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History of the Pure Trust
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| History of the Pure Trust | | |||||||||||||
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Date: | | 05/15/2000 | | ||||||||||||
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Brief History of the Pure Trust When more of the people's sustenance is exacted through the form of taxation than is necessary to meet the just obligations of government and expenses of its economical administration, such exaction becomes ruthless extortion and a violation of the fundamental principles of a free government. U.S. President Grover Cleveland, December 1886. The PURE TRUST has been traced back as far as Plato. Plato used a non-profit trust to finance his university in ancient Greece around the time of 400 BC. There is some evidence that Trusts might have been used in the Roman Empire as early as 800 BC Trusts were utilized in Britain at that time in history and still are in use today. During the Middle Ages in Europe, abusive taxes, limitations and restrictions were placed on the ownership of land. By using trusts the owner of the land was able to transfer the legal title of the property to the trustee for the benefit of the heirs. The secrecy of this transfer was advantages as many of the taxes and restrictions which applied to the property owner did not attach to the trustee and could, therefore, be ignored. Over the years, many versions of the PURE TRUST have been developed, but the basic goal has remained consistent: preserve the family estate and business, protect privacy, while keeping it out of the hands of the government. As long as there are governments and corruption of authority, these goals will remain consistent indefinitely. Pure Trust organizations arrived in America with the colonists. The first "Pure Trust" of record was drafted for Governor Robert Morris of the Virginia Colony, a prominent financier of the American Revolution, by the famous attorney and patriot, Patrick Henry, in 1765, 24 years before the adoption of the Constitution. Known as the North American Land Company, this Pure Trust is still in operation today, over 200 years later. William Bingham, reputed to be the richest American when the thirteen colonies won their independence, started a Pure Trust for his vast estate in 1804. The Trust owned two million acres in Maine which sold about the time of the Civil War. Bingham, a Senator from Pennsylvania in the Second United States Congress, owned vast land holdings. The Trust was terminated by the Trustees in 1964 after some 160 years of operation. It was terminated because of the multiplication of beneficiaries (total 315) and the liquidation of assets. Throughout the years, the incomes from property and proceeds from land sales were distributed to the beneficiaries. At the time of liquidation, it had no termination date. During its period of existence it was not affected by the death of its Creator, succeeding Trustees, probate procedures, or death transfer taxes. One of the outstanding examples of the Pure Trust is the Mesabi Trust which owns the reserves of the famous Mesabi iron deposits in Minnesota. This Trust receives the royalty payments from the iron deposits and distributes the royalties to the holders of Mesabi's certificates of beneficial interest. Following the transfer of assets from the company to a Pure Trust, Mr. Arnold Hoffmann, then president of the Mesabi Iron Company, announced in the Wall Street Journal on March 14, 1961, that a ruling by the Commissioner of the Internal Revenue declared the Trust would not constitute an association of persons taxable as a corporation. The shares of beneficial interest are traded daily on the New York Stock Exchange. Edward H. Hines, a multimillionaire building supplier, established a $12 million Trust in 1914, and headed his business until his death in 1931. His two sons, Ralph J. and Charles, succeeded the elder Hines as Trustees of the Trust and retained Trusteeship of their father's Trust after a court fight instituted by two nieces, a sister, and a nephew sought to break the Trust by claiming the administration of the family estate had been erroneous. The court ruled that the Pure Trust was not an erroneous method of managing the assets, and was in fact, a valid and legal arrangement for the estate. Ralph J. Hines, the eldest son and head Trustee, died in 1950, and again the family assets held in the Pure Trust were not disturbed by estate and inheritance taxes. The younger brother, Charles, subsequently became the head Trustee, handling the Trust for many years. Preserved, intact, for future generations, the Edward H. Hines Lumber Company is still in operation today. Another example of the Pure Trust used for a family estate is that of the Joseph Kennedy family. Joseph Kennedy, father of John F. Kennedy, originally established a Pure Trust to own the famous Chicago Merchandise Mart. The Kennedy family is known to maintain several other Pure Trusts for tax shelter purposes as well. One such Trust was reported in the Chicago Tribune. March 22, 1947 with the caption: "Kennedy Divides Merchandise Mart." "A Trust agreement formed several years before, in which Kennedy's wife, Rose F. Kennedy, and a long time friend and associate, John L. Ford, joined as Trustees, helped to materially distribute ownership in the 30 Million Dollar Merchandise Mart, among members of the family. It is said that many of these Trusts are domiciled in the Fiji Islands of the South Pacific." Things have since gone well for the Kennedys. Do you think they enjoyed any tax benefits from how things were set up or were they just exceptional business managers? The below article was recently released in the Associated Press. TUESDAY, JANUARY 27, 1998 Kennedys Sell Last Business AP CHICAGO, Jan. 26 -- "The Kennedy family said today that it had sold its last operating business, the Merchandise Mart in Chicago, in a $625 million deal that unloaded a substantial portion of the family's property holdings. The buyer, Vornado Realty Trust of Saddle Brook, N.J., will pay $465 million in cash, assume $50 million in debt and offer $110 million in securities. The deal also includes other properties in Chicago and in the Washington area. The Merchandise Mart, the centerpiece of the deal, was completed in 1930 by Marshall Field & Company, the retailer, and bought for $12.5 million in 1945 by Joseph P. Kennedy, the family patriarch. The sprawling, 25-story building of limestone and terra cotta is a national center for the home furnishings and design industries, and it remains one of the world's largest commercial buildings. At 4.2 million square feet, the Mart has its own ZIP code and was the world's largest building until the Pentagon was built, in the 1940's. In the deal, the Kennedy heirs will receive a stake in Vornado, one of the nation's largest real estate investment trusts. Most of the Kennedy fortune is in securities, such as stocks and bonds". William Waldorf Astor created a Fifty Million Dollar Trust estate by a conveyance to Trustees, recorded in New York, August 15, 1991, thereby saving his heirs several million dollars which would have gone for probate costs and death taxes had the estate been distributed by the court instead of Trustees. The Rockefeller family has used various kinds of Trusts as a means of maximizing privacy. Before his death in 1937, it is reported that John D. Rockefeller tucked much of his fortune into about seventy Trusts for his descendants. This vast web of individual and group funds represent assets of considerably more then One Billion Dollars. Nelson A. Rockefeller and his generation are believed to have reduced their personal holdings by the creation of still more Trusts for their own grandchildren and great grandchildren. It has been reported to one source that there are "well over 100 and perhaps 250 Individual Rockefeller Trusts". Many of these Trusts are known to be Pure Trusts placing the funds beyond the reach of the high cost of probate. H.L. Hunt, the Texas oil billionaire, is reported to have paid $75,000 for the setting up of the first Hunt family Pure Trust. Hunt then created at least twenty-five additional Trusts many of which seem to follow the names of the Hunt family members as follows: 1. Ruth Ray Hunt Trust Estate - This Trust owns a large percentage of the Hunt Oil Company, estimated to be worth in excess of One Billion Dollars. 2. Caroline Hunt Sands Trust Estate - This Trust is estimated to be worth at least One Hundred Million Dollars. 3. Ray Lee Hunt Trust Estate - This Trust bought the Jefferson Dallas Hotel in downtown Dallas, Texas. Ray Hunt called the purchase by his family's Trust an excellent investment according to the Dallas Morning News. 4. Nelson Bunker Hunt Trust Estate. 5. Ruth Jane Hunt Trust Estate 6. Helen Hunt Krelling Trust Estate 7. Swanee Hunt Trust Estate 8. Hassie Hunt Trust - This Trust is involved in the new exploratory oil drilling efforts in the Permian Basin of West Texas and Southwestern New Mexico. Some persons who claim to have been close to the Hunt family estimate that there may be as many as 200 Hunt family Trusts now in existence. The death of H.L. Hunt has not affected any of these Trust estates. The family has successfully arranged their affairs so as to increase the estate generation after generation rather than see the estate cut to shreds by the high costs of probate. Even Ronald Reagan has established such a Trust. Created in 1966, the "Ronald Reagan Trust" has enabled him to enjoy sizable tax advantages. While maintaining a magnificent living standard, Mr. Reagan has, in some years of Trust operation, been free of tax obligations. These are but a few of the many family estates that are preserved generation after generation through the use of the Pure Trust organization. Source: http://www.wealth4freedom.com/wns/trusthistory.htm | | | ||||||||||||
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