Abstract:
The law of trusts has spent the last twenty years rapidly shedding many traditional requirements, forms, and restrictions which imposed liability on negligent trustees, protected vulnerable beneficiaries, and prevented the use of state trust law to avoid the claims of settlors’ creditors, including their spouses, children, and federal and state governments. This Article studies the “stripping of the trust” so as to develop a new paradigm for identifying proposed law reforms likely to reduce social welfare before they are enacted: I show that injurious proposals can be identified according to the legal evolutionary script they followed. I propose an innovative bright-line rule: reforms enacting into law legal and financial service providers’ earlier opt-outs from the existing default law, and reforms originating in inter-jurisdictional contests over clients, invested funds, jobs, and tax revenue, should be carefully scrutinized before enactment, with particular attention to their likely distributive results. Such reform proposals tend, more than others, to reduce overall social welfare while benefitting legal and financial service providers and some of their privileged clients.
Adam S Hofri-Winogradow, The Stripping of the Trust: From Evolutionary Scripts to Distributive Results. Ohio State Law Journal 75:3, 529 (2014).
First posted 2014-06-11 17:20:44
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