Trusts & Estates and Family Law

Charitable & Non-Profit Organizations

Representing organizations charged with the public trust poses unique challenges. Meeting them requires a blend of legal insight, tax knowledge and public sensitivity. Stites & Harbison has developed that insight, knowledge and sensitivity through representing many of the areas largest public universities and hospitals, churches and religious organizations, social and civic organizations, trade associations, and both public and private foundations.

Public Charity and Non-Profit Organizations

Stites & Harbison organizes and represents non-profit corporations, charitable trusts and other charitable ventures. It advises clients with respect to exemption under Sections 501(c)(3) and 509 of the Internal Revenue Code (and other Sections of the Internal Revenue Code) and under Section 170 of the Kentucky Constitution. It also advises clients about the tax treatment of proposed transactions and the impact of same upon their tax status. The firm represents clients before the Internal Revenue Service in connection with tax audits and private letter ruling requests. Such representation frequently involves issues of unrelated business taxable income and for-profit subsidiaries. The firm also advises clients regarding sales and use tax issues.

Fiduciary Responsibility

Stites & Harbison advises trustees, boards of directors and other fiduciaries with respect to their fiduciary responsibilities. For example, the firm recently provided advice to a board of directors regarding their fiduciary duties in connection with the orderly liquidation of a financially troubled non-profit corporation. The firm assists clients in developing, implementing and maintaining qualified pension plans of all types, including representing clients in fiduciary matters with the United States Department of Labor. The firm's lawyers also represent clients in federal and state court litigation concerning claims for fiduciary liability and related issues.

Conflicts of Interest

The firm has developed a comprehensive understanding of the special needs of entities invested with the public trust -- entities whose actions are scrutinized not only by regulatory bodies, but also by members of the news media and special interest groups. Stites & Harbison has developed an intimate familiarity not only with the conflict of interest issues that arise in connection with public projects and public procurement law, but also with the more practical conflict issues relating to the perceptions that often surround such projects.

Development Advice

The firm works closely with the development offices of non-profit institutions on matters ranging from simple estates to complex tax issues. Recent examples include establishing the first pooled income fund in the United States holding real estate, establishing individual charitable remainder (annuity and uni) trusts, and charitable gift annuity programs for smaller institutional donors. The firm investigates complicated interpretive matters affecting all phases of non-profit development, including interpretation and administration of endowment funds and related tax consequences, and will interpretations and contests.

Intermediate Sanctions

Stites & Harbison counsels tax-exempt organizations concerning the Taxpayer Bill of Rights "intermediate sanctions" in the form of excise taxes that can be imposed against "disqualified persons" and organization managers who benefit from an "excess benefit transaction."


"Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. [F]or nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions." —Judge Learned Hand in the Dissenting Opinion to Commissioner of Internal Revenue v. Newman, 159 F.2d 848 (2d Cir. 1947)

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Client Alerts

Retirement Plans: How to Guard Against Fiduciary Liability

In recent years, we have seen more and more ERISA class action claims against retirement plan sponsors and committees for breach of fiduciary duty. In the past, such claims were generally only made against very large plans but we are starting to see claims against smaller plans. The primary allegation is often that the fiduciaries failed to seek the lowest fees available or put another way the fiduciaries were “asleep at the wheel.” By one report, 463 lawsuits have been filed over the last eight years claiming fiduciaries failed to obtain the lowest available fees. Lexington office attorney Andy Jacobs takes a look at the issues in this Stites & Harbison Client Alert.

by Andrew R. Jacobs March 28, 2024
Press Releases

Sara Elrod Ruml Joins Stites & Harbison

COVINGTON, Ky.—Stites & Harbison, PLLC welcomes attorney Sara Elrod Ruml as Counsel to the firm based in the Covington and Louisville, Ky., offices. She joins the Trusts & Estate Planning Group.

by Stites & Harbison, PLLC September 22, 2023