Revision: Jan. 18, 2019, 2:31 p.m.
SB 98 - AS INTRODUCED
2019 SESSION
19-0909
08/01
SENATE BILL 98
AN ACT clarifying the New Hampshire trust code.
SPONSORS: Sen. D'Allesandro, Dist 20; Sen. Bradley, Dist 3
COMMITTEE: Commerce
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ANALYSIS
This bill makes certain changes to the New Hampshire trust code.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
19-0909
08/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nineteen
AN ACT clarifying the New Hampshire trust code.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Purpose. The general court finds:
I. The fiduciary services sector is an important and growing part of this state's economy. The sector provides well-paying jobs for trust, investment, legal, accounting, and other professionals.
II. Through the development of thoughtful, innovative laws, New Hampshire has become one of the best legal environments for trusts, trust companies, and fiduciary services. This legal environment attracts individuals and families to this state for the purposes of creating new trusts or administering existing trusts, thereby supporting and encouraging the growth of this state's fiduciary services sector.
III. Continuing New Hampshire's firm commitment to being one of the best legal environments for trusts, trust companies, and fiduciary services, this act further reinforces this state's tradition of protecting settlor intent, and it further facilitates the efficient administration of trusts.
2 New Section; New Hampshire Trust Code; Precatory Language. Amend RSA 564-B by inserting after section 1-112 the following new section:
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.
3 New Hampshire Trust Code; Creditor's Claim Against a Beneficiary of a Discretionary Trust. Amend RSA 564-B:5-504(e)(3)(B) to read as follows:
(B) The maximum amount of trust property that can be distributed to or for the benefit of the [settlor] beneficiary from the trust.
4 New Hampshire Trust Code; Specific Powers of Trustee. Amend RSA 564-B:8-816(a)(19) to read as follows:
(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;
5 New Section; New Hampshire Trust Code; Limitation on Personal Liability of Settlors. Amend RSA 564-B by inserting after section 5-510 the following new section:
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.
I. Section 3 of this act shall take effect upon its passage.
II. The remainder of this act shall take effect 60 days after its passage.