Friday, June 22, 2012
As reported in The Washington Post, a $4 billion charitable trust created by the late Alfred I. duPont is the subject of scrutiny by the Delaware Attorney General Beau Biden. Biden alleges in court documents filed in Florida, where the trust is managed, that the trustees have mismanaged the trust and not adhered to the grantor's intentions. Specifically, the trustees are accused of deviating significantly from duPont's original intent by not focusing the trust on Delaware, as stipulated in duPont's will. The trust provides annuity payments to certain beneficiaries of duPont's will and, more significantly, funds the Nemours Foundation which operates health care facilities in Delaware, Florida, New Jersey, and Pennyslvania. The Foundation also operates the Nemours Mansion and Gardens in Wilmington, Delaware. Among some of the allegations in the court filing, the Delaware AG claims that certain renovation costs of the Mansion as well as administrative expenses were over-attributed to Delaware, thereby reducing its annual trust distributions over a 6-year period. As a result, the trust has not been operating more for the benefit of Delawareans.
The trustees "welcome a dialogue" with the Delaware AG. This court filing adds further complications to the trustees' efforts to bifurcate the existing trust to achieve better foreign tax treatment for its overseas investments. For more details on the lawsuit, see the Delaware AG's media release.
(Hat tip: Philanthropy News Digest)