The stripping of the trust: A study in legal evolution

The law of trusts has spent the last twenty years rapidly shedding many traditwnal requirements, forms, and rest rution,s which imposed liability on negligent trustees, protected vulnerable beneficiaries, and preven ted the use of trusts to avoid the claims o[settiorc' and beneficiaries' creditors, inclwhng their spouses, their children, and their govern mentc. 'I'his article studies seven as/ects of this stripping 0/the trust, examines its consequences from both a distributive justice and a corrective justice point of view, and inquires whether the resulting stripped-down model coheres with the traditional Junctionality of donative private trusts. I found that most of the cui rent reforms have welfare-reducing distributive consequences, in some cases inflicting externalities on all except the parties to a given trust, in others transfemng value from seniors and beneficiaries to the trust service providers serving them. Most of the reforms discussed also create pot ential fOr infringements of corrective justice which either did not exist, or was less significant, pre-reform. I conclude that all hut one of the seven reforms I examine should be reversed.