Rep. Dan McGuire told the House Judiciary Committee that House Bill 88 would let married couples create an optional community‑property trust to preserve a federal income‑tax step‑up in basis when one spouse dies.

McGuire said the measure targets a specific federal tax treatment that benefits couples in nine community‑property states, where the surviving spouse receives a stepped‑up basis for the entire asset rather than half. “If you live in New Hampshire, the IRS treats the surviving spouse as owning half of the asset from the start,” McGuire told members, explaining the tax difference he said the trust would address.

Under McGuire’s proposal, a married couple could transfer assets into a community‑property trust so the survivor could receive the full step up in basis at death; the sponsor described the change as optional and suggested it would mainly affect couples doing estate planning.

Banking representatives asked the committee to adopt a technical amendment to protect creditors and lien holders if property subject to a mortgage is placed into a trust. Ryan Hale of the New Hampshire Bankers Association and Rob Dietel, outside counsel, described language that preserves lenders’ security interests and clarified lien treatment for obligations incurred before or during marriage.

McGuire supported the amendment and agreed to research a fiscal‑note question raised in committee about whether transfers into the trust would trigger real‑estate transfer taxes. The sponsor said he expects most instances to be non‑taxable, but he would seek clarification from the Department of Revenue or fiscal staff.

Ending: The committee heard no public opposition during the session and closed the hearing on HB 88 after a short question period; McGuire agreed to provide follow‑up on any fiscal and drafting questions the committee raised.