News & Library

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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Using Trust Protectors

In the governance of a trust, a trust protector can play a valuable role. A trust protector traditionally supervises a trustee. A trust protector simultaneously may help to ensure that the settlor’s intent or the trust’s purposes are being fulfilled. TRUST PROTECTOR POWERS A trust protector’s role is defined by the terms of the trust. Unlike a trustee, a trust protector does not have any statutory powers. In the traditional model of a trust protector, the trust protector supervises the trustee. In that model, a trust protector functions like a company’s board of directors, and the trustee functions like the company’s management. Accordingly, a trust protector’s powers often include the following powers: Power to remove a trustee Power to appoint a trustee In some instances, a trust protector may have…

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