Dissident trust beneficiaries can alter power dynamics
Trustees will find it difficult to exercise their fiduciary duties unless they establish good relations with heirs.
By Francois de Visscher
High-profile legal battles have increased the burden on trustees. Two examples come to mind: Liesel Pritzker's suit against her father for $1.6 billion over his handling of her trust, and Bruce Winston's suit against Bankers Trust for $1.3 billion on claims that it mismanaged the trust's ownership in legendary diamond company Harry Winston Inc.
Grantors generally create trusts to hold family business stock for three reasons:
• To avoid or defer taxes on company shares.
• To prevent their children or grandchildren from knowing how much wealth they will inherit.
• To protect the business from being run into the ground by the next …
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