Over the last several years, the New Hampshire legislature has passed a number of bills regarding Trusts which has made our State one of the most innovative when it comes to creating and administering Trusts. This trend continued in the last legislative session with the passage of an amendment to the New Hampshire Uniform Trust Code. The new law provides a number of enhancements to our Trust laws, including the following:
1. Decanting and Trust Modification. The term “decanting” refers to a process whereby a Trustee can transfer trust assets from an existing trust to a new trust, particularly to fix administrative problems which may exist in the original trust. The new law has expanded the number of situations in which a Trustee can make use of this procedure. In addition, it expands the ability of Trustees to modify the terms of a trust in certain situations. However, the law also clarifies that the Trustee cannot make changes which violate the purpose of the original Trust or the intent of its creator.
2. Attorney-Client Privilege between Lawyers and Trustees. The new law confirms that where an attorney’s client is a Trustee, the attorney-client privilege applies to matters pertaining to the administration of the Trust. Prior to this law, there was some question about whether a Trustee could assert this privilege against the beneficiaries of a Trust.
3. Nonjudicial Dispute Resolution. If the terms of a Trust call for nonjudicial resolution of disputes (such as arbitration or mediation), then the new law requires the interested parties to follow those terms. The use of such procedures should save time and money for beneficiaries when a conflict arises.
Contact our office if you have questions about these Trust laws and how a Trust could be beneficial to you and your family.