IRREVOCABLE TRUST AGREEMENT
(New Hampshire)
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Creation and Funding
3.2 Irrevocability
3.3 Dispositive Provisions
3.4 Trustee Powers
3.5 Successor Trustees - Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
- Schedules & Exhibits
1. DOCUMENT HEADER
This Irrevocable Trust Agreement (“Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and among:
• [SETTLOR NAME], an individual residing at [ADDRESS] (“Settlor”);
• [TRUSTEE NAME], [individual / New Hampshire trust company / other], with a principal office at [ADDRESS] (“Trustee”); and
• The persons or entities listed on Schedule 1 attached hereto (each, a “Beneficiary,” and collectively, the “Beneficiaries”).
Recitals
A. Settlor desires to create an irrevocable trust—to be known as the [TRUST NAME] (the “Trust”)—for the benefit of the Beneficiaries.
B. Trustee is willing to hold, administer, and distribute the Trust Estate (as defined below) in accordance with the terms of this Agreement and the laws of the State of New Hampshire, including the New Hampshire Uniform Trust Code, N.H. Rev. Stat. Ann. (“RSA”) § 564-B (the “NH UTC”).
Accordingly, in consideration of the mutual covenants herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows.
[// GUIDANCE: Insert notary block and witnesses if the chosen county probate practice or the nature of conveyed assets requires acknowledgment under RSA 456-B or real-property recording statutes.]
2. DEFINITIONS
For purposes of this Agreement, capitalized terms have the meanings set forth below. Terms defined in the singular include the plural and vice-versa; pronouns include all genders unless the context clearly requires otherwise.
“Accountant” – The certified public accountant engaged from time to time by the Trustee for Trust tax and accounting matters.
“Agreement” – This Irrevocable Trust Agreement, including all Schedules and Exhibits, as amended or restated in strict accordance with Section 9.1.
“Beneficiary” / “Beneficiaries” – The person(s) or entity(ies) identified on Schedule 1, together with any Additional Beneficiary designated pursuant to Section 3.3.5.
“Code” – The Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.
“NH UTC” – The New Hampshire Uniform Trust Code, RSA § 564-B et seq.
“Person” – Any individual, corporation, partnership, limited liability company, association, estate, trust, or other legal entity.
“Trust” – The trust created under this Agreement.
“Trust Estate” – All property, tangible or intangible, real or personal, transferred to the Trustee from any source, together with all accumulations, reinvestments, substitutions, and proceeds thereof.
3. OPERATIVE PROVISIONS
3.1 Creation and Funding
3.1.1 Establishment. Settlor hereby transfers, assigns, and delivers to Trustee the property described on Exhibit A (the “Initial Corpus”), receipt of which Trustee hereby acknowledges. The Initial Corpus together with all additions thereto shall constitute the Trust Estate.
3.1.2 Additional Contributions. Any Person may irrevocably transfer additional property to the Trustee, provided the Trustee consents in writing and references this Agreement.
[// GUIDANCE: Use separate assignment or deed for real property; record as required by RSA 477 for conveyances.]
3.2 Irrevocability
3.2.1 No Revocation or Amendment. This Trust is irrevocable. Settlor retains no power to revoke, amend, or terminate the Trust, nor any right to direct, consent to, or veto distributions, except (i) those limited powers explicitly set forth in Section 3.3.5 (appointment of Additional Beneficiary) and Section 3.4.4 (investment recommendations), each intended to qualify as non-general powers of appointment under 26 U.S.C. § 2041(b).
3.2.2 Statutory Modifications. Notwithstanding Section 3.2.1, the Trust may be modified or terminated (a) by non-judicial settlement agreement under RSA § 564-B:1-111, or (b) by court order under RSA § 564-B:4-410 through 4-412, but only to the extent such action is consistent with Settlor’s material purpose of establishing an irrevocable, asset-protected, discretionary trust.
3.2.3 Reformation for Tax Qualification. If at any time the Trust would fail to qualify for the intended federal or New Hampshire tax treatment, Trustee may petition the [COUNTY] Probate Court for reformation solely to the minimum extent necessary to obtain or preserve such treatment.
3.3 Dispositive Provisions
3.3.1 Income. Commencing on the Effective Date, Trustee may, in Trustee’s sole and absolute discretion, pay or apply so much of the Trust’s net income to or for the benefit of one or more Beneficiaries as Trustee deems advisable for their health, education, maintenance, or support (“HEMS Standard”). Any undistributed income shall be added to principal annually.
3.3.2 Principal. Trustee may distribute principal for the same HEMS Standard, or for any purpose Trustee considers to be in a Beneficiary’s best interests. No distribution shall be made that would, in the Trustee’s reasonable judgment, expose the Trust Estate to avoidable creditor claims.
3.3.3 Mandatory Termination. The Trust shall terminate on the earlier of (a) twenty-one (21) years after the death of the last surviving descendant of [REFERENCE PERSON] living on the Effective Date; or (b) the date on which the Trust Estate has been fully distributed pursuant to this Section 3.3. Upon termination, Trustee shall distribute the remaining Trust Estate outright, per stirpes, to the then-living Beneficiaries.
3.3.4 Spendthrift Protection. All interests of Beneficiaries are held subject to a spendthrift provision as defined in RSA § 564-B:5-502. No Beneficiary may voluntarily or involuntarily transfer, assign, or encumber any interest in the Trust prior to actual receipt.
3.3.5 Limited Power to Add Beneficiaries. Settlor reserves a limited, non-fiduciary power, exercisable solely by written, notarized instrument delivered to Trustee, to designate as an “Additional Beneficiary” any descendant (by blood or adoption) of Settlor or any qualified charitable organization described in 26 U.S.C. § 170(c). Such power shall not be exercisable in favor of Settlor, Settlor’s estate, Settlor’s creditors, or the creditors of Settlor’s estate.
[// GUIDANCE: The above limited power avoids creating a retained “incident of ownership” for estate-tax purposes under 26 U.S.C. § 2036.]
3.4 Trustee Powers
3.4.1 In General. Trustee shall have all powers granted to trustees under the NH UTC, RSA § 564-B:8-801 et seq., and any other power reasonably necessary to administer the Trust, including without limitation:
a. Invest and reinvest, without regard to diversification norms or statutes, provided Trustee reasonably determines that the overall investment strategy is prudent;
b. Retain any asset contributed by Settlor, including closely-held business interests, regardless of its proportionate value of the Trust Estate;
c. Participate in partnerships, LLCs, joint ventures, and exercise related rights;
d. Lease, sell, exchange, partition, or otherwise dispose of Trust property;
e. Borrow money, encumber Trust property, and grant security interests;
f. Employ and compensate accountants, attorneys, custodians, investment advisers, and other professionals;
g. Defend or prosecute claims related to the Trust.
3.4.2 Delegation. Trustee may delegate investment or management functions to a qualified agent in accordance with RSA § 564-B:9-901, provided Trustee exercises reasonable care, skill, and caution in selecting and monitoring such agent.
3.4.3 Special Investment Adviser. Settlor may, by separate writing, appoint a Special Investment Adviser with authority to direct Trustee on investment and voting matters. Trustee shall have no liability for acting pursuant to such directions except in cases of the Trustee’s own willful misconduct.
3.4.4 Settlor Recommendations. Settlor may transmit nonbinding, precatory investment recommendations to Trustee, but such recommendations shall create no power retained by Settlor and impose no fiduciary duty on Trustee to follow them.
3.5 Successor Trustees
3.5.1 Resignation. Trustee may resign upon sixty (60) days’ prior written notice to Settlor (if living) and all current Beneficiaries.
3.5.2 Removal. A majority in interest of the adult, competent Beneficiaries may remove a Trustee with or without cause by written instrument delivered to the Trustee and filed with the Probate Court, provided a qualified Successor Trustee has accepted appointment.
3.5.3 Appointment of Successor. If the office of Trustee becomes vacant, [TRUSTEE SELECTION MECHANISM – e.g., “the Protector named in Schedule 2” / “majority of Beneficiaries”] shall appoint a Successor Trustee. If no appointment is made within thirty (30) days, the Probate Court may appoint one.
3.5.4 Vesting of Title. Title to the Trust Estate vests automatically in any Successor Trustee upon acceptance, without need of conveyance.
4. REPRESENTATIONS & WARRANTIES
4.1 Settlor. Settlor represents and warrants that:
a. Settlor owns the Initial Corpus free and clear of liens, claims, and encumbrances;
b. Transfer of the Initial Corpus will not violate any contract or court order to which Settlor is a party;
c. Settlor is not insolvent and does not contemplate any voluntary or involuntary insolvency proceeding.
4.2 Trustee. Trustee represents and warrants that:
a. Trustee is duly qualified and, if an entity, duly organized and in good standing under the laws of its jurisdiction of formation;
b. Trustee has full power and authority to enter into and perform its obligations under this Agreement;
c. Trustee will administer the Trust in good faith, in accordance with its terms and New Hampshire law.
4.3 Survival. The representations and warranties set forth in this Article 4 shall survive the execution of this Agreement and any appointment of a Successor Trustee.
5. COVENANTS & RESTRICTIONS
5.1 Trustee’s Ongoing Covenants.
a. Duty of Loyalty and Impartiality as required by RSA § 564-B:8-802 and 8-803;
b. Maintenance of adequate books and records;
c. Annual written accountings to Beneficiaries entitled to statements pursuant to RSA § 564-B:8-813, unless validly waived.
5.2 Notice of Significant Events. Trustee shall notify all current Beneficiaries in writing within thirty (30) days of:
a. A change in Trustee;
b. The commencement of litigation against the Trust Estate;
c. Any material breach of this Agreement by a Beneficiary.
5.3 Limitations on Settlor. Settlor shall not pledge, mortgage, assign, or otherwise encumber Settlor’s expectancy in any Trust distribution, nor seek or accept a loan from the Trust.
6. DEFAULT & REMEDIES
6.1 Events of Default. Each of the following constitutes an “Event of Default”:
a. Trustee’s willful misconduct or gross negligence in administration;
b. Trustee’s failure to provide required accountings that remains uncured fifteen (15) days after written notice;
c. Trustee’s self-dealing not authorized by this Agreement or the NH UTC.
6.2 Remedies. Upon an Event of Default, any Beneficiary may:
a. Seek removal of the Trustee pursuant to RSA § 564-B:7-706;
b. Petition for surcharge against the Trustee limited to the depletion of the Trust Estate caused by the default;
c. Request injunctive relief under RSA § 564-B:10-1001 to prevent further harm.
6.3 Attorneys’ Fees. The Probate Court may award reasonable attorneys’ fees and expenses from the Trust Estate or against the offending party, consistent with RSA § 564-B:10-1004.
7. RISK ALLOCATION
7.1 Indemnification of Trustee. To the maximum extent permitted by law, Settlor and the Trust Estate shall indemnify and hold harmless Trustee, its officers, directors, managers, employees, and agents (collectively, “Indemnitees”) from and against any and all claims, liabilities, losses, and expenses (including reasonable attorneys’ fees) arising out of or in connection with the administration of the Trust, except to the extent such claims result from an Indemnitee’s willful misconduct or gross negligence.
7.2 Limitation of Liability. Any liability of Trustee arising under or with respect to this Agreement shall be limited in all events to the Trust Estate; no Indemnitee shall have personal liability to any Person beyond the assets of the Trust.
7.3 Insurance. Trustee may purchase and maintain, at the expense of the Trust Estate, fiduciary liability insurance providing coverage customary for trusts of similar size and complexity.
7.4 Force Majeure. Trustee shall not be liable for any failure or delay in performance caused by acts of God, war, pandemic, governmental action, or any other circumstance beyond Trustee’s reasonable control.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement and all questions relating to its validity, interpretation, and administration shall be governed by, and construed in accordance with, the laws of the State of New Hampshire (without regard to its conflict-of-laws rules).
8.2 Exclusive Forum. The [COUNTY] Probate Court of New Hampshire shall have exclusive jurisdiction over all proceedings concerning the Trust, except as provided in Section 8.3.
8.3 Optional Arbitration. If (i) all then-current Beneficiaries and the Trustee consent in writing, and (ii) the matter is one that may be resolved by arbitration under RSA § 564-B:1-111, the dispute shall be submitted to binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules. Any arbitration award may be confirmed in the Probate Court.
8.4 Jury Waiver Not Applicable. The parties acknowledge that probate matters in New Hampshire are heard in equity and tried to the court; accordingly, no jury trial right arises.
8.5 Injunctive Relief. Notwithstanding Section 8.3, any party may seek temporary, preliminary, or permanent injunctive relief from the Probate Court to enforce fiduciary duties, maintain the status quo, or protect Trust assets.
9. GENERAL PROVISIONS
9.1 Amendments and Waivers. This Agreement may be amended only (a) as permitted in Section 3.2.2, or (b) by written instrument executed by Trustee and all Beneficiaries then entitled to mandatory distributions, and approved by the Probate Court if required.
9.2 Assignment. Except as expressly provided herein, no party may assign or delegate any right or obligation under this Agreement without prior written consent of the Trustee and all affected Beneficiaries.
9.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, and permitted assigns.
9.4 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force, and the invalid provision shall be reformed to the minimum extent necessary to effect its original intent.
9.5 Entire Agreement. This Agreement constitutes the entire understanding among the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements, whether written or oral.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. Signatures transmitted electronically (e.g., via PDF or reputable e-signature platform) shall be deemed original signatures for all purposes.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties have executed this Irrevocable Trust Agreement as of the Effective Date.
| Settlor | |
|---|---|
| ________ | |
| [SETTLOR NAME] |
| Trustee | |
|---|---|
| ________ | |
| [TRUSTEE NAME], as Trustee |
[IF CORPORATE TRUSTEE]
| ________ |
| [AUTHORIZED SIGNATORY NAME & TITLE] |
[// GUIDANCE: Attach standard New Hampshire jurat if notarization is desired. Some registries require acknowledgment for real estate conveyances.]
11. SCHEDULES & EXHIBITS
• Schedule 1 – Beneficiaries
• Schedule 2 – Protector / Special Investment Adviser (if any)
• Exhibit A – Description of Initial Corpus
• Exhibit B – Form of Limited Power to Add Beneficiaries
• Exhibit C – Trustee Fee Schedule
Schedule 1 – Beneficiaries
| Name | Relationship to Settlor | Class (Current / Remainder) | Date of Birth | Address |
|---|---|---|---|---|
| [BENEFICIARY 1] | ||||
| [BENEFICIARY 2] |
[// GUIDANCE: Update upon addition or substitution of Beneficiaries.]
Exhibit A – Description of Initial Corpus
- Cash: $[AMOUNT] delivered via [WIRE / CHECK] on Effective Date.
- [NUMBER] shares of [COMPANY] common stock, Certificate No. [###].
- [If real property] Lot [##], Map [##], recorded at [COUNTY] Registry of Deeds Book [###], Page [###].
[// GUIDANCE: 1) For New Hampshire interest-and-dividends tax planning, consider holding only non-taxable assets or distributing taxable income to Beneficiaries domiciled outside New Hampshire. 2) Review federal gift-tax implications of transfers; Settlor should file IRS Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, for the calendar year of funding.]