Innovation or a Race to the Bottom? Trust Modernization in New Hampshire

[Excerpt] “Late last summer, Governor Lynch signed into law Senate Bill 465, designed to further update New Hampshire‘s trust law. This bill follows similar legislation in Alaska, Delaware, Nevada, and several other states. It adds major new provisions to the existing statutory framework for irrevocable trusts. The bill allows for the creation of so-called self-settled asset protection trusts or domestic asset protection trusts (DAPTs). DAPTs represent the latest chapter in our State‘s move away from traditional trust and estate principles towards a system of dynastic and (theoretically) creditor-proof trusts. This legislation results from New Hampshire‘s desire to retain and attract trust activity. Effective January 2, 2009, the new Qualified Dispositions in Trust Act allows beneficiaries to ―self settle‖ irrevocable spendthrift trusts—for example, put assets into trust for their own benefit, while placing those assets, in many circumstances, out of the reach of most creditors. This article will attempt to answer some questions about these trusts. Will RSA 564–D succeed in increasing New Hampshire‘s share of the domestic trust business? Will these new trusts prove to be effective against creditors? Finally, what are the policy implications of these new trusts?