01 Jan Ask StoryOne – January
In Ask StoryOne, we answer real questions brought to us by real families. These are the important questions that shape decisions about wealth, legacy, and purpose.
Each Ask StoryOne feature spotlights one question. We share insight shaped by years of experience, grounded in mission, vision, and values.
Is a Perpetual Purpose Trust right for our family?
When families explore advanced estate planning or ownership transition strategies, the topic of a Perpetual Purpose Trust sometimes comes up. It is an emerging idea in the United States, and it often signals that a family is thinking long-term and cares deeply about the future of their business, employees, and community. Practically speaking, as January of 2025, less than 100 purpose-based trusts have been established in the United States. There are potential roles for these within your plan, but the circumstances will need to be fairly unique.
What is a Perpetual Purpose Trust?
A Perpetual Purpose Trust is a type of trust that holds a company or assets so it can continue operating in alignment with a stated purpose rather than for the benefit of an individual or family. They are uncommon in the United States. Roughly 50 have been created so far. Well known international examples include Ikea, and Patagonia is a recent high-profile example in the United States.
Perpetual Purpose Trusts are strategic and often irreversible. We think of these as one-way door decisions. Once created, the trust becomes a permanent part of the business and estate structure, so the decision must be made with long-term clarity.
How do we know if it is a fit?
At StoryOne, we are agnostic about which structures a family uses. What matters most is the proper entity to fulfill the stated goal. If a structure is strategic and clear, we are comfortable helping a family move forward. When evaluating something as significant as a Perpetual Purpose Trust, we first take time to understand the full picture, so the recommendation aligns with purpose, values, and long-term goals.
Most families will not find that a Perpetual Purpose Trust fits their situation. These trusts serve a narrow set of circumstances, generally when a family is ready to separate economic ownership from operational purpose and wants to ensure the business mission carries forward permanently. They can be powerful, but they are not common tools.
How do we help families evaluate various planning options?
Helping families compare various planning options and to align structures with purpose is at the heart of our Estate Plan Design process. Before recommending any advanced tools, we work through three important layers, which often include:
1. Legacy Trusts
Many families already have legacy trusts in place from previous generations. When these exist, we study them closely, including:
- The assets they hold
- How trusts distribute
- Governance and decision making
- Taxation, including estate, gift, income, and generation skipping tax (GST)
- Flexibility and any powers of appointment
- Situs considerations
These factors often shape what is possible moving forward. With legacy trusts, there are various solutions that are available to families, and some are as easy as changing the asset mix or as complex as a court approved reformation.
2. Safety Net Estate Plan
We believe that every family needs an estate plan, which we refer to as the “safety net plan.” The documents included are last will and testament, revocable trust, durable powers of attorney and healthcare directives. We confirm these documents reflect current wishes, accurately name fiduciaries, and support the family’s intent. As a part of this evaluation, we review existing documents to understand and evaluate what is in place currently.
Questions we often ask include:
- Have there been any major changes within your family?
- Has there been any major changes to your balance sheet or net worth?
- Are there any new concerns that you have, that are not addressed in your current documents?
- Have any of your goals changed, since these documents were drafted?
- Are you happy with these documents as they stand today?
- Do they need any updates?
- Have any powers of appointment been exercised or left untouched in existing trusts?
A strong safety net plan creates the foundation for more complex planning.
3. More Complex Strategies
Only after we fully understand legacy structures and core documents do we explore more advanced planning options. These vary widely and may include trusts, entities, or charitable structures. The right tools depend on:
- Your mission, vision, and values
- Your balance sheet
- Which assets are most rapidly appreciating
- Family dynamics
- Business structure
- Irrevocable decisions already made
- Tax considerations
- Your charitable intent and goals
There is no one-size-fits-all answer. The best solutions come after deep listening and a clear understanding of what matters most to you.
Key Takeaways: A Perpetual Purpose Trust can be a powerful way to protect the mission of a business for generations. Yet, because it is a one-way door, it is only right for a narrow set of families and circumstances.
The real value comes from the process. When a family asks about Perpetual Purpose Trusts, it tells us they are thinking intentionally about legacy, stewardship and purpose. And that is exactly where great estate planning begins.