New Hampshire Enhances Its Trust Laws, Bolstering Protections for Settlor Intent

Share Article

As one of the best states for trusts and trust companies, New Hampshire continues to improve its laws. In this latest move, the state enacts a law that the New Hampshire Trust Council developed and supported.

New Hampshire Trust Council

New Hampshire has enacted a law that reinforces the protection of settlor intent, reduces the potential for costly and protracted trust disputes, and expands the tools for modifying and administering trusts. The New Hampshire Trust Council developed and supported the new law.

Under the new law, a court must give primary consideration to preserving the intentions of the trust’s creator – often called the trust’s settlor – when applying and interpreting the state’s trust laws. The new statute echoes a long-standing judicial tradition in the state.

“While other states recently have eroded the protections for settlor intent, New Hampshire continues to strengthen those protections,” said Todd D. Mayo, president of the New Hampshire Trust Council and principal of Perspecta Trust. “This is important for any individual who, when creating a trust, wants to ensure that his or her wishes will be fulfilled – especially in light of a trust’s potential to last for generations.”

Additionally, under a new judicial procedure created by the new law, an individual who creates a trust can ask a court to declare that the trust is valid. By declaring a trust valid, the court’s ruling eliminates post-death trust contests. Thus, the new procedure potentially avoids expensive and time-consuming litigation after the individual’s death. The new procedure can be especially useful if a settlor wishes to design the trust or divide trust assets in a way that might provoke a family member or someone else to contest the trust.

“The individual who creates a trust is the best witness for the validity of that trust,” said Sally Mulhern, a partner in the law firm of Mulhern & Scott, which is a member of the New Hampshire Trust Council. “With our new statute, the best witness is able to testify about the trust and its creation, allowing court approval of the validity of the trust during his or her lifetime.”

The new law also creates a similar procedure for declaring an individual’s will to be valid during his or her lifetime – a process that would reduce or eliminate the potential of later will contests.

The new law also further expands the state’s trust decanting statute. Used as a tool for modernizing or fixing existing trusts, decanting provides trustees with the ability to resolve ambiguities, improve inefficiencies, and better manage and protect trust assets. Further, the new law also enforces arbitration procedures in trusts and protects communications between trustees and their attorneys. The new law also provides more efficient procedures for winding up a trust after the settlor’s death or the trust’s termination.

New Hampshire is a leading state for trusts and trust companies, and this law reflects the state’s commitment to maintain its leadership status. The law is the ninth major piece of trust-related legislation that New Hampshire has adopted within the past decade. The state’s attractiveness stems from its innovative laws and favorable tax climate. The state’s trust laws, for example, allow more creative trust design and facilitate more efficient trust administration. Coupled with those laws, the state also does not impose any income tax on nongrantor trusts. New Hampshire also is the only state with a trust court, a specialty court focusing only complex trust disputes.

The New Hampshire Trust Council has published a summary of the new law. The summary is available on its web site.

About the New Hampshire Trust Council

The New Hampshire Trust Council is a consortium of trust companies, law firms, and other industry leaders dedicated to promoting New Hampshire’s trust services industry. The Trust Councils’ members include Perspecta Trust (the founding member), Charter Trust Company, Cleveland, Waters and Bass, Concord Trust Company, Financial Architects Partners, Hemenway & Barnes, Holland & Knight, Mulhern & Scott, and Rath, Young and Pignatelli. For more information, see

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Todd D. Mayo
Visit website