RSA 564-F:14-1404 · Enforcement of No-Contest Provision

564-F:14-1404 Enforcement of No-Contest Provision. –

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(a)

For the purposes of this section, a "no-contest provision" means a provision of the governing documents that, if given effect, would reduce or eliminate a beneficiary's interest because the beneficiary directly or indirectly initiates or otherwise pursues:

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(1)

Any judicial proceeding against the foundation or any of the foundation officials, including any judicial proceeding:

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(A)

Contesting the validity of the foundation's formation;

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(B)

Contesting the validity of a contribution by a founder to the foundation;

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(C)

Contesting the validity of the foundation's governing documents;

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(D)

Seeking to set aside any provision of the governing documents;

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(E)

Seeking to void any action by the foundation officials; or

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(F)

Seeking to dissolve the foundation; or

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(2)

Any act that frustrates or defeats the founder's intent as expressed in the terms of the governing documents.

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(b)

Subject to subsections (c) and (d), a no-contest provision shall be enforceable in accordance with its express terms regardless of whether:

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(1)

The beneficiary acted in good faith or with probable cause; or

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(2)

The enforcement of the no-contest provision would result in a partial or complete forfeiture of the beneficiary's interest.

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(c)

A no-contest provision shall be unenforceable to the extent that:

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(1)

The court dissolves the foundation under RSA 564-F:20-2013(a); or

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(2)

A judicial proceeding only involved a claim against a foundation official for a breach of duty, and the foundation official committed a breach of duty.

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(d)

A no-contest provision shall be unenforceable to the extent that a beneficiary initiates, maintains, or cooperates in:

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(1)

Any judicial proceeding initiated by a foundation official;

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(2)

Any nonjudicial settlement agreement or other agreement among the beneficiaries and any other interested persons in settlement of a dispute or resolution of any other matter relating to the foundation;

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(3)

Any judicial proceeding for the interpretation or construction of a provision of the governing instrument, including the interpretation or construction of the no-contest provision with respect to any proposed or pending petition or motion; or

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(4)

To the extent that the foundation is a charitable trust, any judicial proceeding brought by the director of charitable trusts for the interpretation or construction of the foundation's governing documents. Source. 2017, 257:47, eff. Oct. 1, 2017. 2018, 210:14, eff. June 8, 2018. ARTICLE 15 Third Parties

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