MANCHESTER — Favorable state laws regarding trusts has encouraged Fiduciary Company Inc. of Boston to form a New Hampshire-chartered trust company to cater mainly to wealthy individuals and families, officials told the Union Leader on Monday.
Fiduciary Trust Company of New England is setting up shop at 1155 Elm St. to handle predominately customers with at least $2 million in liquid assets.
“The bottom line is, New Hampshire since 2006 has really revamped its trust and tax laws such as that New Hampshire is really recognized now as one of the premier, if not the premier jurisdictions for administering trusts,” said Thanda Fields Brassard, vice president and general counsel for the New Hampshire trust company.
President & CEO Michael Costa said staffing levels haven’t been determined for the Manchester office, which is expected to open in September.
Costa said the business chose Manchester to be close to the concentration of financial and law firms in the state’s largest city. Law firms are an important source of referrals, he said.
A change in state law that took effect in 2013 means New Hampshire trusts no longer pay a 5 percent tax on income derived from the trusts, Brassard said. That is “pretty unusual and very advantageous” particularly to dynasty trusts that can last indefinitely, she said.
Costa said the New Hampshire trust company expects to attract customers outside the state.
Brassard said, “The East Coast would probably have the most initial interest. I think New Hampshire, New York and New England is probably where we’re focusing on right now.”
Fiduciary Trust, its Massachusetts affiliate, plans to review its Massachusetts customers to see if some may have their trusts transferred to New Hampshire.
The 2006 law also allows for the creation of trusts that protect assets from many creditors.
J. Spencer Culp, who works on trusts at the New Hampshire Banking Department, said the state has 29 trust companies today compared to 18 in 2006.
“It appears to us that the Legislature, they intended to make the state more attractive to these companies, and it looks like the legislation is having its intended effect,” Culp said.
Costa said the sweet spot of its customer base is “typically $5 million to $10 million, and at that range the client is able to take advantage of the full range of service we provide.”
Fiduciary Trust has more than $11.7 billion of assets under supervision.