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.
