Copley

THE SYLLABUS

Here is the perplexing dilemma facing the trustees of an inter vivos trust when they are given broad powers but must exercise them in an atmosphere heavily laden with conflicting interests. The trustees are given voting control of substantially all the stock of Copley Press, Inc., a large newspaper which had been operated by the trustor as a one-man business. Helen Copley, widow of the trustor and co-trustee, is given broad powers of discretion and by the lead of her husband and counsel elected to continue the business as a family enterprise. The inter vivos trust, with the usual marital and nonmarital trust features, burdened the nonmarital trust with the obligation to pay all death taxes and administration expenses. It was required to sell certain of the stock to raise these funds. Opting for a stock redemption plan under the provisions of Internal Revenue Code section 303, 19 months after the trustor’s death, the trustees were able to achieve a tax-free sale to the Copley Press of enough stock to pay the death taxes on an installment plan. About a year and a half later, the redemption price was set at $35, which was the same value the Internal Revenue…