have the power of modification under this section if the trustee is any of the following persons, either before or after the modification: (1) the settlor; (2) a beneficiary of the trust; (3) a person who, with respect to the settlor or a beneficiary of the trust, is a related or subordinate party within the meaning of section 672(c) of the Internal Revenue Code; or (4) a trustee whom any one or more of the settlor and the beneficiaries can remove if the persons exercising the removal power can appoint as a successor trustee (i) the settlor, (ii) a beneficiary of the trust, or (iii) a person who, with respect to the settlor or a beneficiary of the trust, is a related or subordinate party within the meaning of section 672(c) of the Internal Revenue Code.
(g) A trustee is not prohibited from exercising the power of modification, and the exercise of that power is not inconsistent with the settlor's intent, solely because:
(1) the trust is irrevocable;
(2) the terms of the trust provide that the trust may not be amended by the settlor; or
(3) the trust contains a spendthrift provision.
(h) A trustee of a charitable trust or a trust in which a charitable organization has a vested interest shall notify the director of charitable trusts of a proposed modification under this section, and the trustee shall provide that notice in writing at least 30 days before the effective date of that modification. A trustee of a noncharitable trust may notify a beneficiary of a proposed modification under this section, but does not have any duty to do so. The right of any beneficiary to object to a proposed modification terminates if the beneficiary does not notify the trustee of an objection within 60 days after the proposal was sent to the beneficiary but only if the proposal informed the beneficiary of the right to object and the time allowed for objection.
(i) A trustee's power of modification under this section may be expanded, restricted, eliminated, or otherwise altered by the terms of the trust. A nonjudicial settlement agreement made in accordance with RSA 564-B:1-111, however, may only restrict or eliminate a trustee's power of modification under this section. Except as otherwise provided under the terms of the trust, a trustee's power of modification under this section is in addition to any other powers conferred by the terms of the trust, this chapter, or the laws of this state. This section does not expand, restrict, eliminate, or otherwise alter any power that, with respect to a trust, a person holds in a nonfiduciary capacity.
(j) A trustee does not have a duty to modify a trust or an ongoing duty to consider whether to modify a trust. In exercising the power of modification under this section, a trustee has a duty to exercise the power in a manner that is consistent with the settlor's intent as expressed in the terms of the trust, and the trustee shall act in accordance with the trustee's duties under this chapter and the terms of the trust.
(k) A trustee may exercise the power of modification under this section without court approval, the consent of the settlor, or the consent of any of the beneficiaries of the trust. A trustee or any other interested person may ask a court to approve a trustee's exercise of the power of modification.
(l) For purposes of this section, "vested interest" means a vested interest as defined in RSA 564-B:4-418(g).
Source. 2014, 195:17, eff. July 1, 2014.
ARTICLE 5
CREDITOR'S CLAIMS; SPENDTHRIFT AND DISCRETIONARY TRUSTS
Section 564-B:5-501
564-B:5-501 Creditor's Claim Against a Beneficiary. –
(a) To the extent that a beneficiary's interest in a trust is not subject to a spendthrift provision, the court may authorize a creditor or assignee of the beneficiary to reach the beneficiary's interest by:
(1) Attachment of present or future distributions to or for the benefit of the beneficiary; or
(2) Subject to RSA 564-B:5-504, any other means.
(b) The court may limit the relief under subsection (a) as is appropriate under the circumstances.
(c) Subject to RSA 564-B:5-504(b) and (c), a creditor or assignee of a beneficiary may not compel the beneficiary to exercise any right or power that, in any fiduciary or nonfiduciary capacity, the beneficiary has under the terms of the trust, including any of the following:
(1) Any power of appointment;
(2) Any power to direct or veto a distribution;
(3) Any power to appoint or remove a trustee, trust advisor, or trust protector; or
(4) Any right to receive reports, notices, or other information concerning the trust and its administration.
Source. 2004, 130:1. 2005, 270:12, eff. Sept. 20, 2005. 2017, 257:17, eff. Sept. 16, 2017.
Section 564-B:5-502
564-B:5-502 Creditor's Claim Against a Beneficiary of a Trust Containing a Spendthrift Provision. –
(a) A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer of a beneficiary's interest.
(b) A term of a trust providing that the interest of a beneficiary is held subject to a "spendthrift trust," or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary's interest.
(c) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision.
(d) To the extent that a beneficiary's interest in a trust is subject to a spendthrift provision, a creditor or assignee of the beneficiary may not reach:
(1) The beneficiary's interest in the trust; or
(2) A distribution from the trust before its receipt by the beneficiary.
(e) To the extent that a beneficiary's interest in a trust is subject to a spendthrift provision, the beneficiary's interest:
(1) Is not property for purposes of RSA 458:16-a, I; and
(2) Shall not be subject to any forced heirship, legitime, forced share, or any similar heirship rights under the laws of any jurisdiction.
(f) To the extent that a beneficiary's interest in a trust is subject to a spendthrift provision, a court may authorize an exception creditor of the beneficiary to attach present or future distributions to or for the benefit of the beneficiary.
(1) For purposes of this subsection (f), the following definitions shall apply:
(A) "Exception creditor" means, with respect to a beneficiary:
(i) An individual to the extent that there is a judgment or court order against the beneficiary for child support in this or any other state;
(ii) A spouse or former spouse to the extent that there is a judgment or court order against the beneficiary for basic alimony;
(iii) A judgment creditor who has provided services for the protection of a beneficiary's interest in the trust; or
(iv) This state or the United States for a claim against the beneficiary to the extent that a statute of this state or federal law so provides.
(B) "Basic alimony" means the portion of alimony attributable to the most basic food, shelter, and medical needs of the spouse or former spouse if the judgment or court order expressly specifies that portion.
(2) Attachment of present or future distributions is the exception creditor's exclusive remedy against the beneficiary's interest in the trust.
(3) The court may limit the relief as is appropriate under the circumstances.
(4) Subsection (d)(2) shall not apply to an exception creditor.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2017, 257:18, eff. Sept. 16, 2017.
Section 564-B:5-503
564-B:5-503 Repealed by 2017, 257:59, II, eff. Sept. 16, 2017. –
Section 564-B:5-504
564-B:5-504 Creditor's Claim Against a Beneficiary of a Discretionary Trust. –
(a) Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may not compel a distribution that is subject to the trustee's discretion, even if:
(1) The discretion is expressed in the form of a standard of distribution; or
(2) The trustee has abused the discretion.
(b) Subject to subsection (c), a creditor or assignee of a beneficiary may not compel a distribution to the beneficiary solely by reason that the beneficiary:
(1) Is a trustee; or
(2) In any fiduciary capacity, has the power to direct distributions.
(c) Upon petition by a creditor or assignee of a beneficiary, a court may compel a distribution to the beneficiary to the extent that:
(1) The beneficiary:
(A) Is a trustee; or
(B) In any fiduciary capacity, has the power to direct distributions;
(2) In the capacity described in subsection (c)(1), the beneficiary has:
(A) The discretionary power to make distributions to himself, herself, or itself; or
(B) The discretionary power to direct distributions to himself, herself, or itself;
(3) The discretion is expressed in the form of a standard of distribution;
(4) The beneficiary can exercise the power without the consent of any trustee, trust advisor, trust protector, or person holding an adverse interest; and
(5) The beneficiary has abused the discretion.
(d) This section does not limit the right of a beneficiary to commence a judicial proceeding against a trustee, trust advisor, or trust protector for:
(1) An abuse of discretion; or
(2) A failure to comply with a standard for distribution.
(e)(1) Upon petition by an exception creditor of a beneficiary, a court may compel a distribution to the beneficiary to the extent that the trustee:
(A) Has abused a discretion; or
(B) Has failed to comply with a standard of distribution.
(2) For purposes of this subsection, the following definitions apply:
(A) "Exception creditor" means, with respect to a beneficiary:
(i) An individual to the extent that there is a judgment or court order against the beneficiary for child support in this or any other state; or
(ii) A spouse or former spouse to the extent that there is a judgment or court order against the beneficiary for basic alimony.
(B) "Basic alimony" means the portion of alimony attributable to the most basic food, shelter, and medical needs of the spouse or former spouse if the judgment or court order expressly specifies that portion.
(3) In compelling a distribution under this subsection, the court shall direct the trustee to pay to the exception creditor an amount that is equitable under the circumstances, but not more than the lesser of:
(A) The amount that is necessary to satisfy the judgment or court order for:
(i) In the case of an exception creditor described in subsection (e)(2)(A)(i), child support; or
(ii) In the case of an exception creditor described in subsection (e)(2)(A)(ii), basic alimony; and
(B) The maximum amount of trust property that can be distributed to or for the benefit of the beneficiary from the trust.
(4) Subsection (a) shall not apply to an exception creditor.
Source. 2004, 130:1. 2005, 270:14. 2006, 320:55, 56, eff. Aug. 19, 2006. 2017, 257:19, eff. Sept. 16, 2017. 2019, 230:2, eff. July 12, 2019.
Section 564-B:5-505
564-B:5-505 Creditor's Claim Against a Settlor of a Revocable Trust. –
(a) During the settlor's life, the property of a revocable trust is subject to claims of the settlor's creditors regardless of whether the trust contains a spendthrift provision.
(b) After the settlor's death and subject to the settlor's right to direct the source from which liabilities will be paid, the property of a trust that was revocable immediately before the settlor's death is subject to the following claims to the extent that the settlor's probate estate is inadequate to satisfy those claims:
(1) Claims of the settlor's creditors;
(2) Costs of administration of the settlor's estate; and
(3) Expenses of the settlor's funeral and disposal of remains.
(c) Subsection (b) shall apply to a trust regardless of whether the trust contains a spendthrift provision.
(d) Subsection (b) shall not apply to:
(1) The proceeds and any other benefits of a policy of life or endowment insurance effected by a settlor, a trustee, or any other person on the settlor's life or another individual's life as provided in RSA 408:6; or
(2) Any claim barred under RSA 564-B:5-508.
(e) During only the period that the power of withdrawal may be exercised, the holder of a power of withdrawal shall be treated in the same manner under this section as the settlor of a revocable trust to the extent of the property subject to the power of withdrawal.
Source. 2004, 130:1. 2005, 270:15, eff. Sept. 20, 2005. 2008, 374:10-12, eff. Sept. 9, 2008. 2014, 195:18-20, eff. July 1, 2014. 2017, 257:20, eff. Sept. 16, 2017. 2022, 144:2, eff. Jan. 1, 2023.
Section 564-B:5-505A
564-B:5-505A Creditor's Claim Against a Settlor of an Irrevocable Trust. –
(a) To the extent that a settlor's interest in an irrevocable trust is not subject to a spendthrift provision, a creditor or assignee of the settlor may reach the maximum amount of trust property that can be distributed to or for the benefit of the settlor.
(b) If the trust has more than one settlor, then the amount that a creditor or assignee of a particular settlor may reach under subsection (a) may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution.
(c) A settlor may not transfer the settlor's interest in an irrevocable trust in violation of a spendthrift provision.
(d) To the extent that a settlor's interest in an irrevocable trust is subject to a spendthrift provision, a creditor or assignee of the settlor may not reach:
(1) The settlor's interest in the trust; or
(2) A distribution from the trust before its receipt by the settlor.
(e) Subsection (d) shall apply to any type of irrevocable trust, including:
(1) A charitable remainder annuity trust within the meaning of section 664(d)(1) of the Internal Revenue Code;
(2) A charitable remainder unitrust within the meaning of section 664(d)(2) of the Internal Revenue Code;
(3) A trust described in section 2523(e) of the Internal Revenue Code;
(4) A trust described in section 2523(f) of the Internal Revenue Code;
(5) An irrevocable special needs trust established for a disabled person as described in 42 U.S.C. section 1396p(d)(4) or similar federal law governing the transfer to such a trust;
(6) A trust in which a trustee, trust advisor, or trust protector has a duty or a discretionary power to:
(A) Pay directly to any taxing authority any tax that is:
(i) Imposed on the trust's income or principal; and
(ii) Payable by the settlor under the law imposing the tax;
(B) Reimburse the settlor for any tax described in subsection (g)(6)(A); or
(C) Direct a trustee, trust advisor, or trust protector to take the action described in subsection (e)(6)(A) or (e)(6)(B); and
(7) A trust in which the settlor has:
(A) The power to reacquire trust property by substituting other property of an equivalent value; or
(B) Any power of administration within the meaning of section 675(4) of the Internal Revenue Code.
(f) Notwithstanding RSA 545-A:9, a creditor or assignee of a settlor may not commence a judicial proceeding with respect to the settlor's transfer of property to an irrevocable trust that contains a spendthrift provision after the later of:
(1) Four years after the transfer is made; or
(2) If the creditor or assignee is a creditor or assignee of the settlor when the transfer is made, one year after the creditor or assignee discovers or reasonably should have discovered the transfer.
(g) For purposes of subsection (f) and RSA 545-A:4, a creditor or assignee of a settlor shall prove that, with respect to the creditor or assignee, the settlor's transfer to the trust was fraudulent.
(h) Notwithstanding any law to the contrary, a person shall not have any claim against any of the following persons to the extent that the claim is based in any way on a settlor or other person availing or seeking to avail himself, herself, or itself of the benefits of this section:
(1) A trustee;
(2) A trust advisor;
(3) A trust protector;
(4) A person who advised a settlor, trustee, trust advisor, or trust protector concerning trust, the trust's formation, any transfer of property to the trust, or the application of this section; or
(5) A person who was involved in counseling, drafting, preparing, or executing:
(A) With respect to the trust, a trust instrument; or
(B) A governing instrument of a corporation, partnership, limited partnership, limited liability company, or other entity, the interests of which a settlor transferred to the trust.
(i) Notwithstanding any law to the contrary, a person may not commence a judicial proceeding seeking the enforcement of a judgment entered by a court or other body having adjudicative authority or asserting any other claim if:
(1) The judgment or claim is based in any way on a settlor's transfer of property to an irrevocable trust that contains a spendthrift provision; and
(2) With respect to the transfer, a claim of the creditor or assignee of the settlor would be barred under subsection (f).
(j) Subsections (h) and (i) shall not affect:
(1) Any claim by a settlor;
(2) Any claim by a beneficiary against a current or former trustee, trust advisor, or trust protector for a breach of trust; or
(3) Any claim by a trustee, trust advisor, or trust protector.
(k) If 2 or more transfers of property are made to a trust that contains a spendthrift provision, then the following shall apply:
(1) For the purpose of determining whether, under this section, a creditor or other person may commence a judicial proceeding with respect to a specific transfer, any subsequent transfer shall be disregarded; and
(2) Any distribution from a trust to a settlor or other beneficiary shall be deemed to have been made from:
(A) First, the most recent transfer to the extent of the previously undistributed portion of that transfer; and
(B) Subsequently, each preceding transfer in reverse chronological order to the extent of the previously undistributed portion of that transfer.
(l) A creditor or assignee of a settlor may not compel the settlor to exercise any right or power that, in any fiduciary or nonfiduciary capacity, the settlor has under the terms of the trust, including:
(1) Any power of appointment;
(2) Any power to direct or veto a distribution;
(3) Any power to reacquire trust property by substituting other property of an equivalent value;
(4) Any power of administration within the meaning of section 675(4) of the Internal Revenue Code;
(5) Any power to appoint or remove a trustee, trust advisor, or trust protector; or
(6) Any right to receive reports, notices, or other information concerning the trust and its administration.
(m) This section shall not affect the application of:
(1) In the case of a trust that was revocable immediately before the settlor's death, RSA 564-B:5-505(b);
(2) RSA 564-B:5-505(e); or
(3) Except as otherwise provided in this section, RSA 545-A or a similar law of another state having jurisdiction over a transfer of property.
(n) To the extent that a settlor's interest in an irrevocable trust is subject to a spendthrift provision, the settlor's interest:
(1) Is not property for purposes of RSA 458:16-a, I, to the extent that:
(A) The settlor's interest is subject to a spendthrift provision; and
(B) The settlor transferred the property to the trust more than 30 days before his or her marriage to the individual seeking to claim that the settlor's interest is property for purposes of RSA 458:16-a, I, unless that individual expressly consented to the transfer; and
(2) Shall not be subject to any forced heirship, legitime, forced share, or any similar heirship rights under the laws of any jurisdiction.
(o) A spendthrift provision is unenforceable against a claim of this state or the United States to the extent that a statute of this state or federal law so provides.
(p) A spendthrift provision is a restriction on the transfer of the settlor's beneficial interest that is enforceable under nonbankruptcy law within the meaning of 11 U.S.C. section 541(c)(2).
(q) Whether or not an irrevocable trust contains a spendthrift provision, an exception creditor of the settlor may reach the trust property to the extent permitted under subsection (q)(2).
(1) For purposes of this subsection, the following definitions apply:
(A) "Exception creditor" means, with respect to a settlor:
(i) An individual to the extent that there is a judgment or court order against the settlor for child support in this or any other state; or
(ii) A spouse or former spouse to the extent that there is a judgment or court order against the settlor for basic alimony.
(B) "Basic alimony" means the portion of alimony attributable to the most basic food, shelter, and medical needs of the spouse or former spouse if the judgment or court order expressly specifies that portion.
(2) The court shall direct the trustee to pay to the exception creditor an amount that is equitable under the circumstances, but not more than the lesser of:
(A) The amount that is necessary to satisfy the judgment or court order for:
(i) In the case of an exception creditor described in subsection (q)(1)(A)(i), child support; or
(ii) In the case of an exception creditor described in subsection (q)(1)(A)(ii), basic alimony; and
(B) The maximum amount of trust property that can be distributed to or for the benefit of the settlor from the trust.
(3) This subsection shall not apply to any irrevocable trust described in subsection (e)(1), (e)(2), (e)(3), (e)(4), or (e)(5).
(4) Subject to subsection (q)(2), subsections (a) and (f) shall not apply to an exception creditor.
Source. 2017, 257:21, eff. Sept. 16, 2017.
Section 564-B:5-505B
564-B:5-505B Coordination with Qualified Dispositions in Trusts. –
(a) On the effective date of RSA 564-B:5-505A, RSA 564-B:5-505A shall apply to:
(1) Any transfer that:
(A) Was made before the effective date of RSA 564-B:5-505A; and
(B) Qualified as a qualified disposition within the meaning of RSA 564-D:1, VII, as in effect immediately before the effective date of RSA 564-B:5-505A; and
(2) Any trust into which, before the effective date of RSA 564-B:5-505A, there was a transfer described in subsection (a)(1).
(b) Except as otherwise permitted under RSA 564-B:5-505A, a creditor or assignee of a settlor may not avoid a transfer described in subsection (a)(1) if the creditor or assignee could not have avoided the transfer under RSA 564-D as in effect immediately before the effective date of RSA 564-B:5-505A.
(c) Except as otherwise permitted under RSA 564-B:5-505A, a creditor or assignee of a settlor may not reach any property of a trust described in subsection (a)(2) if the creditor or assignee could not have reached the property under RSA 564-D as in effect immediately before the effective date of RSA 564-B:5-505A.
Source. 2017, 257:21, eff. Sept. 16, 2017.
Section 564-B:5-506
564-B:5-506 Overdue Distribution. –
(a) In this section, "mandatory distribution" means a distribution of income or principal that the trustee is required to make to a beneficiary under the terms of the trust, including a distribution upon termination of the trust. The term excludes a distribution subject to the exercise of the trustee's discretion regardless of whether the terms of the trust (i) include a support or other standard to guide the trustee in making distribution decisions or (ii) provide that the trustee "may" or "shall" make discretionary distributions, including distributions pursuant to a support or other standard.
(b) Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution upon termination of the trust, if the trustee has not made the distribution to the beneficiary within a reasonable time after the designated distribution date.
Source. 2004, 130:1. 2005, 270:16, eff. Sept. 20, 2005.
Section 564-B:5-507
564-B:5-507 Personal Obligations of Trustee. –
Trust property is not subject to personal obligations of the trustee, even if the trustee becomes insolvent or bankrupt.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:5-508
564-B:5-508 Disposition of Claims Against the Settlor. –
(a) Upon the death of a settlor of a trust, a trustee may dispose of a known claim against the settlor if the trustee sends to the claimant a notice described in subsection (c). For purposes of this section, a "known claim" is an actual or potential claim of which the trustee has knowledge, but excludes a contingent liability or a claim based on an event occurring after the date of the settlor's death.
(b) Upon the death of a settlor of a trust, a trustee may dispose of any unknown claims against the settlor if the trustee publishes a notice described in subsection (c). The notice shall be published once in a newspaper of general circulation in the county in which, at the time of his or her death, the settlor was domiciled. For purposes of this section, an unknown claim is a claim that is not a known claim, but excludes a contingent liability or a claim based on an event occurring after the date of the settlor's death.
(c) For purposes of subsections (a) and (b), the notice shall contain the following information and statements:
(1) The notice shall state that the settlor has died. The notice shall provide the trustee's name and mailing address, and the notice shall provide the settlor's name, the settlor's place of domicile at the time of his or her death, and the settlor's date of death.
(2) In the case of a notice under subsection (a), the notice shall state that any claim against the settlor will be barred unless a proceeding to enforce the claim is commenced within one year after the date on which the trustee sent the notice.
(3) In the case of a notice under subsection (b), the notice shall state that any claim against the settlor will be barred unless a proceeding to enforce the claim is commenced within one year after the publication date of the notice.
(d) If a trustee sends a notice in accordance with subsection (a), then a known claim against the settlor shall be barred unless the claimant commences a proceeding to enforce the claim within one year after the date on which the trustee sent the notice. If a trustee publishes a notice in accordance with subsection (b), then an unknown claim against the settlor shall be barred unless the claimant commences a proceeding to enforce the claim within one year after the publication date of the notice. The trustee and a claimant may agree to toll the limitation period under this subsection.
(e) To the extent that the trustee acts in good faith, the trustee is not liable to any person for exercising the discretion to dispose of claims under this section or not exercising that discretion.
(f) This section shall not bar any claim that the director of charitable trusts or the department of health and human services has the authority to enforce.
Source. 2014, 195:21, eff. July 1, 2014.
Section 564-B:5-509
564-B:5-509 Disposition of Claims Against a Trust. –
(a) Upon the termination of an irrevocable trust, a trustee may dispose of a known claim against the trust if the trustee sends to the claimant a notice described in subsection (c). For purposes of this section, a known claim is an actual or potential claim of which the trustee has knowledge, but excludes a contingent liability or a claim based on an event occurring after the date of the trust's termination.
(b) Upon the termination of an irrevocable trust, a trustee may dispose of any unknown claims against the trust if the trustee publishes a notice described in subsection (c). The notice shall be published once in a newspaper of general circulation in the county in which the trust's principal place of administration is located. For purposes of this section, an unknown claim is a claim that is not a known claim, but excludes a contingent liability or a claim based on an event occurring after the date of the trust's termination.
(c) For purposes of subsections (a) and (b), the notice shall contain the following information and statements:
(1) The notice shall state that the trust has terminated. The notice shall provide the trustee's name and mailing address, and the notice shall reasonably identify the trust.
(2) In the case of a notice under subsection (a), the notice shall state that any claim against the trust will be barred unless a proceeding to enforce the claim is commenced within one year after the date on which the trustee sent the notice.
(3) In the case of a notice under subsection (b), the notice shall state that any claim against the trust will be barred unless a proceeding to enforce the claim is commenced within one year after the publication date of the notice.
(d) If a trustee sends a notice in accordance with subsection (a), then a known claim against the trust shall be barred unless the claimant commences a proceeding to enforce the claim within one year after the date on which the trustee sent the notice. If a trustee publishes a notice in accordance with subsection (b), then an unknown claim against the trust shall be barred unless the claimant commences a proceeding to enforce the claim within one year after the publication date of the notice. The trustee and a claimant may agree to toll the limitation period under this subsection (d).
(e) A claim against the trust does not include:
(1) any claim against a trustee, trust advisor, or trust protector by a beneficiary, trustee, trust advisor, or trust protector for a breach of trust; or
(2) any claim against a trustee, trust advisor, or trust protector under RSA 564-B:10-1003(a).
(f) To the extent that the trustee acts in good faith, the trustee is not liable to any person for exercising the discretion to dispose of claims under this section or not exercising that discretion.
(g) This section shall not bar any claim that the director of charitable trusts or the department of health and human services has the authority to enforce.
Source. 2014, 195:21, eff. July 1, 2014.
Section 564-B:5-510
564-B:5-510 Limitation on Personal Liability of Beneficiaries. –
(a) A beneficiary is not personally liable on a contract into which a trustee, trust advisor, or trust protector properly enters in the course of administering the trust, unless the beneficiary expressly agrees to be personally liable on that contract.
(b) A beneficiary is not personally liable for torts committed by a trustee, trust advisor, or trust protector in the course of administering the trust, unless the beneficiary is personally at fault.
(c) A beneficiary is not personally liable for claims or obligations arising from the ownership or control of trust property by a trustee, trust advisor, or trust protector, unless the beneficiary is personally at fault. Claims arising from the ownership or control of trust property include liability for any violation of environmental law.
(d) This section does not apply to a revocable trust to the extent that the beneficiary is the settlor of that trust.
(e) This section does not limit or otherwise affect a beneficiary's liability to return a distribution under the terms of the trust, the beneficiary's agreement with a trustee, or RSA 564-B:4-406(f), RSA 564-B:8-812, RSA 564-B:8-817(d), or any other provision of this chapter.
Source. 2014, 195:21, eff. July 1, 2014.
Section 564-B:5-511
564-B:5-511 Limitation on Personal Liability of Settlors. –
(a) A settlor of an irrevocable trust is not personally liable on a contract into which a trustee, trust advisor, or trust protector properly enters in the course of administering the trust, unless the settlor expressly agrees to be personally liable on that contract.
(b) A settlor of an irrevocable trust is not personally liable for torts committed by a trustee, trust advisor, or trust protector in the course of administering the trust, unless the settlor is personally at fault.
(c) A settlor of an irrevocable trust is not personally liable for claims or obligations arising from the ownership or control of trust property by a trustee, trust advisor, or trust protector, unless the settlor is personally at fault. Claims arising from the ownership or control of trust property include liability for any violation of environmental law.
(d) This section does not limit or otherwise affect:
(1) A settlor's obligations under an agreement with a trustee, trust advisor, or trust protector;
(2) The rights of a settlor's creditor under this chapter; or
(3) The application of RSA 564-B:4-406(f), RSA 564-B:8-812, RSA 564-B:8-817(d), or any other provision of this chapter.
Source. 2019, 230:4, eff. Sept. 10, 2019.
ARTICLE 6
REVOCABLE TRUSTS
Section 564-B:6-601
564-B:6-601 Capacity of Settlor of Revocable Trust. –
The capacity required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:6-602
564-B:6-602 Revocation or Amendment of Revocable Trust. –
(a) Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may revoke or amend the trust. This subsection does not apply to a trust created under an instrument executed before the effective date of this chapter.
(b) If a revocable trust is created or funded by more than one settlor:
(1) to the extent the trust consists of community property, the trust may be revoked by either spouse acting alone but may be amended only by joint action of both spouses; and
(2) to the extent the trust consists of property other than community property, each settlor may revoke or amend the trust with regard to the portion of the trust property attributable to that settlor's contribution; and
(3) upon the revocation or amendment of the trust by fewer than all of the settlors, the trustee shall promptly notify the other settlors of the revocation or amendment.
(c) The settlor may revoke or amend a revocable trust:
(1) by substantial compliance with a method provided in the terms of the trust; or
(2) by any other method manifesting clear and convincing evidence of the settlor's intent if the terms of the trust do not provide a method or do not expressly prohibit methods other than methods provided in the terms of the trust.
(d) Upon revocation of a revocable trust, the trustee shall deliver the trust property as the settlor directs.
(e) A settlor's powers with respect to the revocation of a revocable trust, the amendment of a revocable trust, or the distribution of trust property from a revocable trust may be exercised by an agent under a power of attorney only to the extent expressly authorized by both the terms of the trust and the power of attorney.
(1) Any revocation or amendment of a revocable trust by an agent under a power of attorney shall be effective only if:
(A) The amendment or revocation is made in substantial compliance with a method provided in the terms of the trust; or
(B) The amendment or revocation is made by any other method manifesting clear and convincing evidence of the agent's intent if the terms of the trust do not provide a method or do not expressly prohibit methods other than methods provided in the terms of the trust.
(2) Any revocation or amendment of a revocable trust by an agent under a power of attorney shall be effective only upon the trustee's receipt of notice of the amendment or revocation.
(3) A trustee, trust advisor, or trust protector is an excluded fiduciary to the extent that:
(A) In accordance with this subsection, a settlor's agent exercises the settlor's powers with respect to the revocation of a revocable trust, the amendment of a revocable trust, or the distribution of trust property from a revocable trust; and
(B) The trustee, trust advisor, or trust protector acts in accordance with the agent's exercise of the settlor's powers.
(f) A conservator of the settlor or a guardian of the estate of the settlor, or, if no guardian of the estate has been appointed, a guardian of the person of the settlor may exercise a settlor's powers with respect to revocation, amendment, or distribution of trust property only with the approval of the court supervising the conservatorship or guardianship.
(g) A trustee who does not know that a trust has been revoked or amended is not liable to the settlor or settlor's successors in interest for distributions made and other actions taken on the assumption that the trust had not been amended or revoked.
Source. 2004, 130:1. 2005, 270:17, 18, eff. Sept. 20, 2005. 2017, 257:22, eff. Sept. 16, 2017.
Section 564-B:6-603
564-B:6-603 Settlor's Powers; Powers of Withdrawal. –
(a) While a trust is revocable and the settlor has capacity to revoke the trust, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.
(b) During the period the power may be exercised, the holder of a power of withdrawal has the rights of a settlor of a revocable trust under this section to the extent of the property subject to the power.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:6-604
564-B:6-604 Limitation on Action Contesting Validity of Revocable Trust; Distribution of Trust Property. –
If a trust was revocable at the settlor's death, then a person may commence a judicial proceeding to contest the validity of that trust in accordance with RSA 564-B:4-406, and the trustee may proceed to distribute the trust property in accordance with RSA 564-B:4-406.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:22, eff. July 1, 2014.
ARTICLE 7
OFFICE OF TRUSTEE
Section 564-B:7-701
564-B:7-701 Accepting or Declining Trusteeship. –
(a) Except as otherwise provided in subsection (c), a person designated as trustee accepts the trusteeship:
(1) by substantially complying with a method of acceptance provided in the terms of the trust; or
(2) if the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.
(b) A person designated as trustee who has not yet accepted the trusteeship may reject the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable time after knowing of the designation is deemed to have rejected the trusteeship.
(c) A person designated as trustee, without accepting the trusteeship, may:
(1) act to preserve the trust property if, within a reasonable time after acting, the person sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to a qualified beneficiary; and
(2) inspect or investigate trust property to determine potential liability under environmental or other law or for any other purpose.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:7-702
564-B:7-702 Trustee's Bond. –
(a) A trustee shall give bond to secure performance of the trustee's duties only if the court finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms of the trust and the court has not dispensed with the requirement.
(b) The court may specify the amount of a bond, its liabilities, and whether sureties are necessary. The court may modify or terminate a bond at any time.
(c) The following entities need not give bond, even if required by the terms of the trust:
(1) Any trust company, bank, or savings association incorporated under the laws of this state, or any national bank or federally chartered savings association duly authorized and located within this state; and
(2) Any bank as defined in RSA 383-A:2-201(a)(3), if that bank is permitted to conduct a trust business, as defined in RSA 383-A:2-201(a)(51), in this state.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2015, 272:50, eff. Oct. 1, 2015.
Section 564-B:7-703
564-B:7-703 Cotrustees. –
(a) Cotrustees who are unable to reach a unanimous decision may act by majority decision.
(b) If a vacancy occurs in a cotrusteeship, the remaining cotrustees may act for the trust.
(c) A cotrustee must participate in the performance of a trustee's function unless the cotrustee is unavailable to perform the function because of absence, illness, disqualification under other law, or other temporary incapacity or the cotrustee has properly delegated the performance of the function to another trustee.
(d) If a cotrustee is unavailable to perform duties because of absence, illness, disqualification under other law, or other temporary incapacity, and prompt action is necessary to achieve the purposes of the trust or to avoid injury to the trust property, the remaining cotrustee or a majority of the remaining cotrustees may act for the trust.
(e) A trustee may not delegate to a cotrustee the performance of a function the settlor reasonably expected the trustees to perform jointly. Unless a delegation was irrevocable, a trustee may revoke a delegation previously made.
(f) Except as otherwise provided in subsection (g), a trustee who does not join in an action of another trustee is not liable for the action.
(g) Each trustee shall exercise reasonable care to:
(1) prevent a cotrustee from committing a serious breach of trust; and
(2) compel a cotrustee to redress a serious breach of trust.
(h) A dissenting trustee who joins in an action at the direction of the majority of the trustees and who notified any cotrustee of the dissent at or before the time of the action is not liable for the action unless the action is a serious breach of trust.
(i) A trustee shall keep each cotrustee and any other fiduciary designated by the terms of the trust reasonably informed about the administration of the trust, to the extent the trustee has knowledge that the other cotrustee or other fiduciary designated by the terms of the trust does not have of the trustee's actions, or regarding other material information (or the availability of such information) related to the administration of the trust that would be reasonably necessary for the cotrustee or other fiduciary designated by the terms of the trust to perform his or her duties as a trustee or other fiduciary of the trust.
Source. 2004, 130:1. 2006, 320:57, eff. Aug. 19, 2006.
Section 564-B:7-704
564-B:7-704 Vacancy in Trusteeship; Appointment of Successor. –
(a) A vacancy in a trusteeship occurs if:
(1) a person designated as trustee rejects the trusteeship;
(2) a person designated as trustee cannot be identified or does not exist;
(3) a trustee resigns;
(4) a trustee is disqualified or removed;
(5) a trustee dies; or
(6) a guardian of the estate or guardian of the person or conservator is appointed for an individual serving as trustee.
(b) If one or more cotrustees remain in office, a vacancy in a trusteeship need not be filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.
(c) A vacancy in a trusteeship of a noncharitable trust that is required to be filled must be filled in the following order of priority:
(1) by a person designated in the terms of the trust to act as successor trustee;
(2) by a person appointed by unanimous agreement of the qualified beneficiaries; or
(3) by a person appointed by the court.
(d) A vacancy in a trusteeship of a charitable trust that is required to be filled must be filled in the following order of priority:
(1) by a person designated in the terms of the trust to act as successor trustee;
(2) by a person selected by the charitable organizations expressly designated to receive distributions under the terms of the trust if the director of charitable trusts concurs in the selection; or
(3) by a person appointed by the court.
(e) Whether or not a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee or special fiduciary whenever the court considers the appointment necessary for the administration of the trust.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:7-705
564-B:7-705 Resignation of Trustee. –
(a) A trustee may resign:
(1) upon at least 30 days' notice to the qualified beneficiaries, the settlor, if living, and all cotrustees; or
(2) with the approval of the court.
(b) In approving a resignation, the court may issue orders and impose conditions reasonably necessary for the protection of the trust property.
(c) Any liability of a resigning trustee or of any sureties on the trustee's bond for acts or omissions of the trustee is not discharged or affected by the trustee's resignation.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:7-706
564-B:7-706 Removal of Trustee. –
(a) The settlor, a cotrustee, or a beneficiary may request the court to remove a trustee, or a trustee may be removed by the court on its own initiative.
(b) In addition to the power to remove a trustee pursuant to RSA 564:9, the court may remove a trustee if:
(1) the trustee has committed a serious breach of trust;
(2) lack of cooperation among cotrustees substantially impairs the administration of the trust;
(3) because of unfitness, unwillingness, persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or
(4) there has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries, the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust, and a suitable cotrustee or successor trustee is available.
(c) Pending a final decision on a request to remove a trustee, or in lieu of or in addition to removing a trustee, the court may order such appropriate relief under RSA 564-B:10-1001(b) as may be necessary to protect the trust property or the interests of the beneficiaries.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:7-707
564-B:7-707 Delivery of Property by Former Trustee –
(a) Unless a cotrustee remains in office or the court otherwise orders, and until the trust property is delivered to a successor trustee or other person entitled to it, a trustee who has resigned or been removed has the duties of a trustee and the powers necessary to protect the trust property.
(b) A trustee who has resigned or been removed shall proceed expeditiously to deliver the trust property within the trustee's possession to the cotrustee, successor trustee, or other person entitled to it.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:7-708
564-B:7-708 Compensation of Trustee. –
(a) If the terms of a trust do not specify the trustee's, trust advisor's, or trust protector's compensation, each such fiduciary is entitled to compensation that is reasonable under the circumstances.
(b) If the terms of a trust specify the trustee's, trust advisor's, or trust protector's compensation, each such fiduciary is entitled to be compensated as specified, but the court may allow more or less compensation if:
(1) the duties of the trustee, trust advisor, or trust protector are substantially different from those contemplated when the trust was created; or
(2) the compensation specified by the terms of the trust would be unreasonably low or high.
Source. 2004, 130:1. 2006, 320:58, eff. Aug. 19, 2006.
Section 564-B:7-709
564-B:7-709 Reimbursement of Expenses. –
(a) A trustee, trust advisor, or trust protector is entitled to be reimbursed out of the trust property, with interest as appropriate, for:
(1) expenses that were properly incurred in the administration of the trust; and
(2) to the extent necessary to prevent unjust enrichment of the trust, expenses that were not properly incurred in the administration of the trust.
(b) An advance by the trustee, trust advisor, or trust protector of money for the protection of the trust gives rise to a lien against trust property to secure reimbursement with reasonable interest.
Source. 2004, 130:1. 2006, 320:59, eff. Aug. 19, 2006.
Section 564-B:7-710
564-B:7-710 Coordination with RSA 564. –
Nothing in this article is intended to modify or limit the provisions of RSA 564 as they apply to testamentary trusts. To the extent the provisions of this article conflict with the provisions of RSA 564 as they apply to testamentary trusts, the provisions of RSA 564 shall control.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:7-711
564-B:7-711 Divided Trusts and Directed Trusts. –
(a) A divided trust is a trust in which the terms of the trust divide powers and duties among 2 or more trustees, trust advisors, and trust protectors, vesting one or more powers and duties exclusively in one or more of those persons to the exclusion of the other persons.
(b) A directed trust is trust in which, under the terms of the trust, one or more persons have the power to direct an action by a trustee, trust advisor, or trust protector or the power to veto or consent to any actual or proposed action by a trustee, trust advisor, or trust protector. The action may relate to the investment of trust assets, distributions, or any other aspects of the trust's administration.
(c) A trustee is an excluded fiduciary to the extent that the terms of the trust vest a power or duty exclusively in a trust advisor, trust protector, cotrustee, or other person.
(d) A trustee is an excluded fiduciary to the extent that:
(1) under the terms of the trust, the trustee must follow the direction of a trust advisor, trust protector, cotrustee, or other person; and
(2) the trustee acts in accordance with that direction.
(e) A trust advisor or trust protector is an excluded fiduciary to the extent that the terms of the trust vest a power or duty exclusively in a trustee, trust advisor, trust protector, or other person.
(f) A trust advisor or trust protector is an excluded fiduciary to the extent that:
(1) under the terms of the trust, the trust advisor or trust protector must follow the direction of a trustee, trust advisor, trust protector, or other person; and
(2) the trust advisor or trust protector acts in accordance with that direction.
Source. 2006, 320:60, eff. Aug. 19, 2006. 2008, 374:13, eff. Sept. 9, 2008. 2014, 195:23, eff. July 1, 2014. 2017, 257:23, eff. July 18, 2017.
Section 564-B:7-712
564-B:7-712 Vacancy in a Divided Trust or Directed Trust. –
(a) Unless the terms of the trust provide otherwise, a trustee shall be vested with any power or duty that the terms of the trust otherwise vest exclusively in a trust advisor, trust protector, or cotrustee during any time when, as the result of a vacancy in the office of trust advisor, trust protector, or cotrustee, there is no person who is vested with the power or duty.
(b) Unless the terms of the trust provide otherwise, a trustee may exercise without direction any power that, under the terms of the trust, the trustee otherwise may exercise only at the direction of a trust advisor, trust protector, or cotrustee during any time when, as the result of a vacancy in the office of trust advisor, trust protector, or cotrustee, there is no person who is vested with the power to direct the trustee to exercise that power.
(c) A trustee who is vested with a power or duty under subsection (a) shall not be liable to any person for failing to exercise that power or duty during the 60-day period beginning on the date on which the trustee obtains knowledge of the vacancy.
(d) A trustee who may exercise a power under subsection (b) shall not be liable to any person for failing to exercise that power during the 60-day period beginning on the date on which the trustee obtains knowledge of the vacancy.
Source. 2006, 320:60, eff. Aug. 19, 2006. 2017, 257:24, eff. July 18, 2017.
ARTICLE 8
DUTIES AND POWERS OF TRUSTEE
Section 564-B:8-801
564-B:8-801 Duty to Administer, Invest and Manage Trust, and Distribute Trust Property. –
Upon acceptance of a trusteeship, the trustee shall administer, invest and manage the trust and distribute the trust property in good faith, in accordance with its terms and purposes and the interests of the beneficiaries, and in accordance with this chapter.
Source. 2004, 130:1. 2005, 270:19, eff. Sept. 20, 2005.
Section 564-B:8-802
564-B:8-802 Duty of Loyalty. –
(a) A trustee shall administer, invest and manage the trust and distribute the trust property solely in the interests of the beneficiaries.
(b) Subject to the rights of persons dealing with or assisting the trustee as provided in RSA 564-B:10-1012, a sale, encumbrance, or other transaction involving the investment or management of trust property entered into by the trustee for the trustee's own personal account or which is otherwise affected by a conflict between the trustee's fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless:
(1) the transaction was authorized by the terms of the trust;
(2) the transaction was approved by the court;
(3) the beneficiary did not commence a judicial proceeding within the time allowed by RSA 564-B:10-1005;
(4) the beneficiary consented to the trustee's conduct, ratified the transaction, or released the trustee in compliance with RSA 564-B:10-1009; or
(5) the transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.
(c) A sale, encumbrance, or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with:
(1) the trustee's spouse;
(2) the trustee's descendants, siblings, parents, or their spouses;
(3) an agent or attorney of the trustee; or
(4) a corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee's best judgment.
(d) A transaction between a trustee and a beneficiary that does not concern trust property but that occurs during the existence of the trust or while the trustee retains significant influence over the beneficiary and from which the trustee obtains an advantage is voidable by the beneficiary unless the trustee establishes that the transaction was fair to the beneficiary.
(e) A transaction not concerning trust property in which the trustee engages in the trustee's individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.
(f) The following transactions, if fairly priced and in accordance with the interest of the beneficiaries and the purposes of the trust, are not presumed to be affected by a conflict between the trustee's personal and fiduciary interest provided that any investment made pursuant to the transaction otherwise complies with the prudent investor rule of article 9:
(1) an investment by a trustee in securities of an investment company or investment trust to which the trustee, or its affiliate, provides services in a capacity other than as trustee;
(2) the placing of securities transactions by a trustee through a securities broker that is a part of the same company as the trustee, is owned by the trustee, or is affiliated with the trustee;
(3) any loan from the trustee or its affiliate; or
(4) an investment in an insurance contract purchased from an insurance agency owned by, or affiliated with, the trustee, or any of its affiliates.
(g) If compensation, in addition to the trustee's fees charged to the trust is paid, to the trustee, its affiliate, or associated entity for any transaction or for the provision of services described in subsection (f) the trustee shall at least annually notify the persons that would be entitled under RSA 564-B:8-813 to receive a copy of the trustee's annual report of the rate or method by which the compensation was determined.
(h) In voting shares of stock or in exercising powers of control over similar interests in other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the trust is the sole owner of a corporation or other form of enterprise, the trustee shall elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.
(i) The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that might violate this section if entered into by the trustee.
(j) This section does not preclude any of the following transactions to the extent that the transaction is fair to the beneficiaries:
(1) An agreement between a trustee and a beneficiary relating to the appointment of the trustee or any of its affiliates;
(2) An agreement between a trustee and a beneficiary relating to the compensation of the trustee or any of its affiliates;
(3) Payment of reasonable compensation to the trustee or any of its affiliates;
(4) A transaction between a trust and any of the following:
(A) Another trust of which the trustee is a trustee, trust advisor, or trust protector or in which a beneficiary has an interest;
(B) A decedent's estate of which the trustee is an executor or other fiduciary or in which a beneficiary has an interest;
(C) A conservatorship of which the trustee is a conservator or in which a beneficiary has an interest; or
(D) A guardianship of which the trustee is a guardian or in which a beneficiary has an interest;
(5) A deposit of trust money in a regulated financial-service institution operated by the trustee or any of its affiliates;
(6) An advance of money by the trustee or any of its affiliates for the protection of the trust;
(7) A delegation by a trustee to an agent that is affiliated or associated with the trustee; or
(8) A transaction made pursuant to a delegation by a trustee to an agent that is affiliated or associated with the trustee.
Source. 2004, 130:1. 2005, 270:20, 21. 2006, 320:61, eff. Aug. 19, 2006. 2017, 257:25, 26, eff. July 18, 2017.
Section 564-B:8-803
564-B:8-803 Impartiality. –
If a trust has 2 or more beneficiaries, the trustee shall act impartially in administering, investing, managing, and distributing the trust property, giving due regard to the beneficiaries' respective interests.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:8-804
564-B:8-804 Prudent Administration. –
A trustee shall administer, invest, and manage the trust and distribute the trust property as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
Source. 2004, 130:1. 2005, 270:22, eff. Sept. 20, 2005.
Section 564-B:8-805
564-B:8-805 Costs of Administration. –
In administering, investing, and managing the trust and distributing the trust property, the trustee may incur only costs that are reasonable in relation to the trust property, the purposes of the trust, and the skills of the trustee.
Source. 2004, 130:1. 2005, 270:23, eff. Sept. 20, 2005.
Section 564-B:8-806
564-B:8-806 Trustee's Skills. –
A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee's representation that the trustee has special skills or expertise, shall use those special skills or expertise.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:8-807
564-B:8-807 Delegation by Trustee to an Agent. –
(a) A trustee may delegate to any person, even if that person is associated or affiliated with the trustee, any duty, power, investment function, or management function that a prudent trustee of comparable skills could properly delegate under the circumstances.
(b) The trustee shall exercise reasonable care, skill, and caution in:
(1) selecting an agent;
(2) establishing the scope and terms of the delegation, consistent with the purposes of the trust and the terms of the trust; and
(3) periodically reviewing the agent's actions for the purpose of monitoring the agent's performance and compliance with the scope and terms of the delegation.
(c) In performing a delegated duty, power, or function, an agent owes a duty to the trust to exercise reasonable care to comply with the scope and terms of the delegation.
(d) A trustee who complies with subsection (a) and (b) is not liable to the beneficiaries or to the trust for an action of the agent to whom the duty, power, or function was delegated.
(e) A trustee's delegation of a duty, power, or function to an agent under a power of attorney shall not be valid unless the power of attorney expressly refers to the trustee in his, her, or its capacity as a trustee of the trust.
(f) In the case of a trustee who is an individual, the trustee's delegation of any duty, power, or function to an agent under a power of attorney shall terminate upon the trustee's incapacity unless:
(1) The terms of the trust provide that the delegation may remain effective during the trustee's incapacity; and
(2) The power of attorney provides, that the delegation does not terminate upon the trustee's incapacity.
(g) By accepting a delegation of a duty, power, or function from a trustee of a trust that has its principal place of administration in this state or subsequently changes its principal place of administration to this state, an agent shall be subject to the personal jurisdiction of the courts of this state regarding any matter involving the trust.
Source. 2004, 130:1. 2006, 320:62, eff. Aug. 19, 2006. 2017, 257:27, eff. July 18, 2017.
Section 564-B:8-808
564-B:8-808 Powers to Direct. –
(a) While a trust is revocable, the trustee may follow a direction of the settlor that is contrary to the terms of the trust.
(b) If the terms of a trust, an agreement of the qualified beneficiaries, or a court order, confer upon a person (other than the settlor of a revocable trust) the power to direct certain actions of the trustee, then the trustee shall act in accordance with an exercise of the power.
(c) The terms of a trust may confer upon a trustee or other person a power to direct the modification or termination of the trust.
(d) A person who holds a power to direct is a trust advisor, except to the extent that the person is a beneficiary of the trust and, under such power, the person may direct the trustee to make distributions.
Source. 2004, 130:1. 2006, 320:63, eff. Aug. 19, 2006. 2008, 374:16, eff. Sept. 9, 2008.
Section 564-B:8-809
564-B:8-809 Control and Protection of Trust Property. –
A trustee shall take reasonable steps to take control of and protect the trust property.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:8-810
564-B:8-810 Recordkeeping and Identification of Trust Property. –
(a) A trustee shall keep adequate records of the administration of the trust.
(b) A trustee shall keep trust property separate from the trustee's own property.
(c) Except as otherwise provided in subsection (d) and in RSA 564-B:8-816(a)(7)(B), a trustee shall cause the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary.
(d) If the trustee maintains records clearly indicating the respective interests, a trustee may invest as a whole the property of 2 or more separate trusts.
Source. 2004, 130:1. 2005, 270:24, eff. Sept. 20, 2005.
Section 564-B:8-811
564-B:8-811 Enforcement and Defense of Claims. –
A trustee shall take reasonable steps to enforce claims of the trust and to defend claims against the trust.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:8-812
564-B:8-812 Collecting Trust Property. –
(a) A trustee shall take reasonable steps to compel a former trustee or other person to deliver trust property to the trustee.
(b) Except as otherwise provided under the terms of the trust, the trustee shall take reasonable steps to redress a breach of trust known to the trustee to have been committed by a cotrustee or a former trustee.
(c) Except as otherwise provided under the terms of the trust, the trustee shall take reasonable steps to redress a breach of trust actually known to the trustee to have been committed by a trust advisor, a former trust advisor, a trust protector, or a former trust protector. This subsection does not impose upon a trustee who is an excluded fiduciary any duty to monitor, duty to advise, or duty to warn as described under RSA 564-B:12-1204.
(d) A person who receives a distribution from a trust is liable to return the distribution to the extent that a court subsequently determines that the person was not entitled to the distribution.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:24, eff. July 1, 2014.
Section 564-B:8-813
564-B:8-813 Duty to Inform and Report. –
(a) Except while a trust is revocable and a settlor has capacity to revoke the trust, a trustee of a revocable trust shall provide a trustee's report comparable to that described in subsection (d) to the distributees or permissible distributees of trust income or principal.
(b) A trustee shall keep the qualified beneficiaries of an irrevocable trust who have attained 21 years of age and those having the rights of a qualified beneficiary reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. A trustee shall be presumed to have fulfilled this duty if the trustee provides the information described in paragraphs (c) and (d). Unless unreasonable under the circumstances, a trustee of an irrevocable trust shall promptly respond to the request of any qualified beneficiary or one having the rights of a qualified beneficiary for information related to the administration of the trust. A trustee may provide any other information the trustee deems necessary or appropriate to keep beneficiaries reasonably informed.
(c) A trustee of an irrevocable trust:
(1) upon request of a qualified beneficiary who has attained 21 years of age or one who has the rights of a qualified beneficiary, shall promptly furnish to the beneficiary a copy of the trust instrument;
(2) by no later than 60 days after the later of (i) accepting a trusteeship or (ii) the death of the last surviving settlor, shall notify the qualified beneficiaries who have attained 21 years of age and those who have the rights of a qualified beneficiary of the acceptance and of the trustee's name, address, and telephone number; and
(3) by no later than 60 days after the date the trustee acquires knowledge of the creation and initial funding of an irrevocable trust and the death of the last surviving settlor, or by no later than 60 days after the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, that the trust has been initially funded, and that the last surviving settlor has died, shall notify the qualified beneficiaries who have attained 21 years of age and those who have the rights of a qualified beneficiary of the trust's existence, of the right to request a copy of the trust instrument, and of the right to a trustee's report as provided in subsection (d).
(d) A trustee of an irrevocable trust shall send a report at least annually and at the termination of the trust to the distributees or permissible distributees of trust income or principal, unless the terms of the trust provide otherwise; the qualified beneficiaries who request it; those who have the rights of a qualified beneficiary who request it; and the settlor or a guardian or agent under power of attorney of a settlor who does not have the capacity described in RSA 564-B:6-601. The report shall include a report of the trust property, liabilities, receipts, and disbursements, including the source and amount of the trustee's compensation, a listing of the trust assets, and, if feasible, their respective market values. Upon a vacancy in a trusteeship, unless a cotrustee remains in office, a report must be sent to the qualified beneficiaries who have attained 21 years of age and those who have the rights of a qualified beneficiary by the former trustee. A personal representative, conservator, guardian of the estate, or guardian of the person may send a report on behalf of a deceased or incapacitated trustee.
(e) A beneficiary may waive the right to a trustee's report or other information otherwise required to be furnished under this section and with respect to future reports and other information, may withdraw a waiver previously given.
(f) Subsections (b), (c), and (d) of this section shall apply only to a trustee who accepts a trusteeship on or after October 1, 2004, to an irrevocable trust created on or after October 1, 2004, and to a revocable trust which became irrevocable on or after October 1, 2004.
(g) The change in the identity of a trustee, occurring as the result of a mere name change or a merger, consolidation, combination or reorganization of a corporate trustee, does not require the notice described in subsection (c)(2) of this section.
(h) In fulfilling the duty under this section to the director of charitable trusts pursuant to RSA 564-B:1-110(c), the trustee may permit the director of charitable trusts to view the trust instrument and reports upon request at the office of the trustee instead of providing a copy of the trust instrument and the reports.
(i) The trustee of an irrevocable trust shall notify the qualified beneficiaries who have attained 21 years of age and those who have the rights of a qualified beneficiary by no later than 60 days after any change in the method or rate of the trustee's compensation.
(j) If the trustee is bound by any written confidentiality restrictions with respect to an asset of a trust, a trustee may require that any beneficiary who is eligible to receive information pursuant to this section about such asset shall agree in writing to be bound by the confidentiality restrictions that bind the trustee before receiving such information from the trustee.
(k) A trust advisor, trust protector, or other fiduciary designated by the terms of the trust shall keep each excluded fiduciary designated by the terms of the trust reasonably informed about (1) the administration of the trust with respect to any specific duty or function being performed by the trust advisor, trust protector, or other fiduciary to the extent that the duty or function would normally be performed by the excluded fiduciary or to the extent that providing such information to the excluded fiduciary is reasonably necessary for the excluded fiduciary to perform its duties and (2) any other material information that the excluded fiduciary would be required to disclose to the qualified beneficiaries under subsection (b) regardless of whether the terms of the trust relieve the excluded fiduciary from providing such information to qualified beneficiaries. Neither the performance nor the failure to perform of a trust advisor, trust protector, or other fiduciary designated by the terms of the trust as provided in this subsection shall affect the limitation on the liability of the excluded fiduciary provided by RSA 564-B:12-1206 and RSA 564-B:12-1207.
Source. 2004, 130:1. 2005, 270:25. 2006, 320:64, eff. Aug. 19, 2006. 2008, 374:14, eff. Sept. 9, 2008.
Section 564-B:8-814
564-B:8-814 Discretionary Powers; Tax Savings. –
(a) Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of such terms as "absolute," "sole," or "uncontrolled," the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.
(b) Subject to the provisions of paragraph (a), if a distribution to or for the benefit of a beneficiary is subject to the exercise of the trustee's discretion, whether or not the terms of a trust include a standard to guide the trustee in making distribution decisions, then the beneficiary's interest is neither a property interest nor an enforceable right, but a mere expectancy.
(c) Subject to the provisions of paragraph (a), unless the terms of the trust expressly provide otherwise, if the terms of a trust permit distributions among a class of beneficiaries, distributions to or for the benefit of whom are subject to the exercise of the trustee's discretion without a standard to guide the trustee in making distribution decisions, then the trustee may make distributions unequally among the beneficiaries and may make distributions entirely to one beneficiary to the exclusion of the other beneficiaries.
(d) Subject to paragraph (f), and unless the terms of the trust expressly indicate that a rule in this paragraph does not apply:
(1) a person other than a settlor who is a beneficiary and trustee of a trust that confers on the trustee a power to make discretionary distributions to or for the trustee's personal benefit may exercise the power only in accordance with an ascertainable standard; and
(2) a trustee may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that the trustee personally owes another person.
(e) A power whose exercise is limited or prohibited by paragraph (d) may be exercised by a majority of the remaining trustees whose exercise of the power is not so limited or prohibited. If the power of all trustees is so limited or prohibited, the court may appoint a special trustee with authority to exercise the power.
(f) Paragraph (d) does not apply to:
(1) a power held by the settlor's spouse who is the trustee of a trust for which a marital deduction was previously allowed under section 2056(b)(5) or 2523(e) of the Internal Revenue Code;
(2) any trust during any period that the trust may be revoked or amended by its settlor; or
(3) a trust if contributions to the trust qualify for the annual exclusion under section 2503(c) of the Internal Revenue Code.
Source. 2004, 130:1. 2005, 270:26. 2006, 320:65, eff. Aug. 19, 2006. 2008, 374:15, eff. Sept. 9, 2008.
Section 564-B:8-815
564-B:8-815 General Powers of Trustee. –
(a) A trustee, without authorization by the court, may exercise:
(1) powers conferred by the terms of the trust; and
(2) except as limited by the terms of the trust:
(A) all powers over the trust property which an unmarried competent owner has over individually owned property;
(B) any other powers appropriate to achieve the proper administration, investment, management, and distribution of the trust property; and
(C) any other powers conferred by this chapter or other laws of this state.
(b) The exercise of a power is subject to the fiduciary duties prescribed by this article.
(c) The powers of a trustee are subject to the provisions of RSA 564-A:3, IV.
Source. 2004, 130:1. 2005, 270:27, eff. Sept. 20, 2005.
Section 564-B:8-816
564-B:8-816 Specific Powers of Trustee. –
(a) Without limiting the authority conferred by RSA 564-B:8-815, a trustee may:
(1) collect trust property and accept or reject additions to the trust property from a settlor or any other person and trust property may be accepted from a settlor and retained even though it includes an asset in which the trustee is personally interested;
(2) acquire or sell property, for cash or on credit, at public or private sale, including acquiring an undivided interest in a trust asset in which the trustee, in any trust capacity, holds an undivided interest;
(3) exchange, partition, or otherwise change the character of trust property;
(4) deposit trust money in an account in a regulated financial-service institution;
(5) borrow money, with or without security, and mortgage or pledge trust property for a period within or extending beyond the duration of the trust;
(6) with respect to an interest in a proprietorship, partnership, limited liability company, business trust, corporation, or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members, or property owners, including merging, dissolving, or otherwise changing the form of business organization or contributing additional capital;
(7) with respect to stocks or other securities, exercise the rights of an absolute owner, including the right to:
(A) vote, or give proxies to vote, with or without power of substitution, or enter into or continue a voting trust agreement;
(B) hold a security in the name of a nominee or in other form without disclosure of the trust so that title may pass by delivery;
(C) pay calls, assessments, and other sums chargeable or accruing against the securities, and sell or exercise stock subscription or conversion rights; and
(D) deposit the securities with a depositary or other regulated financial-service institution;
(8) with respect to an interest in real property, construct, or make ordinary or extraordinary repairs to, alterations to, or improvements in, buildings or other structures, demolish improvements, raze existing or erect new party walls or buildings, subdivide or develop land, dedicate land to public use or grant public or private easements, and make or vacate plats and adjust boundaries;
(9) enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement for exploration and removal of natural resources, with or without the option to purchase or renew, for a period within or extending beyond the duration of the trust;
(10) grant an option involving a sale, lease, or other disposition of trust property or acquire an option for the acquisition of property, including an option exercisable beyond the duration of the trust, and exercise an option so acquired;
(11) insure the property of the trust against damage or loss and insure the trustee, the trustee's agents, and beneficiaries against liability arising from the administration of the trust;
(12) abandon or decline to administer property of no value or of insufficient value to justify its collection or continued administration;
(13) with respect to possible liability for violation of environmental law:
(A) inspect or investigate property the trustee holds or has been asked to hold, or property owned or operated by an organization in which the trustee holds or has been asked to hold an interest, for the purpose of determining the application of environmental law with respect to the property;
(B) take action to prevent, abate, or otherwise remedy any actual or potential violation of any environmental law affecting property held directly or indirectly by the trustee, whether taken before or after the assertion of a claim or the initiation of governmental enforcement;
(C) decline to accept property into trust or disclaim any power with respect to property that is or may be burdened with liability for violation of environmental law;
(D) compromise claims against the trust which may be asserted for an alleged violation of environmental law;
(E) pay the expense of any inspection, review, abatement, or remedial action to comply with environmental law; and
(F) comply with the environmental provisions of RSA 564-A:3-a;
(14) pay or contest any claim, settle a claim by or against the trust and release, in whole or in part, a claim belonging to the trust;
(15) pay taxes, assessments, compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the administration of the trust;
(16) exercise elections with respect to federal, state, and local taxes;
(17) select a mode of payment under any employee benefit or retirement plan, annuity, or life insurance payable to the trustee, exercise rights thereunder, including exercise of the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds;
(18) make loans out of trust property, including loans to a beneficiary on terms and conditions the trustee considers to be fair and reasonable under the circumstances, and the trustee has a lien on future distributions for repayment of those loans;
(19) on terms and conditions that the trustee considers to be fair and reasonable under the circumstances:
(A) guarantee loans or secure other obligations, including loans made by others to the beneficiary; or
(B) pledge trust property to guarantee loans or secure other obligations, including loans made by others to the beneficiary;
(20) appoint a trustee to act in another jurisdiction with respect to trust property located in the other jurisdiction, confer upon the appointed trustee all of the powers and duties of the appointing trustee, require that the appointed trustee furnish security, and remove any trustee so appointed;
(21) pay an amount distributable to a beneficiary who is under a legal disability or who the trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or applying it for the beneficiary's benefit, or by:
(A) paying it to the beneficiary's conservator or to the guardian of the beneficiary's estate;
(B) paying it to the beneficiary's custodian under the Uniform Transfers to Minors Act or custodial trustee under the Uniform Custodial Trust Act, and, for that purpose, creating a custodianship or custodial trust;
(C) if the trustee does not know of a conservator, guardian of the estate of the beneficiary, custodian, or custodial trustee, paying it to an adult relative or other person having legal or physical care or custody of the beneficiary, to be expended on the beneficiary's behalf; or
(D) managing it as a separate fund on the beneficiary's behalf, subject to the beneficiary's continuing right to withdraw the distribution;
(22) on distribution of trust property or the division or termination of a trust, make distributions in divided or undivided interests, allocate particular assets in proportionate or disproportionate shares, value the trust property for those purposes, and adjust for resulting differences in valuation;
(23) resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution;
(24) prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to protect trust property and the trustee in the performance of the trustee's duties;
(25) sign and deliver contracts and other instruments that are useful to achieve or facilitate the exercise of the trustee's powers;
(26) on termination of the trust, exercise the powers appropriate to wind up the administration of the trust and distribute the trust property to the persons entitled to it;
(27) employ persons, including attorneys, auditors, investment advisors, or agents, even if they are associated with the trustee, to advise or assist the trustee in the performance of the trustee's administrative duties and to act without independent investigation upon their recommendations;
(28) allocate items of income or expense to either trust income or principal, as provided by law, including creation of reserves out of income for depreciation, obsolescence, amortization, or for depletion in mineral or timber properties; and
(29) convert a trust into a unitrust as provided in RSA 564-C:1-106.
(b)(1) Without limiting the authority conveyed by RSA 564-B:8-815, a trustee of a charitable remainder trust may pay an amount distributable to a beneficiary who is financially disabled by paying that amount to a separate trust if under the terms of that separate trust, the trustee must administer those amounts on behalf of that beneficiary and, upon the beneficiary's death, must distribute the remaining trust property either to:
(A) the beneficiary's estate; or
(B) after reimbursing the state for any Medicaid benefits provided to the individual, in accordance with the exercise of the beneficiary's general power of appointment.
(2) For purposes of this paragraph, "charitable remainder trust" means a charitable remainder annuity trust within the meaning of section 664(d)(1) of the Internal Revenue Code or a charitable remainder unitrust within the meaning of section 664(d)(2) of the Internal Revenue Code.
(3) For the purposes of this paragraph "financially disabled" means financially disabled within the meaning of section 6511(h)(2)(A) of the Internal Revenue Code.
(c) Except as otherwise provided under the terms of the trust, a trustee shall have the discretionary power to reimburse the settlor for the portion of the settlor's income tax liability attributable to the trust under section 671 of the Internal Revenue Code or any similar tax law.
(d) An executor or other fiduciary administering a will has all powers conferred by this section unless limited in the will, subject to the fiduciary duties prescribed by the will or by other laws of this state.
Source. 2004, 130:1. 2005, 270:28-30, eff. Sept. 20, 2005. 2008, 374:29, eff. Sept. 9, 2008. 2014, 195:25, eff. July 1, 2014. 2015, 272:62, eff. July 27, 2015. 2019, 230:3, eff. Sept. 10, 2019.
Section 564-B:8-817
564-B:8-817 Distribution upon Termination. –
(a) Upon termination or partial termination of a trust, the trustee may send to the beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed distribution terminates if the beneficiary does not notify the trustee of an objection within 30 days after the proposal was sent but only if the proposal informed the beneficiary of the right to object and of the time allowed for objection.
(b) Upon the occurrence of an event terminating or partially terminating a trust, the trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it, subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses, and taxes.
(c) A release by a beneficiary of a trustee from liability for breach of trust is invalid to the extent:
(1) it was induced by improper conduct of the trustee; or
(2) beneficiary, at the time of the release, did not know of the beneficiary's rights or of the material facts relating to the breach.
(d) A person who receives a distribution from a trust that has terminated is liable to return the distribution to the extent that a court subsequently determines that the person was not entitled to the distribution.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:26, eff. July 1, 2014.
ARTICLE 9
UNIFORM PRUDENT INVESTOR ACT
Section 564-B:9-901
564-B:9-901 Prudent Investor Rule. –
(a) Except as otherwise provided in subsection (b), a trustee who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule set forth in this chapter.
(b) The prudent investor rule may be expanded, restricted, eliminated, or otherwise altered by the terms of the trust except as provided in RSA 564-B:1-105(b)(2) and (3). A trustee is not liable to a beneficiary to the extent that the trustee acted in good faith and reasonable reliance on (1) the express terms of the trust, (2) a court order, (3) RSA 564-B:9-903, or (4) RSA 564-B:9-902(c)(10).
Source. 2004, 130:1. 2005, 270:31. 2006, 320:66, eff. Aug. 19, 2006. 2021, 103:4, eff. Aug. 30, 2021.
Section 564-B:9-902
564-B:9-902 Standard of Care; Portfolio Strategy; Risk and Return Objectives. –
(a) A trustee shall invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.
(b) A trustee's investment and management decisions respecting individual assets must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the trust.
(c) Among circumstances that a trustee shall consider in investing and managing trust assets are such of the following as are relevant to the trust or its beneficiaries:
(1) general economic conditions;
(2) the possible effect of inflation or deflation;
(3) the expected tax consequences of investment decisions or strategies;
(4) the role that each investment or course of action plays within the overall trust portfolio, which may include financial assets, interests in closely held enterprises, tangible and intangible personal property, and real property;
(5) the expected total return from income and the appreciation of capital;
(6) other resources of the beneficiaries;
(7) any other trust if one or more of the beneficiaries also are beneficiaries of that trust;
(8) needs for liquidity, regularity of income, and preservation or appreciation of capital;
(9) an asset's special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries; and
(10) unless contrary to settlor intent or otherwise prohibited by RSA 564-B:1-111(c), for a trust not subject to RSA 292-B, the expressed wishes of the interested persons of the trust, including where applicable the director of charitable trusts as described in RSA 564-B:1-111(a), as reflected in a nonjudicial settlement agreement pursuant to RSA 564-B:1-111, to have the trustee, trust advisor, or trust protector engage in investing strategies that align with the interested persons' social, environmental, or governance objectives or other values or beliefs of the interested persons, regardless of investment performance.
(d) A trustee shall make a reasonable effort to verify facts relevant to the investment and management of trust assets. For purposes of subsections (c)(6) and (c)(7), the trustee has a duty to investigate the relevant information and a duty to monitor the relevant information, and the trustee is not liable to any person to the extent that the trustee performs those duties in good faith and, in accordance with this section, considers the information that the trustee obtains through the good faith performance of those duties.
(e) A trustee may invest in any kind of property or type of investment consistent with the standards of this chapter.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:27, 40, eff. July 1, 2014. 2021, 103:5, eff. Aug. 30, 2021.
Section 564-B:9-903
564-B:9-903 Diversification. –
A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:9-904
564-B:9-904 Duties at Inception of Trusteeship. –
Within a reasonable time after accepting a trusteeship or receiving trust assets, a trustee shall review the trust assets and make and implement decisions concerning the retention and disposition of assets, in order to bring the trust portfolio into compliance with the purposes, terms, distribution requirements, and other circumstances of the trust, and with the requirements of this chapter.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:9-905
564-B:9-905 Reviewing Compliance. –
(a) Compliance with the prudent investor rule is determined:
(1) in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight; and
(2) by the trustee's conduct and not by the return realized from the investment and management of the trust assets.
(b) A trustee's failure to realize a return that equals or exceeds any financial index is not evidence of a trustee's failure to comply with the prudent investor rule.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:28, eff. July 1, 2014.
Section 564-B:9-906
564-B:9-906 Language Invoking Standard of Article. –
The following terms or comparable language in the provisions of a trust, unless otherwise limited or modified, authorizes any investment or strategy permitted under this article: "investments permissible by law for investment of trust funds," "legal investments," "authorized investments," "using the judgment and care under the circumstances then prevailing that persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but in regard to the permanent disposition of their funds, considering the probable income as well as the probable safety of their capital," "prudent man rule," "prudent trustee rule," "prudent person rule," and "prudent investor rule."
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:9-907
564-B:9-907 Governing Law. –
The provisions of article 9 of this code shall be construed as pertaining to the administration of a trust and as applicable to any trust that is administered in this state or that is governed by the laws of this state.
Source. 2008, 374:17, eff. Sept. 9, 2008.
ARTICLE 10
LIABILITY OF TRUSTEES AND RIGHTS OF PERSONS DEALING WITH TRUSTEE
Section 564-B:10-1001
564-B:10-1001 Remedies for Breach of Trust –
(a) A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
(b) To remedy a breach of trust that has occurred or may occur, the court may:
(1) compel the trustee to perform the trustee's duties;
(2) enjoin the trustee from committing a breach of trust;
(3) compel the trustee to redress a breach of trust by paying money, restoring property, or other means;
(4) order a trustee to account;
(5) appoint a special fiduciary to take possession of the trust property and administer the trust;
(6) suspend the trustee;
(7) remove the trustee as provided in RSA 564-B:7-706;
(8) reduce or deny compensation to the trustee;
(9) subject to RSA 564-B:10-1012, void an act of the trustee, impose a lien or a constructive trust on trust property, or trace trust property wrongfully disposed of and recover the property or its proceeds; or
(10) order any other appropriate relief, including relief under RSA 547:3-b.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1002
564-B:10-1002 Damages for Breach of Trust. –
(a) A trustee who commits a breach of trust is liable to the beneficiaries affected for the greater of:
(1) the amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred; or
(2) the profit the trustee made by reason of the breach.
(b) Except as otherwise provided in this subsection, if more than one trustee is liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee or trustees, to the extent permitted by RSA 507:7-f. However, a trustee is not entitled to contribution if the trustee was substantially more at fault than another trustee or if the trustee committed the breach of trust in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who received a benefit from the breach of trust is not entitled to contribution from another trustee to the extent of the benefit received.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1003
564-B:10-1003 Damages in Absence of Breach. –
(a) A trustee, trust advisor, or trust protector is accountable to an affected beneficiary for any profit made by that trustee, trust advisor, or trust protector arising from the administration of the trust, even absent a breach of trust. This section does not preclude the payment of reasonable compensation to a trustee, trust advisor, or trust protector.
(b) Absent a breach of trust, a trustee, trust advisor, or trust protector is not liable to a beneficiary for a loss or depreciation in the value of trust property or for not having made a profit.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:41, eff. July 1, 2014.
Section 564-B:10-1004
564-B:10-1004 Attorney's Fees and Costs. –
In a judicial proceeding involving the administration of a trust, the court, as justice and equity may require, may award costs and expenses, including reasonable attorney's fees, to any party, to be paid by another party or from the trust that is the subject of the controversy.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1005
564-B:10-1005 Limitation of Action Against a Trustee by a Beneficiary. –
(a) A beneficiary may not commence a proceeding against a trustee for breach of trust more than one year after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust and informed the beneficiary of the time allowed for commencing a proceeding.
(b) A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence.
(c) If subsection (a) does not apply, a judicial proceeding by a beneficiary against a trustee for breach of trust must be commenced within 3 years after the first to occur of:
(1) The removal, resignation, or death of the trustee;
(2) The termination of the beneficiary's interest in the trust;
(3) The termination of the trust; or
(4) The date on which the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust.
(d) The periods of limitation under this section shall not be tolled for any reason, except by a written agreement of the trustees and qualified beneficiaries or a court order. Without limiting the circumstances under which a court may issue an order tolling the period of limitations, a court may issue an order tolling the period of limitations under this section during the pendency of any action described in RSA 564-B:10-1014(c)(3).
(e) [Repealed.]
(f) In the case of a claim against a deceased trustee for breach of trust, this section shall apply to the extent that the claim is not barred by a limitation period under RSA 556, RSA 564-B:5-508, or other applicable law.
(g) For purposes of determining whether, for purposes of this section, a trust has terminated or a beneficiary's interest in a trust has terminated, trust property excludes any claim against a trustee, trust advisor, or trust protector.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2011, 243:11, eff. Sept. 11, 2011. 2014, 195:39, II, eff. July 1, 2014. 2015, 272:54, eff. July 27, 2015.
Section 564-B:10-1005A
564-B:10-1005A Limitation of Action Against a Trustee by a Trustee, Trust Advisor, or Trust Protector. –
(a) A trustee shall commence a proceeding against a cotrustee or a former trustee for breach of trust within 3 years after the earlier of the date on which the trustee was sent a report that adequately disclosed the existence of a potential claim for breach of trust or the removal, resignation, or death of the cotrustee or former trustee. A trustee, however, shall not commence a proceeding against a cotrustee or a former trustee if, under RSA 564-B:10-1005, none of the beneficiaries may commence a proceeding against the cotrustee or former trustee for such breach of trust.
(b) A trust advisor or trust protector shall commence a proceeding against a trustee for breach of trust within 3 years after earlier of the date on which the trust advisor or trust protector was sent a report that adequately disclosed the existence of a potential claim for breach of trust or the removal, resignation, or death of the trustee. A trust advisor or trust protector, however, shall not commence a proceeding against a trustee for breach of trust if, under RSA 564-B:10-1005, none of the beneficiaries may commence a proceeding against the trustee for such breach of trust.
(c) A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the recipient knows of the potential claim or should have inquired into its existence.
(d) The periods of limitation under subsection (a) shall not be tolled except by either a written agreement of the trustees or, in the case of a possible claim against a former trustee, the trustees and the former trustee or a court order. The periods of limitation under subsection (b) shall not be tolled except by a written agreement of the trust advisors, trust protectors, and trustees or a court order. Without limiting the circumstances under which a court may issue an order tolling the period of limitations, a court may issue an order tolling the period of limitations under this section during the pendency of any action described in RSA 564-B:10-1014(c)(3).
(e) In the case of a claim against a deceased trustee for breach of trust, this section shall apply to the extent that the claim is not barred by a limitation period under RSA 556, RSA 564-B:5-508, or other applicable law.
(f) For purposes of determining whether, for purposes of this section, a trust has terminated or a beneficiary's interest in a trust has terminated, trust property excludes any claim against a trustee, trust advisor, or trust protector.
Source. 2011, 243:12, eff. Sept. 11, 2011. 2015, 272:55, eff. July 27, 2015.
Section 564-B:10-1006
564-B:10-1006 Reliance on Trust Instrument. –
A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the reliance.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1007
564-B:10-1007 Event Affecting Administration or Distribution. –
If the happening of an event, including marriage, divorce, performance of educational requirements, or death, affects the administration or distribution of a trust, a trustee who has exercised reasonable care to ascertain the happening of the event is not liable for a loss resulting from the trustee's lack of knowledge.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1008
564-B:10-1008 Exculpation of Trustee. –
(a) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it:
(1) relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
(2) was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.
(b) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1009
564-B:10-1009 Beneficiary's Consent, Release, or Ratification. –
A trustee is not liable to a beneficiary for breach of trust if the beneficiary, consented to the conduct constituting the breach, released the trustee from liability for the breach, or ratified the transaction constituting the breach, unless:
(1) the consent, release, or ratification of the beneficiary was induced by improper conduct of the trustee; or
(2) at the time of the consent, release, or ratification, the beneficiary did not know of the beneficiary's rights or of the material facts relating to the breach.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1010
564-B:10-1010 Limitation on Personal Liability of Trustee. –
(a) Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee's fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.
(b) A trustee is personally liable for torts committed in the course of administering a trust, or for obligations arising from ownership or control of trust property, including liability for violation of environmental law, only if the trustee is personally at fault.
(c) A claim based on a contract entered into by a trustee in the trustee's fiduciary capacity, on an obligation arising from ownership or control of trust property, or on a tort committed in the course of administering a trust, may be asserted in a judicial proceeding against the trustee in the trustee's fiduciary capacity, whether or not the trustee is personally liable for the claim.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1011
564-B:10-1011 Interest as General Partner. –
(a) Except as otherwise provided in subsection (c) or unless personal liability is imposed in the contract, a trustee who holds an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust's acquisition of the interest if the fiduciary capacity was disclosed in the contract. The requirement of disclosure in the contract will be satisfied if the trustee signs the contract, or signs another writing which is contemporaneously delivered to the other parties to the contract, in a manner that clearly evidences that the trustee executed the contract in a fiduciary capacity.
(b) Except as otherwise provided in subsection (c), a trustee who holds an interest as a general partner is not personally liable for torts committed by the partnership or for obligations arising from ownership or control of the interest unless the trustee is personally at fault.
(c) The immunity provided by this section for a trustee who holds an interest as a general partner does not apply if a general partnership interest in the partnership is held personally by the person serving as trustee.
(d) If the trustee of a revocable trust holds an interest as a general partner, the settlor is personally liable for contracts and other obligations of the partnership as if the settlor were a general partner.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1012
564-B:10-1012 Protection of Person Dealing with Trustee. –
(a) A person other than a beneficiary who in good faith assists a trustee, or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee's powers is protected from liability as if the trustee properly exercised the power.
(b) A person other than a beneficiary who in good faith deals with a trustee is not required to inquire into the extent of the trustee's powers or the propriety of their exercise.
(c) A person who in good faith delivers assets to a trustee need not ensure their proper application.
(d) A person other than a beneficiary who in good faith assists a former trustee, or who in good faith and for value deals with a former trustee, without knowledge that the trusteeship has terminated is protected from liability as if the former trustee were still a trustee.
(e) Comparable protective provisions of other laws relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this section.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:10-1013
564-B:10-1013 Certification of Trust. –
(a) Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish to the person a certification of trust containing the following information:
(1) that the trust exists and the date the trust instrument was executed;
(2) the identity of the settlor;
(3) the identity and address of the currently acting trustee;
(4) the powers of the trustee;
(5) the revocability or irrevocability of the trust and the identity of any person holding a power to revoke the trust;
(6) the authority of cotrustees to sign or otherwise authenticate and whether all or less than all are required in order to exercise powers of the trustee;
(7) the trust's taxpayer identification number; and
(8) the manner of taking title to trust property.
(b) A certification of trust may be signed or otherwise authenticated by any trustee.
(c) A certification of trust must state that the trust has not been revoked, modified, or amended in any manner that would cause the representations contained in the certification of trust to be incorrect.
(d) A certification of trust need not contain the dispositive terms of a trust.
(e) A recipient of a certification of trust may require the trustee to furnish copies of those excerpts from the original trust instrument and later amendments which designate the trustee and confer upon the trustee the power to act in the pending transaction.
(f) A person who acts in reliance upon a certification of trust without knowledge that the representations contained therein are incorrect is not liable to any person for so acting and may assume without inquiry the existence of the facts contained in the certification. Knowledge of the terms of the trust may not be inferred solely from the fact that a copy of all or part of the trust instrument is held by the person relying upon the certification.
(g) A person who in good faith enters into a transaction in reliance upon a certification of trust may enforce the transaction against the trust property as if the representations contained in the certification were correct.
(h) A person making a demand for the trust instrument in addition to a certification of trust or excerpts is liable for damages if the court determines that the person did not act in good faith in demanding the trust instrument.
(i) This section does not limit the right of a person to obtain a copy of the trust instrument in a judicial proceeding concerning the trust.
(j) Instead of the certification of trust described in subsection (a), a certificate described in RSA 564-A:7 shall protect persons dealing with a trustee in connection with the conveyance of real or personal property as provided in RSA 564-A:7. Nothing in this section is intended to expand, limit, or otherwise affect the provisions of RSA 564-A:7.
Source. 2004, 130:1. 2005, 270:32, eff. Sept. 20, 2005.
Section 564-B:10-1014
564-B:10-1014 Enforcement of No-Contest Provision. –
(a) For the purposes of this section, a "no-contest provision" of a trust instrument means a provision that, if given effect, would reduce or eliminate the interest of any beneficiary of such trust who, directly or indirectly, initiates or otherwise pursues:
(1) Any action to contest the validity of the trust or the terms of the trust;
(2) Any action to set aside or vary the terms of the trust;
(3) Any action to challenge the acts of the trustee or other fiduciary of the trust in the performance of the trustee's or other fiduciary's duties as described in the terms of the trust; or
(4) Any other act or proceedings to frustrate or defeat the settlor's intent as expressed in the terms of the trust.
(b) A no-contest provision shall be enforceable according to the express terms of the no-contest provision without regard to the presence or absence of probable cause for, or the beneficiary's good or bad faith in, taking the action that would justify the complete or partial forfeiture of the beneficiary's interest in the trust under the terms of the no-contest provision. A no-contest provision shall be unenforceable to the extent that the trust is invalid because of fraud, duress, undue influence, lack of testamentary capacity, or any other reason. In the case of an action solely to challenge the acts of the trustee or other fiduciary of the trust, a no-contest provision shall be unenforceable to the extent that the trustee or other fiduciary has committed a breach of fiduciary duties or breach of trust.
(c) Subsection (b) shall not apply to the extent that a person initiates, maintains, or cooperates in any of the following actions or proceedings:
(1) Any action brought by the trustee or any other fiduciary serving under the terms of the trust, unless the trustee or other fiduciary is a beneficiary against whom the no-contest provision is otherwise enforceable;
(2) Any agreement among the beneficiaries and any other interested persons in settlement of a dispute or resolution of any other matter relating to the trust, including without limitation any nonjudicial settlement agreement;
(3) Any action to determine whether a proposed or pending motion, petition, or other proceeding constitutes a contest within the meaning of a no-contest provision;
(4) Any action brought by a beneficiary or on behalf of any such beneficiary for a construction or interpretation of the terms of the trust;
(5) Any action brought by the attorney general for a construction or interpretation of a charitable trust or a trust containing a charitable interest if a provision exists in a trust purporting to penalize a charity or charitable interest for contesting the trust if probable cause exists for instituting proceedings; or
(6) A proceeding described in subsection (h).
(d) It is the intent of this section to enforce the settlor's intent as reflected in a no-contest provision to the greatest extent possible. The provisions of this section shall be construed and applied in a manner consistent with such intent.
(e) This section shall apply to all judicial proceedings concerning the enforcement or interpretation of a no-contest provision commenced on or after its effective date.
(f) In the trustee's discretion, a trustee may suspend distributions to a beneficiary to the extent that, under a no-contest provision, the beneficiary's action potentially would have caused the reduction or elimination of the beneficiary's interest in the trust. In the trustee's discretion, the trustee may resume those distributions at any time or may continue to suspend those distributions until a court determines whether the beneficiary's interest in the trust has been reduced or eliminated.
(g) In the trustee's discretion, a trustee may decline to distribute trust property in accordance with a person's purported exercise of a power of appointment or a power of withdrawal to the extent that, under a no-contest provision, the person's action potentially would have caused the reduction or elimination of the power of appointment or the power of withdrawal. In the trustee's discretion, the trustee may make those distributions at any time or may continue to decline to make those distributions until a court determines whether the person's power of appointment or power of withdrawal has been reduced or eliminated.
(h) To the extent that the trustee acts in good faith, the trustee is not liable to any person for exercising the discretion under subsection (f) or (g) or not exercising that discretion. A trustee shall be presumed to have exercised the discretion in good faith if, in any judicial proceeding, an interested person other than the trustee has requested a determination of whether, under the no-contest provision, a beneficiary's interest in the trust, a person's power of appointment, or a person's power of withdrawal was reduced or eliminated. A trustee or any other interested person may commence a judicial proceeding for purposes of determining whether a trustee's exercise of discretion under subsection (f) or (g) was made in good faith.
Source. 2011, 243:13, eff. Sept. 11, 2011. 2014, 195:29, 30, eff. July 1, 2014.
Section 564-B:10-1015
564-B:10-1015 Beneficiary's Disclaimer of an Interest in a Trust. –
(a) In addition to a beneficiary's right to disclaim an interest in a trust under RSA 563-B and any other method for refusing to accept an interest in a trust, a beneficiary may disclaim an interest in a trust, including a trust that contains a spendthrift provision. An interest may be less than the beneficiary's entire interest in the trust. The disclaimer must be made by a written instrument delivered to a trustee.
(b) Unless the trustee has made a distribution to or for the benefit of the beneficiary, a disclaimer under subsection (a) is effective as of the interest's creation and is not a transfer, assignment, or release of the disclaimed interest.
(c) A beneficiary's right to disclaim an interest in a trust does not affect the validity or effect of a spendthrift provision.
Source. 2015, 272:63, eff. Oct. 1, 2015.
Section 564-B:10-1016
564-B:10-1016 Powers of Appointment. –
(a) A power of appointment is exercised only:
(1) If the instrument exercising the power is valid under applicable law;
(2) If the terms of the instrument exercising the power:
(A) Manifest the powerholder's intent to exercise the power; and
(B) Subject to subsection (b), satisfy any requirements that the terms of the trust may impose on the exercise of the power; and
(3) To the extent that the appointment is a permissible exercise of the power.
(b) A powerholder's substantial compliance with a formal requirement of appointment imposed by the terms of the trust, including a requirement that the instrument exercising the power of appointment make reference or specific reference to the power, is sufficient if:
(1) The powerholder knows of and intends to exercise the power;
(2) The terms of the trust do not require strict compliance with the formal requirement of appointment imposed by the settlor; and
(3) The powerholder's manner of attempted exercise of the power does not impair a material purpose of the trust.
Source. 2017, 257:28, eff. July 18, 2017.
ARTICLE 11
MISCELLANEOUS PROVISIONS
Section 564-B:11-1101
564-B:11-1101 Uniformity of Application and Construction. –
In applying and construing this chapter, primary consideration shall be given to the preservation of the settlor's intent as expressed in the terms of the trust. Secondary consideration shall be given to the following objectives, in no order of priority among them: (1) the protection of the interests of the beneficiaries consistent with the settlor's intent as expressed in the terms of the trust; (2) the promotion of certainty concerning the duties and liabilities of trustees, trust advisors, and trust protectors, including the division of those duties and liabilities among trustees, trust advisors, and trust protectors; and (3) the promotion of the efficient administration of a trust. Tertiary consideration may be given to the promotion of uniformity of the law with respect to its subject matter among states that enact the uniform act upon which this chapter is based.
Source. 2004, 130:1, eff. Oct. 1, 2004. 2014, 195:31, eff. July 1, 2014.
Section 564-B:11-1102
564-B:11-1102 Electronic Records and Signatures. –
The provisions of this chapter governing the legal effect, validity, or enforceability of electronic records or electronic signatures, and of contracts formed or performed with the use of such records or signatures, conform to the requirements of Section 102 of the Electronic Signatures in Global and National Commerce Act (15 U.S.C. Section 7002) and supersede, modify, and limit the requirements of the Electronic Signatures in Global and National Commerce Act.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:11-1103
564-B:11-1103 Severability Clause. –
If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.
Source. 2004, 130:1, eff. Oct. 1, 2004.
Section 564-B:11-1104
564-B:11-1104 Application to Existing Relationships. –
(a) Except as otherwise provided in this chapter, on the effective date of this chapter:
(1) this chapter applies to all trusts created before, on, or after its effective date;
(2) this chapter applies to all judicial proceedings concerning trusts commenced on or after its effective date;
(3) this chapter applies to judicial proceedings concerning trusts commenced before its effective date unless the court finds that application of a particular provision of this chapter would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the particular provision of this chapter does not apply and the superseded law applies;
(4) any rule of construction or presumption provided in this chapter applies to trust instruments executed before the effective date of this chapter unless there is a clear indication of a contrary intent in the terms of the trust; and
(5) an act done before the effective date of this chapter is not affected by this chapter.
(b) If a right is acquired, extinguished, or barred upon the expiration of a prescribed period that has commenced to run under any other statute before the effective date of this chapter, that statute continues to apply to the right even if it has been repealed or superseded.
Source. 2004, 130:1. 2005, 270:33, eff. Sept. 20, 2005.
ARTICLE 12
TRUST PROTECTORS AND TRUST ADVISORS
Section 564-B:12-1201
564-B:12-1201 Powers of Trust Advisors and Trust Protectors. –
(a) A trust protector or trust advisor is any person, other than a trustee, who under the terms of the trust, an agreement of the qualified beneficiaries, or a court order has a power or duty with respect to a trust, including, without limitation, one or more of the following powers:
(1) the power to modify or amend the trust instrument to achieve favorable tax status or respond to changes in any applicable federal, state, or other tax law affecting the trust, including (without limitation) any rulings, regulations, or other guidance implementing or interpreting such laws;
(2) the power to amend or modify the trust instrument to take advantage of changes in the rule against perpetuities, laws governing restraints on alienation, or other state laws restricting the terms of the trust, the distribution of trust property, or the administration of the trust;
(3) the power to appoint a successor trust protector or trust advisor;
(4) the power to review and approve a trustee's trust reports or accountings;
(5) the power to change the governing law or principal place of administration of the trust;
(6) the power to remove and replace any trust advisor or trust protector for the reasons stated in the trust instrument;
(7) the power to remove a trustee, cotrustee, or successor trustee, for the reasons stated in the trust instrument, and appoint a successor;
(8) the power to consent to a trustee's or cotrustee's action or inaction in making distributions to beneficiaries;
(9) the power to increase or decrease any interest of the beneficiaries in the trust, to grant a power of appointment to one or more trust beneficiaries, or to terminate or amend any power of appointment granted in the trust; however, a modification, amendment or grant of a power of appointment may not grant a beneficial interest in a charitable trust with only charitable beneficiaries to any non-charitable interest or purpose and may not grant a beneficial interest in any trust to the trust protector or trust advisor, or to the estate or for the benefit of the creditors of such trust protector or such trust advisor;
(10) the power to perform a specific duty or function that would normally be required of a trustee or cotrustee;
(11) the power to advise the trustee or cotrustee concerning any beneficiary;
(12) the power to consent to a trustee's or cotrustee's action or inaction relating to investments of trust assets; and
(13) the power to direct the acquisition, disposition, or retention of any trust investment.
(b) To the extent that a trust advisor or trust protector exercises a power in accordance with the terms of the trust, the trust advisor's or trust protector's action is binding upon all other persons.
Source. 2006, 320:67, eff. Aug. 19, 2006. 2008, 374:18, eff. Sept. 9, 2008. 2014, 195:32, eff. July 1, 2014.
Section 564-B:12-1202
564-B:12-1202 Trust Advisors and Trust Protectors as Fiduciaries. –
(a) Except as otherwise provided under the terms of the trust, a trust advisor of a noncharitable trust or trust protector of a noncharitable trust is a fiduciary with respect to each power granted to such trust advisor or trust protector. A trust advisor of a charitable trust or a trust protector of a charitable trust is a fiduciary with respect to each power granted to that trust advisor or trust protector. Notwithstanding the breadth of discretion granted to a trust advisor or trust protector under the terms of the trust, including the use of such terms as "absolute," "sole," or "uncontrolled," a trust advisor or trust protector must exercise a discretionary power and otherwise act in good faith and in accordance with the terms of the trust, the purposes of the trust, and the interests of the beneficiaries.
(b) A trust advisor or trust protector is an excluded fiduciary with respect to each power granted or reserved exclusively to any one or more other trustees, trust advisors, or trust protectors.
Source. 2006, 320:67, eff. Aug. 19, 2006. 2008, 374:18, eff. Sept. 9, 2008. 2014, 195:33, eff. July 1, 2014.
Section 564-B:12-1203
564-B:12-1203 Trust Advisor and Trust Protector Subject to Court Jurisdiction. –
(a) By accepting an appointment to serve as a trust advisor or trust protector of a trust that has its principal place of administration in this state or, in accordance with the terms of the trust or applicable law, changes its principal place of administration to this state, the trust advisor or the trust protector shall be subject to the personal jurisdiction of the courts of this state regarding any matter involving the trust.
(b) An investment advisory agreement or other agreement is void to the extent that it purports to limit the personal jurisdiction of the courts under subsection (a).
Source. 2006, 320:67, eff. Aug. 19, 2006. 2008, 374:18, eff. Sept. 9, 2008. 2017, 257:29, eff. July 18, 2017.
Section 564-B:12-1204
564-B:12-1204 No Duty to Review Actions of Trustee, Trust Advisor, or Trust Protector. –
(a) Whenever, pursuant to the terms of a trust, an agreement of the qualified beneficiaries, or a court order, an excluded fiduciary is to follow the direction of a trustee, trust advisor, or trust protector with respect to investment decisions, distribution decisions, or other decisions of the non-excluded fiduciary, then, except to the extent that the terms of the trust, the agreement of the qualified beneficiaries, or the court order provide otherwise, the excluded fiduciary shall have no duty to:
(1) monitor the conduct of the trustee, trust advisor, or trust protector;
(2) provide advice to the trustee, trust advisor, or trust protector or consult with the trustee, trust advisor, or trust protector; or
(3) communicate with or warn or apprise any beneficiary or third party concerning instances in which the excluded fiduciary would or might have exercised the excluded fiduciary's own discretion in a manner different from the manner directed by the trustee, trust advisor, or trust protector.
(b) Absent clear and convincing evidence to the contrary, the actions of the excluded fiduciary pertaining to matters within the scope of the trustee, trust advisor, or trust protector's authority (such as confirming that the trustee, trust advisor, or trust protector's directions have been carried out and recording and reporting actions taken at the trustee, trust advisor, or trust protector's direction or other information pursuant to RSA 564-B:8-813), shall be presumed to be administrative actions taken by the excluded fiduciary solely to allow the excluded fiduciary to perform those duties assigned to the excluded fiduciary under the terms of the trust, the agreement of the qualified beneficiaries, or the court order, and such administrative actions shall not be deemed to constitute an undertaking by the excluded fiduciary to monitor the trustee, trust advisor, or trust protector or otherwise participate in actions within the scope of the trustee, trust advisor, or trust protector's authority.
Source. 2006, 320:67, eff. Aug. 19, 2006. 2008, 374:18, eff. Sept. 9, 2008.
Section 564-B:12-1205
564-B:12-1205 Fiduciary's Liability for Action or Inaction of Trustee, Trust Advisor, and Trust Protector. –
An excluded fiduciary is not liable for (i) any loss resulting from any action or inaction of a trustee, trust advisor, or trust protector or (ii) any loss that results from the failure of a trustee, trust advisor, or trust protector to take any action proposed by the excluded fiduciary where such action requires the authorization of the trustee, trust advisor, or trust protector, provided that an excluded fiduciary who had a duty to propose such action timely sought but failed to obtain the authorization.
Source. 2006, 320:67, eff. Aug. 19, 2006. 2008, 374:18, eff. Sept. 9, 2008.
Section 564-B:12-1206
564-B:12-1206 Limitation of Action Against a Trust Advisor or Trust Protector. –
(a) A beneficiary shall commence a proceeding against a trust advisor or trust protector for breach of trust within the earlier of:
(1) One year after the date on which the beneficiary or the beneficiary's representative was sent a report that adequately disclosed the existence of a potential claim for breach of trust and informed the beneficiary of the time allowed for commencing a proceeding;
(2) Three years after the date on which the beneficiary or the beneficiary's representative was sent a report that adequately disclosed the existence of a potential claim for breach of trust;
(3) Three years after the trust advisor's or trust protector's resignation or removal;
(4) To the extent that the claim is not barred by a limitation period under RSA 556, RSA 564-B:5-508, or other applicable law, three years after the trust advisor's or trust protector's death;
(5) Three years after termination of the beneficiary's interest in the trust; or
(6) Three years after the termination of the trust.
(b) A fiduciary shall commence a proceeding against a trust advisor or trust protector for breach of trust within 3 years after the date on which the fiduciary was sent a report that adequately disclosed the existence of a potential claim for breach of trust; provided, however, that a fiduciary shall not commence a proceeding against a trust advisor or trust protector for breach of trust if, under subsection (a), none of the beneficiaries may commence a proceeding against the trust advisor or trust protector for such breach of trust. For purposes of this section, a "fiduciary" means any trustee, trust advisor, or trust protector.
(c) A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the recipient knows of the potential claim or should have inquired into its existence.
(d) The periods of limitation under subsection (a) shall not be tolled for any reason, except by a written agreement of the qualified beneficiaries and each of the trust advisors and trust protectors against whom a beneficiary may commence a proceeding or a court order. The periods of limitation under subsection (b) shall not be tolled for any reason, except by a written agreement of the trustees and each of the trust advisors and trust protectors against whom a fiduciary may commence a proceeding or a court order. Without limiting the circumstances under which a court may issue an order tolling the period of limitations, a court may issue an order tolling the period of limitations under this section during the pendency of any action described in RSA 564-B:10-1014(c)(3).
(e) [Repealed.]
(f) For purposes of determining whether, for purposes of this section, a trust has terminated or a beneficiary's interest in a trust has terminated, trust property excludes any claim against a trustee, trust advisor, or trust protector.
Source. 2011, 243:14, eff. Sept. 11, 2011. 2014, 195:39, III, eff. July 1, 2014. 2015, 272:56, eff. Sept. 25, 2015. 2017, 257:30, eff. July 18, 2017.
Section 564-B:12-1207
564-B:12-1207 Office of the Trust Advisor or Trust Protector. –
(a) A trust advisor or trust protector is subject to the same rules to which a sole trustee would be subject under this chapter in the same circumstances with respect to the following:
(1) Accepting or declining his, her, or its appointment;
(2) Vacancy and appointment of a successor;
(3) Resignation;
(4) Removal; and
(5) Compensation.
(b) A trust advisor or trust protector shall not have an obligation to give bond to secure performance of his, her, or its duties.
(c) Subject to this article 12, a trust advisor or trust protector is subject to the same rules as a sole trustee would be subject under this chapter in the same circumstances with respect to exoneration and indemnification.
Source. 2017, 257:31, eff. July 18, 2017.
Section 564-B:12-1208
564-B:12-1208 Delegation to an Agent. –
(a) A trust advisor or trust protector may delegate to any person, even if that person is associated or affiliated with the trust advisor or trust protector, any duty or power that a prudent trust advisor or trust protector of comparable skills and having the same power or duty could properly delegate under the circumstances.
(b) In delegating to an agent, a trust advisor or trust protector shall exercise reasonable care, skill, and caution in:
(1) Selecting an agent;
(2) Establishing the scope and terms of the delegation, consistent with the trust's purposes and the terms of the trust; and
(3) Periodically reviewing the agent's actions for the purpose of monitoring the agent's performance and compliance with the scope and terms of the delegation.
(c) The exercise of a power includes the performance of any function involving that power.
(d) A trust advisor or trust protector who complies with subsections (a) and (b) is not liable to the beneficiaries or to the trust for an action of the agent to whom the power or duty was delegated.
(e) In performing a delegated duty of power, an agent owes a duty to the trust to exercise reasonable care to comply with the scope and terms of the delegation.
(f) A trust advisor's or trust protector's delegation of a duty, power, or function to an agent under a power of attorney shall not be valid unless the power of attorney expressly refers to the trust advisor or trust protector in his, her, or its capacity as a trust advisor or trust protector of the trust.
(g) In the case of a trust advisor or trust protector who is an individual, the trust advisor's or trust protector's delegation of any duty, power, or function to an agent under a power of attorney shall terminate upon the trust advisor's or trust protector's incapacity unless:
(1) The terms of the trust provide that the delegation may remain effective during the trust advisor's or trust protector's incapacity; and
(2) The power of attorney provide that the delegation does not terminate upon the trust advisor's or trust protector's incapacity.
(h) By accepting a delegation of any duty or power from a trust advisor or trust protector of a trust that has its principal place of administration in this state or subsequently changes its principal place of administration to this state, an agent shall be subject to the personal jurisdiction of the courts of this state regarding any matter involving the trust.
(i) This section does not apply to the delegation of a duty or power to a trustee, trust advisor, or trust protector to the extent that, under the terms of the trust, the trustee, trust advisor, or trust protector is vested with the delegated duty or power.
Source. 2017, 257:31, eff. July 18, 2017.
Section 564-B:12-1209
564-B:12-1209 Delegation to a Trustee, Trust Advisor, or Trust Protector. –
(a) Subject to subsection (b), a trust advisor or trust protector may delegate to any trustee, trust advisor, or trust protector, even if that person is associated or affiliated with the trust advisor or trust protector, any duty or power that a prudent trust advisor or trust protector of comparable skills could properly delegate under the circumstances.
(b) A trust advisor or trust protector may not delegate any duty or power that the settlor reasonably expected the trust advisor or trust protector to perform jointly with each trustee, trust advisor, and trust protector who also is vested with that duty or power.
(c) The exercise of a power includes the performance of any function involving that power.
(d) Unless a delegation was irrevocable, a trust advisor or trust protector may revoke a delegation previously made.
Source. 2017, 257:31, eff. July 18, 2017.
Section 564-B:12-1210
564-B:12-1210 Employing Attorneys, Agents, and Other Persons. –
(a) A trust advisor or trust protector shall have the power to employ any attorney or other person, even if the person is affiliated or associated with the trust advisor or trust protector, to advise the trust advisor or trust protector in the performance of the trust advisor's or trust protector's duties.
(b) To the extent consistent with the scope and nature of a trust advisor's or trust protector's powers and duties under the terms of the trust, the trust advisor or trust protector shall have the power to employ any agent or other person, even if the person is affiliated or associated with the trust advisor or trust protector, to assist the trust advisor or trust protector in the performance of the trust advisor's or trust protector's duties.
(c) The reasonable compensation of a person whom a trust advisor or trust protector employs under subsection (a) or (b) is an expense incurred in the administration of the trust.
Source. 2017, 257:31, eff. July 18, 2017.