6 Reasons to Administer Trusts in New Hampshire
We are committed to offering our clients the most effective and advantageous estate planning solutions. That’s why we established a branch in Concord, New Hampshire. This locale provides access to New Hampshire’s trust laws, which are among the most favorable in the country, particularly for irrevocable trusts. Even if you live in Massachusetts, you can administer your trust in New Hampshire, unlocking unique benefits.
Six Estate Planning Benefits of Administering Your Trust in New Hampshire
- Self-Settled Trusts (Asset Protection Trusts)
New Hampshire allows for self-settled trusts, also known as Domestic Asset Protection Trusts (DAPT’s). In these trusts, the grantor can benefit from the principal while protecting the assets from creditors. This type of trust is not available in Massachusetts. - “New HING” trusts (New Hampshire Incomplete gift Non-Grantor Trusts)
Non-Grantor Trusts are a tax-saving strategy for high-income individuals in states with high income taxes. By transferring assets to a non-grantor trust in New Hampshire, individuals can effectively shift income away from their personal tax returns and into the trust. This allows them to avoid paying state income taxes on the trust’s income.
This strategy comes with a trade-off: Unless the income is distributed to beneficiaries, the tax on the trust income will default to the highest federal income tax rate. The decision to use an ING trust in any state with no tax on trust income depends on several factors, including the grantor’s income level, the state’s income tax rate, and their overall financial goals. For individuals in high-tax states with significant income, the potential tax savings from an ING trust may outweigh the risk of the higher federal tax rate. Coupled with the DAPT features, this trust is powerful indeed. - Fixing “Broken” Trusts
New Hampshire law includes tools like non-judicial settlement agreements and trust decanting, which allow for changes to irrevocable trusts without court intervention. These provisions can help “fix” a trust that no longer serves its intended purpose. - Directed Trusts
In a directed trust, the responsibilities of administering the trust are divided among different trustees or trust directors. For example, one trustee may manage investments while another handles distributions. This separation allows for specialized management of trust assets, ensuring that each aspect of the trust is managed by the most qualified person or entity. Division of responsibilities also reduces the cost of trustee services in most cases. - Trust Protectors
New Hampshire’s laws surrounding a Trust Protector are very flexible. A Trust Protector can be appointed to oversee the actions of the trustees and has the authority to remove or replace them if needed. This added level of oversight can be invaluable for long-term trust management and ensuring that your wishes are followed. Protectors are not mentioned in Mass. Law, per se. - Generation-Skipping Benefits
One of New Hampshire’s most attractive features for estate planning is the absence of a rule against perpetuities, allowing trusts to continue indefinitely, much like a corporation. This means that assets within the trust can benefit future generations without being taxed as part of their estates. This can save your heirs money over time, if they live in a state with high income taxes.
By administering your trust in New Hampshire, you can take advantage of significant legal and financial benefits, even if you live in another state like Massachusetts. With favorable laws that protect assets, allow for flexible trust modifications, and provide long-term tax savings, New Hampshire trusts offer robust solutions for your estate planning needs.
If you would like to discuss the benefits of administering your trust in New Hampshire, please schedule a 15 complimentary appointment with one of our Senior Paralegals.
