§ 564-F:14-1404 — Enforcement of No-Contest Provision

(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:
(1) Any judicial proceeding against the foundation or any of the foundation officials, including any judicial proceeding:
(A) Contesting the validity of the foundation's formation;
(B) Contesting the validity of a contribution by a founder to the foundation;
(C) Contesting the validity of the foundation's governing documents;
(D) Seeking to set aside any provision of the governing documents;
(E) Seeking to void any action by the foundation officials; or
(F) Seeking to dissolve the foundation; or
(2) Any act that frustrates or defeats the founder's intent as expressed in the terms of the governing documents.
(b) Subject to subsections (c) and (d), a no-contest provision shall be enforceable in accordance with its express terms regardless of whether:
(1) The beneficiary acted in good faith or with probable cause; or
(2) The enforcement of the no-contest provision would result in a partial or complete forfeiture of the beneficiary's interest.
(c) A no-contest provision shall be unenforceable to the extent that:
(1) The court dissolves the foundation under RSA 564-F:20-2013(a); or
(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.
(d) A no-contest provision shall be unenforceable to the extent that a beneficiary initiates, maintains, or cooperates in:
(1) Any judicial proceeding initiated by a foundation official;
(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;
(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
(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.

Legislative History

2017, 257:47, eff. Oct. 1, 2017. 2018, 210:14, eff. June 8, 2018.