News & Library

Decanting Trusts in New Hampshire

New Hampshire has one of the most flexible and versatile decanting statutes in the nation. Through decanting, a trustee can often eliminate impediments to sound investment or trust administration, better protect trust assets for a family’s benefit, resolve ambiguities and potential disputes, and improve administrative efficiencies. In short, decanting offers trustees a way to fix and modernize trusts that are either not operating as the settlor intended, or not operating at peak efficiency. THE PROCESS OF DECANTING The process of decanting in New Hampshire is straightforward. After creating a new trust instrument that accomplishes what the original trust could not, a trustee may appoint some or all of the assets of the original trust into the new trust. The new trust then governs the management and disposition of those trust…

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Using Quiet Trusts to Accomplish Wealth Transfer Goals

While a trustee generally has a duty to keep beneficiaries informed about a trust and its administration, New Hampshire allows a settlor to modify or waive the trustee’s duty to inform. Using a New Hampshire trust, a settlor can eliminate a trustee’s reporting and disclosure requirements if he or she wishes to withhold knowledge of the trust’s existence, its terms, or the details of its holdings. This can prove especially beneficial for families who are concerned that knowledge of significant wealth may undermine productivity, create a sense of entitlement, or otherwise harm a beneficiary. HOW QUIET TRUSTS HELP ACHIEVE PLANNING GOALS Many settlors are turning to New Hampshire to create “quiet” or “silent” trusts under which the trustee does not have any duty to inform beneficiaries about the existence or…

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Mitigating the Impact of State Income Taxes

Using New Hampshire Trusts to Mitigate the Impact of State Income Taxes In addition to federal income tax imposed on trusts, the rules for state income taxation are quite varied and can reach as high at 10%. Establishing a trust in a jurisdiction that permits a trust to grow without payment of a fiduciary income tax can provide a significant economic advantage to the trust’s beneficiaries. With no state fiduciary income tax, New Hampshire relieves the burden of state income tax and allows trusts to grow far more significantly than other jurisdictions without such favorable tax treatment. State Income Tax Savings Example 1: Assumptions: Settlor gifts $5 million to a trust, which is invested for growth and produces 6% annual rate of return: 2% of the return is considered ordinary…

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