Hillsdale Coll. v. Board of Curators of the Univ. of Mo., No. 17SL-CC03833 (St. Louis Cty. Ct. filed Oct. 18, 2017)
Sherlock Hibbs left a $5 million bequest in a testamentary trust to endow three chairs and three professorships at the University of Missouri's college of business. The trust's terms required that each of the six appointees be a “dedicated and articulate disciple of the Ludwig von Mises (Austrian) School of Economics”, failing which the bequest was to go to Hillsdale College. The trust further required the University to certify to Hillsdale College every four years that the appointments complied with the conditions stated in the trust.
Hillsdale College has sued the University, claiming that the University put then existing professors who were not followers of the Ludwig von Mises Austrian School of Economics into five of the six positions endowed under the trust. If the court agrees, the trust dictates that the money is to go to Hillsdale College, which offers courses in Austrian economics and holds Mises' personal library.
This case gives a great example of a potentially effective way for a trustmaker to include safeguards in a trust. By placing a contingency on a gift, you may feel more comfortable about making large bequests, whether to a university, a charity, or an individual. The inclusion of checks and balances—such as requiring the current beneficiary certify compliance to a contingent beneficiary—the trustmaker can feel peace of mind that his or her wishes will be carried out or that an interested party will step in to remedy the situation if there is a violation of the trustmaker's terms.