The origins of Trusts…

February 7, 2013 - by Nida U.

Trust is a tool that is of somewhat similarity to a will, therefore development of this concept dates back when Roman law had developed this concept. First it was the development of the concept fidecommissum, which translates from latin “trust to commit” (fides – trust, committere – to commit). However this concept was never applied when creator would still be alive, hence just like a will.

The Trust we now know as a vehicle (legal relationship), which is used for the protection of one’s assets, property, estate, money, wealth e.t.c., originates, or shall I say was developed in England. One might say that the origins of trust are just as old as the origins of the term use. And use of land has existed since long ago, since medieval times - as long as 13th century. Why is the 13th century point of acknowledgement? This was because in this time the crusades were taking place and this is when trust was being used to convey ownership to a friend or someone trusted for the time while one would go into battle.

Quiet often the crusaders would return, but under that times law the land would already be in hands of the trustee, and the trustee would not have to return this land. This is when Henry VIII in 1535 pushed through the statues of uses. Basically this when benefit of the land and legal title was separated, the effect was to transfer legal title to the beneficiary use. However As we could imagine this was not working properly, as created a way of using this as a sham device for avoiding the fees, consequently this statute was latter on avoided in general. Over and over more returning crusaders would be returning and in the Court of Chancery more and more cases would be decided in favor of these crusaders. Because the Lord Chancellor (from the Court of Chancery) would acknowledge that a separate equitable title under a trust existed, that would be the beneficial title and this title could be enforced upon the legal title, which would be the title that was conveyed to the trustee. In other words the court acknowledged and the term of “use upon a use” was created, when legal title was vested from A to B, but B would hold it for the benefit of C for the beneficiary. This is when the so called the maxims of equity evolved, as we could see Lord Chancellor also found it unconscionable for the true owner not to get what was his! Equity acts on person, like my teacher used to say Equity is Equality!

Read more about trust parties in my new post "Settlor, Trustee, Beneficiray roles in a Trust"

Thank you for reading my post! And you are welcome to leave comments, feedback, sugestions for other posts or contact me for more information.

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