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RE: [tips_and_tricks] changes in trust law

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  • Frog Farmer
    ... My first thoughts were that I d have to charge for a full analysis to put any worries to rest. I had it beat quickly. But then later on I saw this: IV.
    Message 1 of 4 , Jan 31, 2009
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      > Anyone have input on whether this bill would be a very bad thing
      > regarding trusts and transfers of property?
      >
      > http://www.gencourt.state.nh.us/legislation/2009/HB0261.html
      >
      > This bill provides that a conveyance of real property to or from a
      > trust shall be deemed to have been made to or from the trustees of the
      > trust.
      >
      > It looks bad in that it seems to bypass the ability to pass property
      > along in trust. I know several states have been acting against trusts
      > in their ever-expanding goal of sucking up more tax money. I just
      > can't quite tell how large an impact this would have.
      >
      > Any input or talking points against it would be greatly appreciated.
      >
      > Thanks.

      My first thoughts were that I'd have to charge for a full analysis to
      put any worries to rest. I had it beat quickly. But then later on I
      saw this:

      "IV. This section does not apply to any trust that, as determined by the
      laws of its situs, is an entity capable of holding and conveying title
      in its own name."

      So, I see this as a wet paper bag put out to see who can fight their way
      out of it. Or maybe it's like a strip of flypaper, just hanging there
      waiting for flies who cannot resist landing on it.

      Key words were interspersed throughout, virtual "shoes" waiting for some
      Cinderella to proclaim that they fit! Like "grantor". That's a Big
      Clue. So, is it bad? Yeah, but it has its reasons, like all the fraud
      that's been going on. It will cut that down a bit. But I can fight my
      way out of that wet paper bag so as to protect my own rights and
      privacy, no problem.

      Regards,

      FF
    • Jake
      ...     There are several factors involved, but the biggest ones are type of trust & jurisdiction.  There are trusts the state legislature has no
      Message 2 of 4 , Feb 1, 2009
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        > Anyone have input on whether this bill would be a very bad thing regarding trusts and transfers of property?
        >
        > http://www.gencourt .state.nh. us/legislation/ 2009/HB0261. html
        >
        > This bill provides that a conveyance of real property to or from a trust shall be deemed to have been made to or from the trustees of the trust.
         
        <snip>
         
        There are several factors involved, but the biggest ones are type of trust & jurisdiction.  There are trusts the state legislature has no jurisdiction over & probably the most famous is the Dartmouth College trust.  The decision is 60 pages long (the trust is included), but I highly recommend reading Trustees of Dartmouth College v. Woodward, 17 U.S. 518 (1819).  Excerpt from the Syllabus:
         
           "The charter granted by the British Crown to the trustees of Dartmouth College, in New Hampshire, in the year 1769, is a contract within the meaning of that clause of the Constitution of the United States, art. 1, s. 10, which declares that no state shall make any law impairing the obligation of contracts.  The charter was not dissolved by the Revolution.
            An act of the State Legislature of New Hampshire altering the charter without the consent of the corporation in a material respect, is an act impairing the obligation of the charter, and is unconstitutional and void."
         
        The Biltmore Estate in N.C. is somewhat similar & by contract, neither the state nor the federal gov't. have any jurisdiction over that trust.
         
        There are trusts I've managed for years & no state gov't. (including courts) has any jurisdiction over them whatsoever.  And the only way a federal court has jurisdiction is if the trustees have an argument they can't settle between themselves & one brings an action in a federal court (choose your trustees wisely so that won't happen).  But "statutory trusts" (what lawyers usually draw up) are subject to the jurisdiction of state legislatures & courts, which can annul or modify terms & conditions whether you like it or not.
         
        Notice 2 points in the Act you gave the link to:
         
           "IV. This section does not apply to any trust that, as determined by the laws of its situs, is an entity capable of holding and conveying title in its own name."
           "V. Nothing contained in this section shall be construed to recognize trusts created under the laws of this state as entities capable of holding or conveying title to real property in their own names."
         
        See the difference?  Trusts drawn under the laws of "this state" can't hold or convey title in the trust name, but trusts properly drawn under another situs can.  I've been thru this in both state & federal courts & if the trust is drawn correctly to begin with, neither the state legislature nor the congress can change the terms & conditions of it.
         
        Another key issue in the Dartmouth case is "contract" - there is a dissertation in the opinion on what is & what is not a contract.  The rules applied then stand to this day too. 
         
        Trusts are often "pigeon holed" into a few basic categories, but there are so many different types you can't do that.  However, in simple terms, it boils down to 2 things - 1) Is this trust a valid contract? and 2) Who has authority/jurisdiction over it?  If the answer to the 1st question is yes & the answer to the 2nd is only the trustees, then you're in fine shape.  If not, then the legislature can modify the trust, or simply dissolve it.
         
        ~ ~ ~

      • Jim Stiner
        ... over it? If the answer to the 1st question is yes & the answer to the 2nd is only the trustees, then you re in fine shape. If not, then the legislature
        Message 3 of 4 , Feb 1, 2009
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          >1) Is this trust a valid contract? and 2) Who has authority/jurisdiction
          over it? If the answer to the 1st question is yes & the answer to the 2nd
          is only the trustees, then you're in fine shape. If not, then the
          legislature can modify the trust, or simply dissolve it.

          I concer with you Jake.

          If you are in possession of a statutory trust, trash it and write and common
          law trust
          beings they are contracts and not subject to the whims of congress.

          Jim

          I have a free repost that explains the difference at
          www.WriteATrust.com .


          -----Original Message-----
          From: tips_and_tricks@yahoogroups.com
          [mailto:tips_and_tricks@yahoogroups.com]On Behalf Of Jake
          Sent: Sunday, February 01, 2009 7:49 AM
          To: tips_and_tricks@yahoogroups.com
          Subject: Re: [tips_and_tricks] changes in trust law


          > Anyone have input on whether this bill would be a very bad thing
          regarding trusts and transfers of property?
          >
          > http://www.gencourt .state.nh. us/legislation/ 2009/HB0261. html
          >
          > This bill provides that a conveyance of real property to or from a
          trust shall be deemed to have been made to or from the trustees of the
          trust.

          <snip>
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