In Wikipedia: Trust law


A trust is formed whenever a person (the settlor) gives legal ownership of an asset (the trust property) to another person (the trustee) on condition that they apply the income and gains arising from that asset for the benefit of one or other people (the beneficiaries). Trusts can be established verbally but typically take written form. Trustees are frequently professional people or firms charging fees. Trusts are usually of one of three types:

  • discretionary trust
  • charitable trust
  • interest in possession trust.

In recent years the trust law of many secrecy jurisdictions has diverged markedly from that of the UK on which much of it was originally based, allowing for example, the creation of revocable trusts. These are considered sham trusts or mere nominee arrangements in UK law but are now commonplace in Tax havens.

Source: The language of Tax: A glossary of taxation terms (page 41) (Tax Justice Network: Mapping Financial Secrecy.)


Banakas (2006) clarifies how principles and dogmatic structures of Property rights in Continental European legal systems cause the absence of the Trust in these legal systems. The division of the powers and benefits of ownership that lies at the foundation of the Trust is shown to be historically and dogmatically untenable in Civil law systems. Moreover, the different historical evolution of sources of liability in Civil law and Common law systems is shown to have prevented institutions functionally similar to that of the Trust from emerging on Continental European soil. ( Stathis Banakas (2006) Understanding Trusts: A Comparative View of Property Rights in Europe )


The Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition is a multilateral treaty developed by the Hague Conference on Private International Law on the Law Applicable to Trusts.


Note that (already) more than five centuries ago, the avoidance of paying land taxes and other feudal dues, was the driver for lawyers to develop ''the use,'' a primitive form of trust (Equity (law) in Wikipedia) and ''jurisdiction shopping.'' This prompted the creation of the ''Statute of Uses 1535'' (Wikipedia), from which the doctrines of the trust grew (Eric Ives, cited in the Wikipedia article).