A dynasty trust allows for a degree of personal autonomy that would otherwise be difficult to achieve in a global economy characterized by punitive tax rates, concentration of jobs in hierarchical corporations and public sector agencies, and property and privacy rights increasingly more precarious. A well-designed dynasty trust provides generations of beneficiaries with at least the minimal 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 wishes 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 do not have substantial control. Some people are business owners and do not have a formal boss, but are nevertheless subject to the direction of customers, government regulators, tax collectors, campaign contributors, or the prevailing public opinion.
In any case, we all pay various combinations of rent, mortgage, medical and dental bills, car payments, sales tax, business tax, income tax, and real estate tax, which are always increasing and are being collected without mercy. With few exceptions, people are trapped in an economic system that offers little flexibility in a tireless 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 few opportunities to experience personal autonomy in the workplace. We legally have the right to protest or quit a job when we disagree. Practically, we have to think about the serious existential consequences of disagreeing. Consciously or unconsciously, every person who must earn a living knows that conformity puts food on the table and that nonconformity causes them to be fired.
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 boss. If and when the individual surrenders to the organization, which he will likely do if his physical sustenance depends on it, personal autonomy is lost.
The loss of personal autonomy in today’s society is a loss of the personal dignity of an individual. However, equally important to society as a whole is the resulting moral vacuum in the workplace. An individual accustomed only to performing an economic function in a hierarchy, focused on satisfying a supervisor and achieving goals for profit, 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 deep-sea oil producers.
A dynasty trust provides at least a degree of financial independence that insulates the beneficiary from the economic pressures described above. It allows the kind of personal autonomy necessary for an individual’s self-respect and for honest and moral decision-making.
Critics suggest that dynasty trusts encourage irresponsible and unproductive behavior in beneficiaries because their economic survival is somehow guaranteed no matter what they do. Reality does not conclusively support that point of view. The history of the United States contains countless examples of heirs to family wealth who made significant contributions to society, although they could easily have survived their entire lives doing nothing. In addition, there is historical support for the idea that inherited wealth allowed for good work on the part of individuals who would not have done otherwise. Additionally, possibly irresponsible conduct by individuals is already protected now by limited liability 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 dynasty 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
