M. W. Lau
- Published in print:
- 2011
- Published Online:
- May 2011
- ISBN:
- 9780199602407
- eISBN:
- 9780191725203
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199602407.001.0001
- Subject:
- Law, Trusts
This book provides an economic account of why trusts exist and how trust law should be shaped. The trust is a key legal institution in the common law world but it has been neglected by the law and ...
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This book provides an economic account of why trusts exist and how trust law should be shaped. The trust is a key legal institution in the common law world but it has been neglected by the law and economics community until recently. Borrowing theories and doctrines from corporate law and economics, scholars have variously analysed and described the trust as a tripartite contract, a nexus of contracts, and even a legal entity. These obligational approaches overlook the unique features of trusts for which corporate legal theories have no explanation. Most importantly, they fail to account for the nature of the beneficiary's interest in the trust property. This book presents an original analysis of the common law of trusts, arguing that trust law is about the trust property and the principal parties' relationships with it. At the same time it questions recent trends in trust law, especially those in offshore jurisdictions. Exotic developments such as non-charitable purpose trusts, settlor-retention of wide powers, and generous trustee exemption clauses have become the new normal and, coincidentally, draw analytical support from obligational accounts. This book explains that once trusts are properly understood as property, it becomes obvious why these novel developments can only be for the worse, and should be reversed. It then goes on to develop an analysis of trusts from a proprietary perspective, and applies the property — based approach to the economic analysis of trusts — explaining the economic benefits of trusts as an extension of the law of property.Less
This book provides an economic account of why trusts exist and how trust law should be shaped. The trust is a key legal institution in the common law world but it has been neglected by the law and economics community until recently. Borrowing theories and doctrines from corporate law and economics, scholars have variously analysed and described the trust as a tripartite contract, a nexus of contracts, and even a legal entity. These obligational approaches overlook the unique features of trusts for which corporate legal theories have no explanation. Most importantly, they fail to account for the nature of the beneficiary's interest in the trust property. This book presents an original analysis of the common law of trusts, arguing that trust law is about the trust property and the principal parties' relationships with it. At the same time it questions recent trends in trust law, especially those in offshore jurisdictions. Exotic developments such as non-charitable purpose trusts, settlor-retention of wide powers, and generous trustee exemption clauses have become the new normal and, coincidentally, draw analytical support from obligational accounts. This book explains that once trusts are properly understood as property, it becomes obvious why these novel developments can only be for the worse, and should be reversed. It then goes on to develop an analysis of trusts from a proprietary perspective, and applies the property — based approach to the economic analysis of trusts — explaining the economic benefits of trusts as an extension of the law of property.
M. W. Lau
- Published in print:
- 2011
- Published Online:
- May 2011
- ISBN:
- 9780199602407
- eISBN:
- 9780191725203
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199602407.003.0010
- Subject:
- Law, Trusts
This chapter explores leading trust developments using the property-based account. It first explains the nature of the beneficial interest, which is a residual claim to the assets in the trust fund, ...
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This chapter explores leading trust developments using the property-based account. It first explains the nature of the beneficial interest, which is a residual claim to the assets in the trust fund, subject to claims of trustees, creditors, and other beneficiaries. It further elaborates on why trusts must eventually terminate and why developments such as perpetual trusts and non-charitable purpose trusts are flawed. This chapter also examines trustee exemption clauses and argues that, from an efficiency perspective, they are acceptable only if another party becomes responsible for the trustee's exempted activities. Finally, it argues that there are boundaries to how much a settlor can influence and control a trust. Trusts purportedly for beneficiaries are no longer so when beneficiaries cannot be certain that they hold the residual claim to assets in the trust fund.Less
This chapter explores leading trust developments using the property-based account. It first explains the nature of the beneficial interest, which is a residual claim to the assets in the trust fund, subject to claims of trustees, creditors, and other beneficiaries. It further elaborates on why trusts must eventually terminate and why developments such as perpetual trusts and non-charitable purpose trusts are flawed. This chapter also examines trustee exemption clauses and argues that, from an efficiency perspective, they are acceptable only if another party becomes responsible for the trustee's exempted activities. Finally, it argues that there are boundaries to how much a settlor can influence and control a trust. Trusts purportedly for beneficiaries are no longer so when beneficiaries cannot be certain that they hold the residual claim to assets in the trust fund.
Nicholas Le Poidevin
- Published in print:
- 2013
- Published Online:
- January 2014
- ISBN:
- 9780199685349
- eISBN:
- 9780191770531
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199685349.003.0008
- Subject:
- Law, Company and Commercial Law, Philosophy of Law
This chapter examines the consequences of a finding of sham, especially for third parties who may have relied on the sham transaction or who may ostensibly stand to benefit from it, such as the ...
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This chapter examines the consequences of a finding of sham, especially for third parties who may have relied on the sham transaction or who may ostensibly stand to benefit from it, such as the beneficiaries of a sham trust. It argues that the settlor’s inability in a sham trust to recover the assets is based on public policy, and that same public policy should not be deployed to prejudice those whom it was designed to protect.Less
This chapter examines the consequences of a finding of sham, especially for third parties who may have relied on the sham transaction or who may ostensibly stand to benefit from it, such as the beneficiaries of a sham trust. It argues that the settlor’s inability in a sham trust to recover the assets is based on public policy, and that same public policy should not be deployed to prejudice those whom it was designed to protect.
