Private Law Theory

ABSTRACT
In recent years, much attention has focused on the use and abuse of express trusts. Two sets of situations have generated the most controversy. The first concerns so-called massively discretionary trusts, where trustees are given very wide dispositive powers, including powers of appointment, but also powers to add or exclude persons as potential objects of the trust. The second concern express trusts set up by settlors who retain substantial control over the trust after its creation, whether as trustees, beneficiaries, protectors, settlors, or some combination of these. Various doctrines have been considered by courts and scholars as ways of invalidating these trusts or aspects of their operation, including shams, illusory trusts, the proper purposes doctrine, and prohibitions against transactions defrauding creditors.

Building of this topical area which has generated wide scholarly and judicial interest, this chapter asks: to what extent can express trusts be invalidated by public policy, with particular focus on these doctrines? I take ‘public policy’ here to refer to considerations that do not concern the interpersonal justice between claimant or defendant, as expressed by their rights, duties, powers, and liabilities.

The central claim of the chapter is that there are very few instances where express trusts can be invalidated by public policy. Furthermore, such instances are likely to be even rarer today, as drafting practices have evolved. Few exceptions remain, neither of which are specific to the law of trusts but apply more broadly. Instead, properly understood, most recent legal developments have sought to clarify what, conceptually, a trust is. Provided that what the settlor has sought to create falls within the law’s conceptual understanding of a trust, courts rarely interfere. This, however, means that the common law has limited tools to address problematic uses of express trusts.

Leow, Rachel, Express Trusts and Public Policy (September 9, 2026). Forthcoming in Zhong Xing Tan, Cheng-Han Tan, and Ying Liew (eds), Commercial Law and Policy (Hart Publishing 2027).