The New Hampshire Investment Trust Act
The New Hampshire Investment Trust Act, enacted in 2005 and subsequently updated, provides a statutory framework for the creation, operation, and regulation of investment trusts within the state. This legislation aims to attract investment and trust business to New Hampshire by offering a modern and flexible structure for managing assets, while simultaneously protecting the interests of beneficiaries and investors.
One of the key features of the Act is its recognition of the directed trust. This allows for the separation of trustee responsibilities, enabling a trust protector or investment advisor to direct investment decisions while a traditional trustee focuses on administrative duties and fiduciary oversight. This delegation of authority caters to sophisticated investors who desire greater control over their asset allocation and investment strategies. The Act outlines specific responsibilities and liabilities of each party involved, clarifying the roles and ensuring accountability.
The Act also addresses decanting, a process that permits the modification of an irrevocable trust by transferring its assets to a new trust with more favorable terms. New Hampshire’s legislation provides clear rules and safeguards for decanting, ensuring that the process is conducted fairly and in accordance with the grantor’s intent and the beneficiaries’ best interests. This flexibility allows trusts to adapt to changing circumstances, tax laws, and beneficiary needs without resorting to costly and time-consuming court proceedings.
Furthermore, the New Hampshire Investment Trust Act features provisions designed to enhance privacy and asset protection. It outlines specific rules regarding the confidentiality of trust information and establishes procedures for addressing creditor claims. These provisions make New Hampshire a particularly attractive jurisdiction for individuals and families seeking to protect their wealth from potential liabilities.
The Act also offers considerable flexibility in terms of trust duration, including the possibility of perpetual trusts, which can continue indefinitely. This appeals to families seeking to preserve wealth across generations. However, the Act balances this extended duration with safeguards to prevent potential issues associated with long-term control and to ensure that the trust continues to serve a beneficial purpose.
Overall, the New Hampshire Investment Trust Act provides a comprehensive and forward-thinking framework for investment trusts. By offering flexibility in investment management, decanting, and trust duration, while also emphasizing privacy, asset protection, and beneficiary protection, the Act has positioned New Hampshire as a prominent jurisdiction for trust and estate planning.
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