Kraft family wins SJC ruling that allows it to alter a trust, make sons trustees
The state’s Supreme Judicial Court issued a ruling Monday that will allow a trust created by Robert Kraft in 1982 to distribute assets to a new trust on which his four grown sons can serve as trustees and distribute the funds.
The New England Patriots owner and his late wife, Myra Kraft, set up the trust to benefit their children and future grandchildren when their sons were still minors. Trusts provide tax benefits to the descendants of wealthy people who want to place assets in a vehicle for future generations.
The case has wider implications than for the Kraft family, whose trustee, Richard Morse, sought the court’s ruling on their behalf. The Boston Bar Association had filed an amicus brief in the case, siding with the Kraft family’s position. The association argued that a trustee’s broad discretion to distribute property should include the authority to distribute the property to a new trust that benefits the same beneficiaries.
According to the SJC decision posted on its web site Monday, the Krafts’ 1982 trust was “drafted to preclude the sons from serving as disinterested trustees because, at the time of its creation, the sons were minors and it was impossible to know whether they would develop the skills and judgment necessary to make distribution decisions concerning their respective subtrusts.’’
Up to now, Morse has had sole discretion on the trust. Now 81 years old and close to retiring, he has recommended setting up a new trust on which the sons could make decisions about dispersing money. Morse sought the court’s approval in order to head off a tax issue with the IRS.
Andrew D. Rothstein, an attorney with Goulston & Storrs in Boston who was part of the amicus brief, said the SJC decision likely sets a precedent. “The court has said that the trustee has this authority to modify a trust,’’ so long as it adheres to the intent of the donor.
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