Jamie Glister: What is Trust?

What is a trust? 

It is now very common to think of trusts as imaginary boxes. A box is created by the settlor, who puts some money in it, and other people subsequently add more money (or other property) to the box.  The idea is that these people are adding property to a box that already exists, and which they did not create. 

Seeing trusts like this can be very attractive. Conceptually, it is easy to think of transfers ‘into’ and ‘out of’ trust boxes. It also helps to emphasise the point that, while trustees hold legal title to the trust property, they ought to keep that property separate from their own.  Perhaps more nefariously, seeing trusts as boxes also means the identity of the person who contributes the substantial trust assets can be kept hidden because their name will not appear on the trust deed as the settlor. This can deflect arguments that the trust is a sham or help with avoiding anti money laundering regulations (which require the identity of settlors to be recorded).  

This seminar will explore this “entification” of the trust and discuss when and why it is appropriate to think of trusts as boxes, and when and why it is not. 

JAMIE GLISTER | Professor of Law 
The University of Sydney Law School