The Demand for Fiduciary Services: Evidence from the Market in Private Donative Trusts

73 Pages Posted: 8 Sep 2016 Last revised: 16 Jan 2024

See all articles by Adam S. Hofri-Winogradow

Adam S. Hofri-Winogradow

Peter A. Allard School of Law, the University of British Columbia

Date Written: September 7, 2016


Recent revelations on the use of fiduciary services by the wealthy and political leaders raise concerns regarding the use of such services for tax and creditor evasion. Yet given the secrecy shrouding much of the fiduciary industry, we do not know which fiduciary services are used for such purposes and to what extent. Shining a light on a particularly obscure part of the industry, this Article presents and analyzes the results of the first-ever global survey of professional service providers to private donative trusts and a series of interviews with professional trust service providers in five countries. I report new and unprecedented data on four controversial features of current trust practice: perpetual and extreme-long-term trusts, trust terms exonerating trustees from liability to beneficiaries, tools rendering beneficiaries' entitlements inaccessible to their creditors and the control of trusts by their creators. I found that trusts drafted to subsist for more than a century are fairly common, especially offshore, but many such trusts are not in fact likely to survive that long. Trustee exculpatory terms are now standard in donative trusts serviced by professionals, with most settlors neither demanding nor receiving any quid-pro-quo for their inclusion. Anti-creditor techniques protecting beneficiaries' entitlements are even more ubiquitous than trustee exculpatory terms, particularly so in trusts serviced by U.S.-resident providers. Many protected beneficiaries are not less able than the average person to take care of their financial affairs. Finally, express reservation of powers by trust settlors is a majority phenomenon in the U.S., but a minority one elsewhere. The actual control of trusts by their settlors is likewise far more common in the U.S. than elsewhere. I conclude the Article with recommendations for law reform making trusts likelier to benefit their beneficiaries and less likely to avoid duties owed to creditors and the taxpaying public.

Keywords: fiduciaries, fiduciary services, fiduciary relationships, fiduciary law, trusts, trustees, service providers, exculpation, exculpatory terms, exemption clauses, survey, empirical legal studies, perpetual trust, spendthrift trusts

JEL Classification: C42, D43, D52, D61, D63, F21, F32, G21, G23, H23, H30, H73, J26, J44, K11, K34, L13, L14, L15, L84

Suggested Citation

Hofri-Winogradow, Adam S., The Demand for Fiduciary Services: Evidence from the Market in Private Donative Trusts (September 7, 2016). 68 Hastings Law Journal 931-1006 (2017), Available at SSRN:

Adam S. Hofri-Winogradow (Contact Author)

Peter A. Allard School of Law, the University of British Columbia ( email )

1822 East Mall
Vancouver, BC V6T 1Z1


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