Viewing Minnesota’s school trust as a “whole trust” is a paradigm shift for school trust land managers and trustees. The idea is simple—that the sum of all of Minnesota’s school trust assets are greater than its individual parts. It has historically been understood that the school trust consists of 2.5 million acres of united surface-mineral estate, 1 million acres of severed mineral estate and a financial asset currently valued at more than $1.7 billion. This “separate and distinct asset” limits the economic potential of a perpetual trust such as Minnesota’s school trust.
Considering the trust under a whole trust concept provides an opportunity to balance the income needs of current beneficiaries with the duty to preserve long-term economic value for future beneficiaries. This is consistent with Minnesota’s statutory goals to distribute investment dividends and interest to support current beneficiaries while preserving the ability to support future beneficiaries by securing maximum long-term economic returns through sound natural resource conservation management.
Adopting the whole trust concept could aid in balancing equities among current and future beneficiaries. All of Minnesota’s school trust assets (financial, mineral, timber, real property, etc.) must be managed in a way to recognize long-term economic returns. The whole trust concept achieves this goal by:
Additional information and presentations of the Whole Trust concept can be found in the following publications:
Principles of State Trust Portfolio Management