Hearst Fortune Hidden 75 Years

William Randolph Hearst, the founder of the Hearst media empire, died in 1951, but the trust holding his fortune is still active and private. The trust's persistence is made possible by an obscure legal concept called the rule against perpetuities, which traditionally limited the duration of trusts.

The trust's termination is tied to the last surviving family member alive in 1951, meaning it will remain private and active until that person has passed away. This has allowed the Hearst family to keep their beneficiary lists and asset inventories private for over 75 years, as a properly funded trust skips probate entirely.

One of the key benefits of a trust like the one set up by Hearst's lawyers is that it keeps the details of the estate private. Unlike a will, which becomes public record, a trust can keep beneficiary lists and asset inventories out of the public eye. This is because a properly funded trust does not have to go through probate, the legal process of settling an estate.

However, irrevocable trusts like the one holding the Hearst fortune also have some significant drawbacks. For example, they hit the top federal income tax bracket at far lower income thresholds than individuals face, and trustee fees can compound over decades.

## What is the rule against perpetuities? The rule against perpetuities is an obscure legal concept that traditionally limited the duration of trusts. Under traditional common law, trusts could not run indefinitely, and interests had to vest within a specific window: the lifetime of someone alive when the trust was created, known as a life in being, plus 21 years. However, lawyers discovered that by naming a group of living people as the measuring lives, the clock would start ticking, allowing the trust to persist for a much longer period.

## Why it matters The fact that the Hearst trust has been able to remain private and active for over 75 years has significant implications for estate planning and wealth management. It highlights the importance of careful planning and the use of legal workarounds to achieve desired outcomes. The Hearst trust is a prime example of how a well-structured trust can be used to maintain privacy and control over a large estate, even after the founder's death.

The persistence of the Hearst trust also raises questions about the fairness and transparency of the estate planning system. While the trust has allowed the Hearst family to maintain their privacy, it has also meant that the details of their estate have remained hidden from the public eye for over 75 years. As the last surviving family member alive in 1951 eventually passes away, the trust will finally be terminated, and the details of the estate will become public record.