Summer 2006
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 …
You must be logged in as a Family Business Magazine subscriber to read the full text online. Articles may be purchased individually for $10.00.
