Paul L. Caron

Sunday, May 15, 2011

$100m Rule Against Perpetuities Bequest: Lives-in-Being + 21 Years = 92 Years

Wellington Burt, a lumber baron who was once the eighth wealthiest man in America, died in 1919 with a $40-$90 million estate.  He died estranged from his family, and his will left only modest bequests to his children and staff ($30,000 per year to a "favorite son," $1,000 to $5,000 per year to other children and domestic staff). The bulk of the estate was subject to a "spite clause":  to avenge a family feud, the will deferred the distribution of his fortune to the maximum period permitted by the rule against perpetuities: 21 years after the death of his last then-living child or grandchild.  Burt's last grandchild died in 1989, and the current $100-$110 million estate will be distributed to Burt's 12 great-, great-great- and great-great-great-grandchildren (ranging in age from 19 to 94 years old) by the end of the month.

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Something's off in the AP story. If one of the heirs is 94, he/she would have been alive in 1919.

Posted by: Dan | May 15, 2011 11:28:19 AM

I should think before I post. I guess Mr. Burt could have had a great-grandchild alive in 1919 that wouldn't be subject to the spite clause.

Posted by: Dan | May 15, 2011 11:30:27 AM

So, over 92 years a $40-90 million estate grew to a $100-110 million estate. I wonder who provided the investment advice and how they were compensated. For the last 80 years inflation ran at about 3% Ibbottson says. This did not even keep up with inflation.

Posted by: Bill | May 16, 2011 9:31:09 AM