Teaching Trusts & Estate as Critical Wealth Genealogy

Allison Tait–

Step into a Trusts & Estates classroom and you’ll find the first thing most students learn is that the guiding principle in U.S. wealth transfer law is freedom of disposition. As the Restatement (Third) of Property tells us: “The organizing principle of the American law of donative transfers is freedom of disposition. Property owners have the nearly unrestricted right to dispose of their property as they please.” From the very beginning, students are trained to understand that wealth transfer law is designed to facilitate testator intent, which is the lodestar of both rulemaking and interpretation.

Teaching Trusts & Estates from a perspective of critique, accordingly, starts with an inquiry into the foundations of this core principle and an excavation of its genealogy, as defined through critical theory. Focusing on the critical genealogy of unrestricted property disposition rather than the principle itself requires that we identify not the “origins” of inheritance practices but “the accidents, the minute deviations—or conversely, the complete reversals—the errors, the false appraisals, and the faulty calculations that gave birth to those things that continue to exist and have value for us.” (Foucault, Nietzsche, Genealogy, History)

Consequently, in the classroom we not only inquire into the contingencies of history and the social practices that have shaped and reshaped the doctrine; we also focus on outcomes, rules, and reversals that deviate from and push against the principle of freedom of disposition. And indeed, from this perspective, we can glimpse several ways in which freedom of disposition is not all-encompassing but, rather, bounded. Freedom of disposition is bounded for individual testators by the norms of family formation and freedom of disposition is bounded for certain groups by the lack of material resources that would allow them to benefit from rules designed for families with income and wealth. These forms of boundedness, unearthed through critical genealogy, reveal a more nuanced conception of testamentary freedom while underscoring the substantial privileges that come with both family status and wealth.

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The New Trust Code

Allison Tait–

Legal scholars who care about how law creates wealth and power cannot afford to disregard the trust. As Katharina Pistor mentions in her recent book, The Code of Capital, the trust stands out as one of Anglo-American law’s “most ingenious modules for coding capital.” Trusts are a longstanding component of the “feudal calculus” that Pistor shows us is still “alive and kicking” in our financial regulation. Since their inception in the early eleventh-century in England, trusts have been essential instruments in the great and continuing quest to preserve and protect family wealth.

Trusts have always played a central role because they partition assets, thereby confusing the question of true ownership. That is to say, because trusts divide legal and equitable ownership, the real owner of the assets – the beneficiary – doesn’t have legal title to the assets and the legal owner – the trustee – doesn’t have any real rights to the property. In this way, trusts magically code their managed wealth as obscure and unavailable, without a true owner who can be held accountable for debts and obligations. As Roger Cotterrell pointed out some thirty years ago, “[t]he trust provides a way of freeing the property owner from constraints which the ideology of property otherwise imposes on her or him through its logic.” Accordingly, trusts have helped high-wealth families avoid unwanted taxation, shelter assets from surviving spouses, circumvent all manner of creditors, and protect family fortunes from spendthrift children.

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