New Hampshire Revised Statutes 564-B:5-502 – Creditor’s Claim Against a Beneficiary of a Trust Containing a Spendthrift Provision
Current as of: 2023 | Check for updates
|
Other versions
(a) A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer of a beneficiary‘s interest.
(b) A term of a trust providing that the interest of a beneficiary is held subject to a “spendthrift trust,” or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary’s interest.
(c) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision.
(d) To the extent that a beneficiary’s interest in a trust is subject to a spendthrift provision, a creditor or assignee of the beneficiary may not reach:
(1) The beneficiary’s interest in the trust; or
(2) A distribution from the trust before its receipt by the beneficiary.
(e) To the extent that a beneficiary’s interest in a trust is subject to a spendthrift provision, the beneficiary’s interest:
(1) Is not property for purposes of N.H. Rev. Stat. § 458:16-a, I; and
(2) Shall not be subject to any forced heirship, legitime, forced share, or any similar heirship rights under the laws of any jurisdiction.
(f) To the extent that a beneficiary’s interest in a trust is subject to a spendthrift provision, a court may authorize an exception creditor of the beneficiary to attach present or future distributions to or for the benefit of the beneficiary.
(1) For purposes of this subsection (f), the following definitions shall apply:
(A) “Exception creditor” means, with respect to a beneficiary:
(i) An individual to the extent that there is a judgment or court order against the beneficiary for child support in this or any other state;
(ii) A spouse or former spouse to the extent that there is a judgment or court order against the beneficiary for basic alimony;
(iii) A judgment creditor who has provided services for the protection of a beneficiary’s interest in the trust; or
(iv) This state or the United States for a claim against the beneficiary to the extent that a statute of this state or federal law so provides.
(B) “Basic alimony” means the portion of alimony attributable to the most basic food, shelter, and medical needs of the spouse or former spouse if the judgment or court order expressly specifies that portion.
(2) Attachment of present or future distributions is the exception creditor’s exclusive remedy against the beneficiary’s interest in the trust.
(3) The court may limit the relief as is appropriate under the circumstances.
(4) Subsection (d)(2) shall not apply to an exception creditor.
(b) A term of a trust providing that the interest of a beneficiary is held subject to a “spendthrift trust,” or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary’s interest.
Terms Used In New Hampshire Revised Statutes 564-B:5-502
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- following: when used by way of reference to any section of these laws, shall mean the section next preceding or following that in which such reference is made, unless some other is expressly designated. See New Hampshire Revised Statutes 21:13
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- spendthrift: shall include anyone who is liable to be put under guardianship on account of excessive drinking, gaming, idleness, debauchery or vicious habits of any kind, or who is unable to manage his affairs with prudence. See New Hampshire Revised Statutes 21:19
- state: when applied to different parts of the United States, may extend to and include the District of Columbia and the several territories, so called; and the words "United States" shall include said district and territories. See New Hampshire Revised Statutes 21:4
- Statute: A law passed by a legislature.
- United States: shall include said district and territories. See New Hampshire Revised Statutes 21:4
(c) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision.
(d) To the extent that a beneficiary’s interest in a trust is subject to a spendthrift provision, a creditor or assignee of the beneficiary may not reach:
(1) The beneficiary’s interest in the trust; or
(2) A distribution from the trust before its receipt by the beneficiary.
(e) To the extent that a beneficiary’s interest in a trust is subject to a spendthrift provision, the beneficiary’s interest:
(1) Is not property for purposes of N.H. Rev. Stat. § 458:16-a, I; and
(2) Shall not be subject to any forced heirship, legitime, forced share, or any similar heirship rights under the laws of any jurisdiction.
(f) To the extent that a beneficiary’s interest in a trust is subject to a spendthrift provision, a court may authorize an exception creditor of the beneficiary to attach present or future distributions to or for the benefit of the beneficiary.
(1) For purposes of this subsection (f), the following definitions shall apply:
(A) “Exception creditor” means, with respect to a beneficiary:
(i) An individual to the extent that there is a judgment or court order against the beneficiary for child support in this or any other state;
(ii) A spouse or former spouse to the extent that there is a judgment or court order against the beneficiary for basic alimony;
(iii) A judgment creditor who has provided services for the protection of a beneficiary’s interest in the trust; or
(iv) This state or the United States for a claim against the beneficiary to the extent that a statute of this state or federal law so provides.
(B) “Basic alimony” means the portion of alimony attributable to the most basic food, shelter, and medical needs of the spouse or former spouse if the judgment or court order expressly specifies that portion.
(2) Attachment of present or future distributions is the exception creditor’s exclusive remedy against the beneficiary’s interest in the trust.
(3) The court may limit the relief as is appropriate under the circumstances.
(4) Subsection (d)(2) shall not apply to an exception creditor.