Nation’s oldest trust facing accusations of mismanagement

On Behalf of | Mar 10, 2012 | Trusts

For most Maryland residents, estate planning mostly involves the immediate and near future. That is, they put in place plans that will help them to minimize the impact of taxation while maximizing the size of the estate for heirs and beneficiaries. However, through a trust, they may be able to leave a lasting footprint long after they pass away.

This is being shown in stark detail in a dispute concerning the nation’s oldest charitable trust. Established by one of the first settlers of Massachusetts over 350 years ago, the trust was established by William Payne for the benefit of public school children in the town of Ipswich. It specifically covers a 35-acre plot of land that is nestled by the sea.

Currently, there are 167 cottages on the piece of property, each of which pays rent to the trust. That rent is then channeled to the local public school system, but when the trustees sought to increase the rent in 2006, that touched off a legal battle. After years of litigation, the trustees eventually reached a settlement with the tenants of the land in which the cottages would be converted to condominiums. That would turn the tenants into landowners, and could perhaps invalidate the trust.

Multiple parties are now calling foul, and allege that the trustees have engaged in mismanagement. Others argue that the settlement stays true to the original wishes of William Payne. Yet whatever the result, the age of the charitable trust demonstrates the power of these legal instruments for residents of Maryland and elsewhere.

Source: Wall Street Journal, “Testing Donor’s Intent, 350 Years Later,” Ashby Jones, March 2, 2012


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