Reconceptualizing the fully-secret trust

What is it about?

This article conceptualizes the fully-secret trust in a new way. Fully-secret trusts are 'disguised' trusts. In a will it looks like the testator is making a gift of property, but actually the person receiving the gift must hold it for someone else. This article proposes that, contrary to conventional theory, the person who receives the gift is actually the one who creates the trust.

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Why is it important?

For centuries, courts and scholars have not been able to satisfactorily explain why fully-secret trusts are enforceable. The problem is that fully-secret trusts do not comply with the Wills Act, which generally requires that testamentary instruments be in writing. Under my theory, fully-secret trusts are non-testamentary and thus need not be in writing. Additionally, the theory I advance explains how an executor can distribute the gift as a gift, but the recipient can then be obligated to hold it in trust.

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