New Hampshire Revised Statutes 564-B:5-505 – Creditor’s Claim Against a Settlor of a Revocable Trust
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(a) During the settlor’s life, the property of a revocable trust is subject to claims of the settlor’s creditors regardless of whether the trust contains a spendthrift provision.
(b) After the settlor’s death 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 immediately before the settlor’s death is subject to the following claims to the extent that the settlor’s probate estate is inadequate to satisfy those claims:
(1) Claims of the settlor’s creditors;
(2) Costs of administration of the settlor’s estate; and
(3) Expenses of the settlor’s funeral and disposal of remains.
(c) Subsection (b) shall apply to a trust regardless of whether the trust contains a spendthrift provision.
(d) Subsection (b) shall not apply to:
(1) The proceeds and any other benefits of a policy of life or endowment insurance effected by a settlor, a trustee, or any other person on the settlor’s life or another individual’s life as provided in N.H. Rev. Stat. § 408:6; or
(2) Any claim barred under N.H. Rev. Stat. § 564-B:5-508.
(e) During only the period that the power of withdrawal may be exercised, the holder of a power of withdrawal shall be 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 of withdrawal.
(b) After the settlor’s death 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 immediately before the settlor’s death is subject to the following claims to the extent that the settlor’s probate estate is inadequate to satisfy those claims:
Terms Used In New Hampshire Revised Statutes 564-B:5-505
- 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
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- person: may extend and be applied to bodies corporate and politic as well as to individuals. See New Hampshire Revised Statutes 21:9
- Probate: Proving a will
- Revocable trust: A trust agreement that can be canceled, rescinded, revoked, or repealed by the grantor (person who establishes the trust).
- 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
- Trustee: A person or institution holding and administering property in trust.
(1) Claims of the settlor’s creditors;
(2) Costs of administration of the settlor’s estate; and
(3) Expenses of the settlor’s funeral and disposal of remains.
(c) Subsection (b) shall apply to a trust regardless of whether the trust contains a spendthrift provision.
(d) Subsection (b) shall not apply to:
(1) The proceeds and any other benefits of a policy of life or endowment insurance effected by a settlor, a trustee, or any other person on the settlor’s life or another individual’s life as provided in N.H. Rev. Stat. § 408:6; or
(2) Any claim barred under N.H. Rev. Stat. § 564-B:5-508.
(e) During only the period that the power of withdrawal may be exercised, the holder of a power of withdrawal shall be 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 of withdrawal.