Perpetual Purpose Trust​


A Perpetual Purpose Trust is a trust that’s created for a purpose (something) rather than for the benefit of a person (someone). Unlike most Purpose Trusts, which commonly have a 21 years span or end with the death of the grantor, a Perpetual Purpose Trust runs indefinitely. There are some time limitations if the trust owns property.

Jurisdictions: United States, 4 States have trust laws that meet all the criteria for a Perpetual Purpose Trust as it applied to steward-ownership: Delaware, New Hampshire, Wyoming and Maine. 2 States permit the concept, but with constraints: Nevada and South Dakota.  

Key Elements of Perpetual Purpose Trust

A Perpetual Purpose Trust includes a trust agreement, which is a governance mechanism that describes who has what say in the operations of the trust and what powers the trustees have.

With a Purpose Trust, a trust enforcer (can be one or more persons) is appointed to make sure the purpose of the trust is fulfilled. They stand in place of the trust beneficiary to enforce purposes of the trust and have the authority to seek court action, if necessary. The enforcer does not have the power to change the trust situs, change or modify the status of the trust, or its beneficiaries/purpose. The appointment/removal powers are stated in the Trust Agreement and are either held by the Trust Protector Committee or the Operating Company Board of Directors.

The Trust Protector Committee is the party appointed in the trust agreement to advise the trustee and ensure the trust pursues its purpose. The Trust Protector Committee approves distributions from the Trust. They have the authority to modify the Trust Agreement with limitations on changing its purpose. They also have the authority to remove or replace a trustee and to terminate the trust in conjunction with other parties. The Trust Protector Committee elects the operating company board of directors.

A corporate trustee in the State where the Perpetual Purpose Trust is located may also need to be appointed, e.g., Delaware Corporate Trustee. The trustee’s role is often focused on administrative matters, e.g., tax reporting, trust distributions, etc.

Advantages & Disadvantages


The Perpetual Purpose Trust structure grants a lot of flexibility in how Trust Agreements are structured, the purpose of the trust, and how the operating bodies relate to each other. As a result, it’s easy to include different stakeholder groups, e.g., vendors, employees, etc. into the Trust Agreement.

Unlike other steward-ownership models, companies only need to set up one entity for a Perpetual Purpose Trust. There are also no issues with tax authority with this model, and companies do not need approval from tax entities for this structure.

Delaware is by far the most common place to start a US business. Delaware corporate law is well known by corporate and financial attorneys, including those wanting to integrate B corporation status.


Setup and operation of a Perpetual Purpose Trust can be expensive depending the company’s size, the number of trustees, and the amount trustees are paid.

Dividend income received by a trust is taxed at the highest individual tax rate. Thus, most PPT companies factor all distributions to stakeholders into their pre-trust operating budgets.

Perpetual Purpose Trusts are only possible in six States in the US at the moment.

There is no legal owner in a Perpetual Purpose Trust. Everyone acts as an employee. This can be a disadvantage as individuals may not feel same motivation or responsibility to the company as “owners” in other steward-owner models.