Dynastic trusts protect personal autonomy in hierarchical society
A dynastic trust allows for a degree of personal autonomy that would otherwise be difficult to achieve in a global economy characterized by punitive tax rates, labor concentration in hierarchical corporations and public sector agencies, and increasingly precarious property and privacy rights. A well-designed dynastic trust provides generations of beneficiaries with at least the minimum material support necessary for physical survival. A dynasty trust can also be a perpetual source of funds for new business investments and philanthropic projects.
The term personal autonomy generally means the ability to select options and make decisions based on one’s own values and preferences. Personal autonomy implies the ability to internalize values and beliefs, observe and analyze situations, discern one’s desires and preferences, set goals and identify a corresponding course of action. Personal autonomy is strongly correlated with human dignity and self-respect.
Very few members of our society actually control the means of their physical sustenance. Most of us work for wages or salaries as employees in private companies or government agencies. As a result, our jobs are subject to the decisions of managers over whom we have no material control. Some people own businesses and do not have a formal boss, but are nevertheless subject to the direction of clients, government regulators, tax collectors, campaign contributors, or prevailing public opinion.
In any case, we all pay various combinations of rent, mortgage, medical and dental bills, car payments, sales taxes, business taxes, income taxes, and real estate taxes, which are always increasing and mercilessly collected. With few exceptions, people are trapped in an economic system that offers little flexibility in a relentless struggle to pay their monthly bills. Economic efficiency requires routine compliance with workplace procedures and acceptance of management decisions. While such conformity makes economic sense, it is somewhat inconsistent with notions of personal autonomy. Thus, despite living in a society that formally grants liberal political and personal freedoms, in practice most of us have little opportunity to experience personal autonomy in the workplace. We legally have the right to protest or quit a job when we disagree. In practice, we have to think about the serious existential consequences of disagreement. Consciously or unconsciously, every person who has to make a living knows that conformity puts food on the table and nonconformity fires it.
This is not to say that personal autonomy cannot exist in our economy. But even in the best of circumstances, conflicts often arise between an individual’s values and the goals of his or her boss. As long as the individual surrenders to the organization, which he is likely to do if his physical livelihood depends on it, personal autonomy is lost.
The loss of personal autonomy in today’s society is a loss of the personal dignity of the individual. However, just as important for society as a whole is the resulting moral vacuum in the workplace. An individual accused solely of performing an economic function in a hierarchy, focused on satisfying a supervisor and achieving profit-oriented goals, is not psychologically capable of making moral decisions or resisting immoral ones. This phenomenon could help explain the lack of moral fortitude among politicians, government regulators, journalists, bankers, and deepwater oil producers.
A dynasty trust provides at least a degree of financial independence that insulates the beneficiary from the financial pressures described above. It allows for the kind of personal autonomy necessary for an individual’s self-respect and for honest and moral decision-making.
Critics suggest that dynastic trusts encourage irresponsible and unproductive behavior in beneficiaries because their economic survival is somewhat guaranteed no matter what they do. The reality does not conclusively support that view. The history of the United States contains countless examples of heirs to family wealth who made significant contributions to society, even though they could easily have survived their entire lives doing nothing. Furthermore, there is historical support for the idea that inherited wealth enabled people to do good work that they otherwise would not have done. Furthermore, the possibly irresponsible conduct of individuals is already protected now by the limited liability of corporations, LLCs, and workers’ compensation laws, and asset protection by a dynasty trust doesn’t really alter the legal landscape there.
A dynasty trust does not guarantee personal happiness or moral conduct in society. However, a dynastic trust could provide the financial independence and security that allow for the development and exercise of personal autonomy, which is a necessary component of human dignity and moral decision-making.
Copyright 2010 – Thomas Swenson