Delaware wants to maintain input on multi-billion dollar trust

When Alfred I. du Pont died, he left a multi-million dollar trust to primarily benefit children and the elderly in Delaware.  The state’s Attorney General wants to make sure his wishes are followed.  

Since his death in 1935, the A.I. du Pont Testamentary Trust has increased in value from about $40 million to roughly $4.6 billion as of 2009.  The major benefactor of that money in Delaware has been A.I. du Pont Hospital for Children.  Now, the trustees want to make changes in the way the trust is invested, which has raised concerns for Delaware Attorney General Beau Biden.  Biden has filed a motion in a Florida court to make sure that Delaware’s interests are not harmed by the changes. 

The key question pertains to language in du Pont’s will that requires 51% of the trust be spent on helping residents of Delaware.  “That is what we have to be vigilant about guarding,” Biden said.  “Making sure that the will’s intent is pursued and that emphasis is placed on benefitting Delawareans.”

In the current structure, the trust pays out 3% of its valuation every year.  The majority of that (51%) goes to Delaware’s A.I. du Pont Hospital for Children.  The rest goes to fund other facilities within the Nemours Foundation, mainly in Florida.  Because the trust is based in Florida, a court in the Sunshine State has jurisdiction.  Biden’s office has filed the motion in Florida to be allowed to have a say in the case.

In addition to making a change in the trust to allow it to maintain not-for-profit status in international investments, the trustees also want to consolidate numerous court rulings regarding the trust into one document.  “The idea of consolidating all of this litigation is not a bad idea, and that’s part of the reason why we’re intervening as well.  We just want to make sure that it’s consolidated the right way.”

Biden says there is no indication that the trustees intend to change the trust structure from primarily benefitting Delawareans, and his office is working to make sure that doesn’t happen.  “We don’t want Delaware’s kind of primacy to be ammended out.  That’s my fear.”

In 1980, the trustees signed an agreement with Florida, Delaware and the Nemours Foundation on how the trust would operate.  That agreement prohibits trustees from spending more than 50 percent of the funds outside of Delaware.