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STePUSA EDITORIALEDITORSt Bg
[email protected]
MANAGING EDITORls [email protected]
US EDITORIAL BOARDStanley BargSteve CantorKathy DavidsonKent
LawsonGideon RothschildG Warren Whitaker
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Stanley Barg TEP is Chairman of STEP Mid-Atlantic and Partner at
Duane Morris LLP.
Wlcom
Produced in association with:
8/6/2019 Armstrong & Hastings, Purpose Trusts and Private
Trust Companies: Panacea or Placebo?
4/5
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Christopher S Armstrong TEP is an Attorney with CS
Armstrong PC and Diana M Hastings is a Shareholder
with Friedman, McCubbin, Spalding, Bilter, Roosevelt,
Montgomery & Hastings
1 T Prdnt Invtor Rl inclding th obligation
o a trt to divriy i t orth in th Uniform
Prudent Investor Act 19943. Te Restatement
(Tird) Of rusts, 227(b) pblihd in 1992 warponibl or th
intgration o th divrication
rqirmnt into th concpt o prdnt invting.
227(b) provid that [i]n making and implmnting
invtmnt dciion, th trt ha th dty to
divriy th invtmnt o th trt nl, ndr
th circmtanc, it i prdnt not to do o.
2 Compar, In Re Charles G. Dumont, 791 N.Y.s.2d
868 (srr.Ct. Monro Cty. 2004), rvd in part
809 N.Y.s.2d 360 (App.Div. 4th 2006) with
Americans of the Arts v. Ruth Lilly Charitable
Remainder Annuity rust #1, 855 N.e.2d 592
(Ind. Ct.App. 2006)
3 uC 404. T uC, which i ignicantly
inncing th crrnt dvlopmnt o trt law or
tat that hav not tablihd thir own advancd
trt law, provid in 409 that a non-charitabl
prpo trt may b cratd or a priod not in
xc o 21 yar, bt commnt accompanying ch
ction xprly advi that a priod longr than
21 yar cold b prcribd by a tat adopting th
uC i it aw t. T uC do not altr th baic
tnt that in ordr to b valid, all trt mt hav a
prpo that i lawl, not contrary to pblic policy,
and poibl to achiv.
4 s Bov, Rise of the Purpose rust, 144 rt &
etat 18 (Ag. 2005).
5 Mattr oPulitzer, 139 Mic. 575, 249 N.Y.s. 87
260 N.Y.s. 975 (1932)
6 Restatement (Tird) Of rusts, 27, Rportr Not.
7 s Fitch, Pritzkerv. Pritzker, 172 Forb 142
(Nov. 24, 2003) and Marmont, Pritzkr sttl
Family Lawit; Cot: A Fortn, Te Wall Street
JournalB1 (Jan. 7, 2005).
8 Dckworth, T rt Ofhor, 32 Vanderbilt
Journal of ransnational Law879, 914 (1999).
9 som commntary ha ggtd that a PC i an
fctiv dvic or holding cloly concntratdinvtmnt poition bca th PC
board o
dirctor i govrnd by th bin jdgmnt
rl rathr than th prdnt invtor rl. Ti
ditinction i t hoght to allow th mmbr o th
board to mak boldr invtmnt dciion than
i thy wr individal trt . Ti propoition
i dbio, howvr, bca qity may look
throgh th corporat vil and atn it rl
pon tho individal who pak and act or
th corporat trt [citation to In re French
Protestant Hospital[1951] 1 Ch. 567]. s
Dckworth, Privat rt Compani: Part 1,
Private Client Business[1997] 353, 358.
10 T Joint rary-IRs 2007-2008 Priority
Gidanc Plan (and prior Plan) ndrtak to
i gidanc rgarding th conqnc
ndr vario tat, git and gnration kipping
tranr tax proviion o ing a amily-ownd
trt company a trt o a trt.
11 s NYsBA ax sct ion Rport (No. 1111) datd
May 30, 2006 which inr th poibilit y o a
rciprocal arrangmnt whnvr any individal
who i a dicrtionary bnciary o a tr t may
participat in a dciion rgarding th xrci o
bnciary tax-nitiv powr ovr th trt.
12 s Kozko, Rciprocal rt Doctrin
Tratn Family Dciion-making, Wealth
PURPOSE TRUSTS AND PTCs
