Section 564-B:4-418 Trustee's Authority to Decant Trust. - New Hampshire Statutes

      (a) Unless the terms of the trust expressly provide otherwise, a trustee with the discretion to make distributions to or for the benefit of one or more beneficiaries of a trust (the ""first trust'') may exercise that discretion by appointing the property subject to that authority in favor of another trust for the benefit of one or more of those beneficiaries (the ""second trust'').
      (b) Notwithstanding the provisions of paragraph (a), the trustee may not decant property of the first trust in favor of the second trust under any of the following circumstances:
         (1) the second trust includes a beneficiary that is not a beneficiary of the first trust. For purposes of this subparagraph, a permissible appointee of a power of appointment held by a beneficiary of the second trust is not considered to be a beneficiary of the second trust;
         (2) the exercise of the power to decant will reduce any current fixed income interest, annuity interest, or unitrust interest of a beneficiary of the first trust;
         (3) a contribution to the first trust qualified for a marital or charitable deduction for federal or state income, gift, or estate tax purposes or qualified for a gift tax exclusion for federal or state gift tax purposes, while the terms of the second trust include a provision which, if included in the terms of the first trust, would have prevented the first trust from qualifying for the deduction or exclusion;
         (4) the property is subject to a presently exercisable power of withdrawal held by a beneficiary of the first trust; or
         (5) under the terms of the second trust:
            (A) discretionary distributions may be made to a beneficiary or among a group of beneficiaries of the first trust;
            (B) the distributions are not limited by an ascertainable standard; and
            (C) the beneficiary or group of beneficiaries has the power to remove and replace the trustee of the second trust with the beneficiary or a member of the group of beneficiaries or with a trustee that is related or subordinate to the beneficiary or a member of the group of beneficiaries (as defined in section 672(c) of the Internal Revenue Code).
      (c) Notwithstanding the provisions of paragraph (a), a trustee who is a beneficiary of the first trust may not exercise the authority to appoint property of the first trust in favor of the second trust under any of the following circumstances:
         (1) under the terms of the first trust or pursuant to the law governing the administration of the first trust:
            (A) such trustee of the first trust does not have the discretion to make or participate in making distributions to himself or herself;
            (B) such trustee's discretion to make or participate in making distributions to himself or herself is limited by an ascertainable standard; or
            (C) such trustee's discretion to make or participate in making distributions to himself or herself is exercisable only with the consent of a cotrustee or another person holding an adverse interest; while under the terms of the second trust, such trustee's discretion to make or participate in making distributions to himself or herself is not limited by an ascertainable standard and is exercisable without the consent of a cotrustee or another person holding an adverse interest; or
         (2) under the terms of the first trust or pursuant to the law governing the administration of the first trust, such trustee of the first trust does not have the discretion to make or participate in making distributions in a manner that will discharge such trustee's legal support obligations, while under the terms of the second trust, such trustee's discretion is not so limited.
      (d) The trustee of the first trust shall notify in writing the director of charitable trusts of a proposed appointment in favor of a second trust at least 30 days in advance of the proposed appointment if, at the time the appointment is being proposed:
         (1) at least one charitable organization has the rights of a qualified beneficiary of the first trust; or
         (2) the director of charitable trusts has the rights of a qualified beneficiary of the first trust.
      (e) This section does not abrogate the trustee's duty under RSA 564-B:8-801.
      (f) This section does not impose on a trustee a duty to exercise a power to decant in favor of another trust or to consider exercising a power to decant in favor of another trust.
      (g) A power to decant is not a power to amend the trust. Accordingly, a trustee is not prohibited from decanting property in favor of another trust solely because the first trust is irrevocable or the terms of the first trust provide that it may not be amended.
      (h) A trustee's authority to decant property to another trust under this section is not limited or prohibited by a spendthrift provision in the first trust.

Source. 2008, 374:9, eff. Sept. 9, 2008.