The Law of Trusts
Before starting this review, I searched the office for the well-thumbed first edition of Thomas and Hudson, to remind myself of its contents. Having failed to find it in the library did not surprise me; in my hunt around the office, I collected a school of enthusiastic reviews from my colleagues, who have found this work invaluable.
Against that background, the task of critiquing a second edition of such an exemplary first edition of this scholarly contribution is a difficult one. One could so easily take for granted the skill and efforts of the first, but, I am pleased to report, the second does not disappoint.
The second edition generally maintains the same overall format and structure as the previous edition but has been helpfully expanded in certain areas with further useful new material.
A good deal has changed in the law of trusts (both statute and case law, as well as in their practical application) since Thomas and Hudson’s first edition, which was published in 2004. There have been in excess of 200 relevant cases decided since the first edition, and a number of new statutes and regulations. I am told by the Preface that one third of the book has been rewritten or redrafted to accommodate these without expanding the book excessively. However, you might notice a reduction in the font size!
As in the first edition, Section One: General Principles is the comprehensive but practical account of the principles on which the general law of trusts is based, including helpful and sensible sections on trustees’ duties, powers and rights. Section Two: Specific Trusts deals with the use of trusts in practice.
Little in Section One has needed to change materially from when the first edition was published, but that does not undermine the authors’ excellent approach in maintaining a careful balance between an academic review and a practical guide. The book stands out for the admirable way in which the authors have addressed a subject of such depth and complexity so comprehensively, and in a style from which all practitioners, from trainees to experienced advisors, will draw something when seeking to remind themselves of general legal principles or focus on a particular situation (such as insolvency) where more specific detail is required.
Section Two looks at how fundamental trust concepts have been applied in practice to modern trusts, and contains a selection of situations in which trusts are used, ranging from private family trusts to pensions, and onwards to the many uses of trusts in a commercial context. It is this that distinguishes Thomas and Hudson from other notable works on trust law, as the trust has evolved in recent years to have many more applications than its use in succession planning.
That is not to say that the authors skim over family trusts. This section commences with private client trusts and there is a helpful reflection on the pre-2006 position before the authors delve into the technical detail of interest in possession trusts post-2006, the demise of the accumulation and maintenance trust and the new regime generally.
Detailed sections follow on offshore trusts, with useful jurisdictional comparisons. As a tax and trusts lawyer focusing largely on the offshore world, my attention was drawn automatically to Part F: Private Client Trusts and Part G: International Trusts, particularly as this is where we have seen many of the recent developments. Farrers’ Caroline Kirby, who contributed to Chapters 40 and 41 in Part G: International Trusts, is to be singled out for her excellent practical application of the law and exploration of jurisdictional differences for asset protection trusts.
What these chapters do not do is to question the future of trusts or look at the increasing popularity of alternatives such as foundations. That said, the trust in its many guises (or, as the authors put it, ‘this form of conscience’) has been in use for centuries, whereas the alternatives that currently feature in the agenda of every conference are merely babes cutting their teeth in comparison.
The commercial focus in the latter chapters of the book is hugely valuable to practitioners in the growing area where the law of trusts and the worlds of commerce and finance overlap. Many lawyers and trustees have observed the rise of trusts as an integral part of, for example, securitisation; and others found themselves, in the dark days of 2008, being called upon to use trusts as protection against counterparty risk, when parties were fearful of their bank or another party becoming insolvent. For those reasons, these chapters are, as noted in this review and in the review of the first edition (Trust Quarterly Review volume 3, issue 2), an outstanding feature of the book. The authors explain the principles behind, and the trust law analysis of, a number of commonly-used commercial transactions and structures which employ trusts as a key feature, such as trusts of financial instruments, unit trusts, or those used to take and hold security in commercial transactions.
Overall, this is a thoughtful and impressive second edition, with a wealth of invaluable information for those using trusts in their myriad forms and applications.
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