Who is Afraid of Perpetual Trusts?

Abstract

Throw a stone into a room full of law professors, and it is virtually impossible to hit someone who will defend perpetual trusts. This essay takes up the most recent objections lodged by Lawrence Waggoner, Professor Emeritus at the University of Michigan School of Law, and Reporter for the Restatement (Third) of Property: Wills and Other Donative Transfers. He laments a bygone era when a wise pater familias maintained a personal relationship with the local banker, and genteel lawyers took their leads from uniform law commissioners. Perpetual trusts raise important policy concerns, to be sure, but they are far from "folly," as Professor Waggoner calls them. The legal system does not yet have enough experience with perpetual trusts to understand their full implications. A more prudent approach would be to embrace a variation on the long-standing approach to perpetuities problems: let’s wait and see.

Keywords: perpetuities, trusts, perpetual trusts, rule against perpetuities

JEL Classification: K34, K39, K19