Should Trusts Be Amended to Suit the Needs and Whims of Beneficiaries?
Like many, I have been following with some interest the progress of Rupert Murdoch's bid to buy Dow Jones, the publisher of the Wall Street Journal. My interest has been especially piqued by the role that a series of what appear to be some very complex Bancroft family trusts play in the matter, not to mention the role that the family trustees and lawyers are playing. The weekend edition of the Journal ran an interesting story on the status of Mr. Murdoch's bid that outlined the divide among the Bancroft family members, as well as the role that the various trusts play in the drama. What especially caught my eye was this little bit:
Family lawyers were scrambling Friday to change the voting structure of the biggest Bancroft trust so it would better reflect the views of all the beneficiaries. The trust's overseers include Christopher Bancroft, a prominent family member who has been outspoken in his opposition to the deal. The restructuring could dilute Mr. Bancroft's influence over the stock now held in the trust.
I have not seen the trust documents that govern the trust in question, and I do not have any knowledge of the terms. I wonder, though, whether it is particularly appropriate for the lawyers to try and restructure the trust to suit the needs of particular beneficiaries under a particular set of facts. If its that easy, part of the purpose of the trust (and in the case of a family such as the Bancrofts. to be sure there are tax reaosns for the trusts) is defeated. It can't be that simple. I will be fascinated to see how this plays out and, if Mr. Bancroft is on the losing side, whether there will be litigation over this effort to divide the trust. And of course there is a planning lesson here for others. If you have particular wishes, be sure that they are explicitly addressed in your planning.
