Asset protection trusts are created for a variety of important estate planning purposes.
Typically the primary purpose for using a trust has been for probate avoidance, minimizing taxation or providing for the management of property held for the benefit of certain beneficiaries. Planning opportunities in which the benefits of using a trust as an asset protection tool are frequently overlooked.
New Hampshire is one of the few states in which the transferor may create a self-settled asset protection trust enabling the transferor to shield assets from creditors while still being able to benefit personally from the assets transferred to the trust.
In order to be effective, an asset protection trust instrument must:
– Be irrevocable;
– Contain a “spendthrift” clause;
– Appoint at least one “qualified” New Hampshire Trustee;
– State that New Hampshire law governs the validity, construction, and administration of the trust (except for trusts which have “migrated” from another state to New Hampshire.
The transferor may still receive distributions of income and principal from the trust and maintain control over trust investment decisions.
The requirements for a “qualified” New Hampshire trustee are that the trustee must be a resident of New Hampshire (in the case of a natural person) or a state or federally chartered bank or trust company having a place of business in the state, authorized to engage in trust business in New Hampshire along with various other recordkeeping and administrative requirements.
New Hampshire law bars creditor claims against property held by an asset protection trust if the claim arises after the date property is placed in trust and the claim is brought after the fourth anniversary of the date of such placement.
Many businesses and entrepreneurs can benefit from this increasingly common estate planning instrument.
At Welts, White & Fontaine, P.C. our lawyers have experience representing clients to plan their estates to avoid probate and protect their assets from creditors. We can help you develop strategies for a successful navigation of New Hampshire’s estate planning landscape. Please contact Attorney John Polgrean if you have questions or concerns about your estate planning matters (603) 883-0797 firstname.lastname@example.org
Author: John Polgrean
This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion.