N.H. Rev. Stat. § 564-B:8-814 — NH Code / Title LVI / Chapter 564-B / Section 8-814
564-B:8-814 Discretionary Powers; Tax Savings.
Status: in_force

(a) Notwithstanding the breadth of discretion granted to a trustee, trust advisor, or trust protector, individually or collectively referred to in this section as a "fiduciary", whether or not exercising fiduciary powers, in the terms of the trust, including the use of such terms as "absolute," "sole," or "uncontrolled," the fiduciary shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries. (b) Subject to the provisions of paragraph (a), if a distribution to or for the benefit of a beneficiary is subject to the exercise of the fiduciary's discretion, whether or not the terms of a trust include a standard to guide the fiduciary in making distribution decisions, then the beneficiary's interest is neither a property interest nor an enforceable right, but a mere expectancy. (c) Subject to the provisions of paragraph (a), unless the terms of the trust expressly provide otherwise, if the terms of a trust permit distributions among a class of beneficiaries, distributions to or for the benefit of whom are subject to the exercise of the fiduciary's discretion without a standard to guide the fiduciary in making distribution decisions, then the fiduciary may make distributions unequally among the beneficiaries and may make distributions entirely to one beneficiary to the exclusion of the other beneficiaries. (d) Subject to paragraph (f), and unless the terms of the trust expressly indicate that a rule in this paragraph does not apply: (1) A person other than a settlor who is a beneficiary and fiduciary of a trust that confers on the fiduciary a power to make discretionary distributions to or for the fiduciary's personal benefit may exercise the power only in accordance with an ascertainable standard; and (2) A fiduciary may not exercise a power to make discretionary distributions to satisfy any legal obligation the fiduciary personally owes another person, including a legal obligation of support. (3) A beneficiary of a trust acting in any capacity may not remove a fiduciary and replace such fiduciary with a fiduciary who is related or subordinate to the beneficiary within the meaning of section 672(c) of the Internal Revenue Code unless: (A) The fiduciary's discretionary power to make distributions to or for the benefit of the beneficiary is limited by an ascertainable standard; (B) The fiduciary's discretionary power may not be exercised to satisfy any of the beneficiary's legal obligations for support or other purposes; and (C) The fiduciary's discretionary power may not be exercised to grant to the beneficiary a general power to appoint property of the trust to the beneficiary, the beneficiary's estate, or the creditors thereof within the meaning of section 2041 of the Internal Revenue Code; (4) Subparagraph (3) shall not apply if the appointment of the fiduciary by the beneficiary may be made only in conjunction with another person having substantial interest in the property of the trust subject to the power which is adverse to the exercise of the power in favor of the beneficiary within the meaning of section 2041(b)(1)(C)(ii) of the Internal Revenue Code. (e) A power,the exercise of which is limited or prohibited by paragraph (d), may be exercised by a majority of the remaining fiduciaries whose exercise of the power is not so limited or prohibited. If the power of all fiduciaries is so limited or prohibited, the court may appoint a special trustee with authority to exercise the power. (f) Paragraph (d) does not apply to: (1) a power held by the settlor's spouse who is the fiduciary of a trust for which a marital deduction was previously allowed under section 2056(b)(5) or 2523(e) of the Internal Revenue Code; (2) any trust during any period that the trust may be revoked or amended by its settlor; or (3) a trust if contributions to the trust qualify for the annual exclusion under section 2503(c) of the Internal Revenue Code.