2014 New Hampshire Revised Statutes
Title LVI - PROBATE COURTS AND DECEDENTS' ESTATES
Chapter 564-B - UNIFORM TRUST CODE
Section 564-B:5-505 - Creditor's Claim Against Settlor.

    564-B:5-505 Creditor's Claim Against Settlor. – (a) Whether or not the terms of a trust contain a spendthrift provision, the following rules apply:
       (1) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor's creditors.
       (2) With respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. This subparagraph shall not apply to:
          (A) a charitable remainder annuity trust within the meaning of section 664(d)(1) of the Internal Revenue Code;
          (B) a charitable remainder unitrust within the meaning of section 664(d)(2) of the Internal Revenue Code;
          (C) a trust described in section 2523(e) of the Internal Revenue Code;
          (D) a trust described in section 2523(f) of the Internal Revenue Code;
          (E) an irrevocable "special needs trust'' established for a disabled person as described in 42 U.S.C. 1396p(d)(4) or similar federal law governing the transfer to such a trust; or
          (F) an irrevocable trust solely because of the existence or exercise of a discretionary power granted to the trustee by the terms of the trust, court order, nonjudicial settlement agreement,] or any other provision of law (or the existence or exercise of a discretionary power granted to a trust advisor or trust protector by the terms of the trust, court order, nonjudicial settlement agreement, or any other provision of law, to direct the trustee) to pay directly to the taxing authorities or to reimburse the settlor for any tax on trust income or principal which is payable by the settlor under the law imposing such tax.
       (3) After the death of a settlor, and subject to the settlor's right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the settlor's death is subject to claims of the settlor's creditors, costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal of remains to the extent the settlor's probate estate is inadequate to satisfy those claims, costs, and expenses. This section does not apply to the proceeds and any other benefits of a policy of life or endowment insurance effected by the settlor on the settlor's own life or on another life as provided in RSA 408:2.
       (4) To the extent a claim against a settlor is barred under RSA 564-B:5-508, this section shall not apply to that claim.
    (b) During only the period that the power may be exercised, the holder of a power of withdrawal is treated in the same manner under this section as the settlor of a revocable trust to the extent of the property subject to the power.
    (c) Nothing in this section shall limit the application of the Qualified Dispositions in Trust Act set forth in RSA 564-D.

Source. 2004, 130:1. 2005, 270:15, eff. Sept. 20, 2005. 2008, 374:10-12, eff. Sept. 9, 2008. 2014, 195:18-20, eff. July 1, 2014.