Intent Vs. Beneficiary's Interests: Case Study
Whose Interests Reign Supreme: Settlor’s Intent vs. Beneficiary’s Interests
Trust – The right, enforceable solely in equity, to the beneficial enjoyment of property to which another person holds the legal title; a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary). Settlor – Someone who makes a settlement of property; esp., one who sets up a trust. — Also termed creator; donor; trustor; grantor; founder. Beneficiary – Someone who is designated to receive the advantages from an action or change; esp., one designated to benefit from an appointment, disposition, or assignment (as in a will, insurance policy, etc.), or to receive something as a result of a legal arrangement or instrument. The aforementioned terms are commonly understood by attorneys, legal scholars, and laypersons alike. These terms serve as the fundamental base for any trust agreement, providing the instrument, and two of the three key actors within the trust (trustee being the third). On their faces, …show more content…
This will contained a clause which prevented the trustee from selling stock in the New York World newspaper. Over time, the New York World became unprofitable and threatened to devalue the trust, leading the trustees to ask the Court for approval to sell the stock. The Court agreed because it found that the settlor’s primary intent in creating the trust was to pass wealth to its beneficiaries, and ensure that the corpus was preserved. The Equitable Deviation Doctrine was born. Following the Pulitzer case, courts permitted the trustees of a trust to deviate from the settlor’s intent where circumstances not known or foreseen by the settlor arose, and where such change in circumstances would defeat or substantially impair the accomplishment of the intended trust
Trust – The right, enforceable solely in equity, to the beneficial enjoyment of property to which another person holds the legal title; a property interest held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary). Settlor – Someone who makes a settlement of property; esp., one who sets up a trust. — Also termed creator; donor; trustor; grantor; founder. Beneficiary – Someone who is designated to receive the advantages from an action or change; esp., one designated to benefit from an appointment, disposition, or assignment (as in a will, insurance policy, etc.), or to receive something as a result of a legal arrangement or instrument. The aforementioned terms are commonly understood by attorneys, legal scholars, and laypersons alike. These terms serve as the fundamental base for any trust agreement, providing the instrument, and two of the three key actors within the trust (trustee being the third). On their faces, …show more content…
This will contained a clause which prevented the trustee from selling stock in the New York World newspaper. Over time, the New York World became unprofitable and threatened to devalue the trust, leading the trustees to ask the Court for approval to sell the stock. The Court agreed because it found that the settlor’s primary intent in creating the trust was to pass wealth to its beneficiaries, and ensure that the corpus was preserved. The Equitable Deviation Doctrine was born. Following the Pulitzer case, courts permitted the trustees of a trust to deviate from the settlor’s intent where circumstances not known or foreseen by the settlor arose, and where such change in circumstances would defeat or substantially impair the accomplishment of the intended trust