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Re: [tips_and_tricks] changes in trust law

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  • Jake
    ...     There are several factors involved, but the biggest ones are type of trust & jurisdiction.  There are trusts the state legislature has no
    Message 1 of 4 , Feb 1 5:48 AM
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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 2 of 4 , Feb 1 10:03 AM
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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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