Upon visiting an estate planning lawyer for the first time and learning about available options, many are surprised at the flexibility of different legal tools involved in the transfer of property. Far from simply doling out assets to specific friends and family members, one has immense control in deciding how those assets are used, when they are received, and what can trigger the loss of those assets. In this way, unique plans can be crafty which account for any number of family dynamics–multiple marriages, concerns about ex-spouses, children with special needs, relatives with poor money management skills, and more.
Similarly, the same flexibility often exists with gifts to charity. Many New Yorkers decide to share part of their assets with favorite non-profit causes. Those gifts can be one-time transfers or they may involve the creation of trusts for use in specific ways. For example, one of the most common charitable trusts involves setting up a scholarship fund to an alma mater to benefit future students. The trust may be funded with various assets, growing over the years and helping countless students.
Those creating these trusts can set many different terms on the gifts. Perhaps you’d like the funds to be used solely for those interested in pursuing nursing or for those who came from a certain disadvantaged background. In most cases, an attorney can help craft the legal arrangement so that your exact wishes are carried out.
The flexibility of trust details is vividly displayed in a story about an old scholarship trust that a university is hoping to modify. As discussed in The Chronicle, Columbia University asked a court to alter the terms of a trust that come with rigid requirements for those who benefit from it. Specifically, students who receive the “Lydia C. Roberts” Graduate Fellowship are required to have been born in Iowa and attended a Iowa undergraduate school. They must also move back to Iowa for at least two years after their graduation. In addition, they cannot pursue law, medicine, dentistry, veterinary surgery, or theology. Most egregiously, the trust–created in 1920–specifies that the recipients of the scholarship must be “from the Caucasian race.”
Of course, this is a blatantly discriminatory requirement–a product of its time. That is why the University is seeking to have the race requirement thrown out by the court. While no one can support discrimination in this way, the fact that the university is still forced to seek court approval to modify the terms–nearly 100 years after the trust was created–is a testament to the extreme power of these legal tools. They allow individuals to exert significant control over their assets even a century down the road.