- The New Hampshire Foundation Act: A Solid Foundation for Wealth Management on a Global Scale
- March 7, 2019 | Author: Steven M. Burke
- Law Firm: McLane Middleton, Professional Association - Woburn Office
New Hampshire recently signaled its intention to be one of the leading states for fiduciaries to consider by enacting The New Hampshire Foundation Act, making it the first state to permit the establishment of civil law foundations. Generally, foundations are legal entities similar to trusts, but foundations also have features similar to that of corporations and limited liability companies. Foundations have long been popular across Europe and parts of Asia, in countries as diverse as Malaysia, Austria, Malta, Luxembourg, the Netherlands, and Estonia. Many of these civil law countries do not recognize trusts or have difficulty classifying them for local law purposes.
Thanks to New Hampshire legislators, advisors now have the option to use a New Hampshire-based foundation as a wealth management tool for clients residing in civil law jurisdictions. Based on ease of use in the international arena and likely favorable tax treatment and asset protection potential, foundations are a wealth management game-changer in the U.S. and potentially internationally. This article discusses the benefits, structure, and taxation of foundations, and concludes with scenarios in which they may be beneficial to clients and their advisors.
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