Tuesday, June 27, 2006
The Trust Modernization and Competitiveness Act, SB 394, passed by both houses of New Hampshire's legislature this past April, amends the state's current trust statute in order to make New Hampshire more attractive for those individuals establishing or servicing trusts. Backers of the bill argue that the new legislation, along with the state's lack of income tax and already favorable trust laws, will benefit New Hampshire by potentially creating new jobs and millions in state business tax revenue. The legislation streamlines the application process for the formation of trust companies and clarifies the authority of these companies, conferring upon them the power and privileges applicable to a limited liability corporation. The statute provides for the appointment of Trust Protectors and Trust Advisors and states that Trustees are not responsible for the acts of such Protectors and Advisors. The provisions of the Uniform Principal and Income Act, including the Power to Adjust, are adopted in the New Hampshire Act. The Act also allows for the formation of "Family Fiduciary Services Companies"--entities which specifically service one or more family members rather than the general public. Though these new companies would not be allowed to take deposits or make loans, the law essentially allows any family with $500,000 in start-up capital to form their own private trust company to manage and control the family's wealth. A final key provision of the law includes additions, ensuring that confidential information only be shared with state and federal regulators.