Another Take on Perpetual Trusts

Eric Rakowski, the Edward C. Halbach Jr. Professor of Law at the University of California, Berkeley – School of Law (Boalt Hall), has recently authored an article entitled The Future Reach of the Disembodied Will.

Prof. Rakowski describes his article as follows:

Many states now allow people to create private trusts of unlimited duration. Is it unjust or poor social policy to allow settlors to benefit future people without time limits on trusts? Although perpetual trusts may be self-indulgent impositions on posterity, no leading theory of distributive justice seems to bar their creation. So long as trustees are empowered to sell and determine the use of trust property, utilitarian and other consequentialist theories suggest that the availability of perpetual trusts offers more social advantages than drawbacks, though some would subject trust accumulations or distributions to redistributive taxes aimed at helping the less fortunate. Not surprisingly, libertarian theories would give donors the freedom to create temporally unlimited trusts as well. Less obviously, liberal egalitarian theories probably should permit people to create perpetual trusts, provided that trust property remains alienable by trustees and that certain benefits are taxed so that the less lucky may share in the good fortune of trust beneficiaries.