A Trust is for the Beneficiaries
and a Refuge is for the Birds
When I was in college I worked a summer job at the
Sacramento National Wildlife Refuge (SNWR), just south of the little
farm town of Willows, CA. Each year, millions of migratory birds travel
the Pacific Flyway and more than half of them use the SNWR as a feeding
and rest stop. In the fall, there are so many birds it looks like a
scene from Alfred Hitchcock’s The Birds5 which, according to my
coworkers, it was. They claim that in 1962 they helped a “Hollywood”
film crew shoot scenes of thousands of excited birds by setting off duck
bombs in fields full of ducks and geese. I was never able to verify
their claim, so it may have been a “rural legend.” (Our town wasn’t
large enough to qualify for urban legends.)
Working at the refuge was a great summer job.
I did all kinds of odd jobs, but my biggest tasks were replacing
fencing and putting in sign posts. Over a couple of summers we
replaced about 20 miles of fencing. My best guess is that I
personally installed 5,000 metal t-posts, 250 wooden fence
posts, and 200 sign posts. However, those numbers could be
wrong. As the t-shirt I received from my kids keeps reminding
me, “The older I get the better I was.”
The fence I worked on circled the outer edge
of the refuge. Inside this perimeter we grew rice and maintained
wetlands for the benefit of migratory birds and other animals
that used the refuge. This was consistent with the mission of
the Wildlife Service which is “…to conserve, protect, and
enhance fish, wildlife, plants, and their habitats.” To fulfill
this mission, the Wildlife Service acquires refuge land under
legislative laws, executive orders, or other means. The purpose
of each refuge is determined based upon “…the law, proclamation,
executive order, agreement, public land order, donation
document, or administrative memorandum establishing,
authorizing, or expanding a refuge…” For example, the SNWR was
created by Executive Order in 1937 with the stated purpose that
it was to be used “…as a refuge and breeding ground for
migratory birds and other wildlife.”
A refuge is very similar to a trust. According
to Black’s Law Dictionary, a trust “…is a property
interest held by one person (the trustee) at the request of
another (the settlor) for the benefit of a third party (the
beneficiary).”6 In the SNWR’s case, the property is held by the
Wildlife Service at the request of the President for the benefit
of the birds. Just as the executive order set out the purpose of
the refuge and the conditions under which it was to be managed,
so does a trust document describe the purposes and conditions
under which trust assets are to be managed. The settlor
(creator) of a trust has the freedom to set the rules for how
the trust assets are to be managed and who the assets are going
to benefit. The duty of the trustee is similar to the duty of
the refuge manager in that they are both responsible for making
sure the creator’s wishes, as set forth in the trust document,
are carried out in the best interests of the beneficiaries.
Where the gift documents are silent or vague, the refuge manager
relies on the Wildlife Service’s regulations and the trustee
relies on the Uniform Prudent Investor Act (“Act”).
If the trust document is in conflict with the
Uniform Prudent Investor Act, the trust trumps the Act because,
as the Act notes, its requirements are default rules -- that is,
“rules that the settlor may alter or abrogate.” The situation is
similar for fiduciaries of charities but not for pension plans,
since the minimum standards of the Employee Retirement Income
Security Act (ERISA) cannot be altered. Nevertheless,
fiduciaries of private trusts, charities, and pension plans all
need to be familiar with both the controlling documents as well
as the applicable laws in order to prudently perform their
duties. Like the wildlife refuge manager, fiduciaries need to
know the conditions and follow the rules if the purpose of the
trust, charity, pension (or refuge) is going to be realized for
the beneficiary, donee, employee, (or bird).
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