Kennedy Trusts Seen as an Educational Tool

The recent death of Massachusetts Senator Edward M. “Ted” Kennedy
might provoke some insightful thought about the nature of trusts – and
how comprehensive and versatile they can be.

Joseph P. Kennedy, the patriarch of the Kennedy Family, left behind
a labyrinth of blind trusts to manage the millions he had earned from
scratch. He put his wealth into trusts with a long-term strategy in
mind, to manage the family’s holdings for several generations of
Kennedys. These blind trusts are run by financial experts whose goals
are to invest conservatively and maintain the principal. Small amounts
of profit are doled out to members of the Kennedy family annually. This
network of blind trusts has maintained their overall wealth during the
recent recession and in some instances they have flourished, even
though the family can at times be hard pressed for ready cash.

In 2006, the recently-deceased Ted Kennedy could count as holdings
five distinct family trust funds worth a minimum of $45 million to
possibly as much as $150 million. Kennedy estimated that the family’s
multiple trusts distributed $500,000 to $5 million in annual income.
Before 2006, Senator Kennedy’s filings listed assets at less than $20
million. As only the family’s financial advisors were privy to details
about the primarily blind trusts, it’s difficult to determine what made
them double in value during the course of a single year. One thing for
certain: Edward M. Kennedy passed away near the peak of his family’s
net worth.
Trust instruments possess a unique nature. The Kennedy Trusts are
excellent examples of how comprehensive and versatile trusts can be.
First established as a single trust in 1926 by Joseph P. Kennedy, the
Kennedy patriarch followed with successive trusts in 1936 and 1949.
Each was “entrusted” with its own purpose; for instance, the 1926 trust
was intended for Rose and their children, and the 1949 instrument was
intended for his grandchildren. Each trust was established as a blind
trust, in that it acted independently from any other trust.

The Kennedy trusts had staying power and were built to last, with
each ensuing trustee active in providing for the beneficiaries while
simultaneously protecting the principal for future generations. It was
sad and tragic that Ted Kennedy has been taken from us as Americans.
His stature as a voice in the U.S. Senate is beyond dispute. But the
Kennedy trusts are a legacy for all of us, an excellent example of how
trusts can be designed to protect and build even a relatively modest
estate.

Gene Osofsky is an East Bay elder law attorney in California. Gene
Osofsky specializes in Medi-Cal planning, wills, probate, trusts,
nursing home issues, special needs planning, and disability planning.
To learn more about East Bay elder law lawyers, East Bay elder law attorney, Medi-Cal planning, Medi-Cal planning lawyers and The Law Offices of Osofsky & Osofsky, visit Lawyerforseniors.com.