Decline of Trust Law Education in the United States
Trust law has long been a fundamental component of legal education worldwide. In the United Kingdom, Wales, and Northern Ireland, it remains a mandatory subject in law schools. However, in the United States, the study of trusts as a core subject has significantly diminished over the past several decades.
In the early 1960s, Stanford and Harvard Law Schools made the decision to remove the “Law of Trusts” as a required subject for law students and practitioners. Following their lead more than 180 other American Bar Association (ABA)-accredited law schools eliminated trust law from their mandatory curriculum. As a result, the study of trusts—encompassing agency, fiduciary duties, and equity—has become nearly obsolete in American legal education with only a few elective courses remaining.
According to Loring and Rounds: A Trustee’s Handbook (2022), very few U.S. law schools still require courses in agency, trusts, and equity.
Meanwhile, the Restatement (Third) of Trusts, originally led by Professor Scott of Harvard, continues to detail personal (living) trusts in its four-volume series. However, there is no corresponding series that exists for commercial (business) trusts.
National Bar Exams:
Occasionally these exams have questions about business organizations. When they do the only test questions include partnerships, corporations, and LLCs. These all revolve around legislative statutes.
International Trust Law Education
In contrast to the U.S. trusts are a staple in the legal curricula of the UK, Australia, Singapore, India and Hong Kong.
Despite the fact that trillions of dollars in U.S. assets—mutual funds, SPACs, bond financing, and REITs—are held in commercial trusts they’re ignored by the American legal community. Their interests favor personal trusts for estate planning.
Unlike passive living trusts which distribute assets these commercial trusts are active which operate for-profit enterprises. Their purpose and operation is vastly different.
These trusts are integral to capital markets and public finance. Their structure involves Secretary of State registrations, state and federal securities disclosures. They’re commonly found in Delaware, Virginia, or Massachusetts. Delaware’s unique Court of Chancery, for instance, plays a critical role in resolving trust beneficiary rights.
However, there’s another use for business trusts. They can be tailored for private transactions or used to secure anonymous title to public assets. They offer a high degree of flexibility yet require specialized strategies and navigation of external factors.
Personal Trusts for Estate Planning
For much of the 20th century, lawyers concentrated on “Last Will & Testaments” to manage family wealth transfers, with probate court handling the inheritance of assets. Trusts were virtually non-existent.
A turning point arrived in 1965 when Norman Dacey published How to Avoid Probate, which introduced the concept of the living trust to Americans. This book sparked a revolution in estate planning, as families embraced the idea of controlling their own destinies outside the courtroom, free from the burdens of judicial fees and delays.
This shift forced the legal community to revisit trusts. Living trusts are a distinctly American phenomenon. Despite England’s historic role in developing trusts, U.K. citizens avoid living trusts because of the multiple tax events they trigger.
In U.S. law schools today, student may take an elective single semester course titled “Decedents’ Estates & Trusts.” However, the underlying foundation is the law of succession. Trusts are merely a passive device for distributing assets.
In contrast, many other countries address succession and trusts as separate disciplines—with trusts sometimes integrated with equity principles—and not all jurisdictions even cover the law of succession.
This educational emphasis has steered the focus of trusts in the U.S. toward family wealth transfers for two reasons – one they produce good fee income for lawyers and secondarily commercial applications are a separate niche.
Legal advertising often features “Trusts & Estates Attorney.” This might lead you to believe that the lawyer is also qualified to address commercial trusts. In reality, their education and services only focus on living trusts for estate planning—not as instruments of commerce.
In summary, while trust law encompasses both commercial and personal applications the U.S. legal focus has evolved to emphasize living trusts for family wealth succession. This niche forms the backbone of legal trust practice today.
Equity Principles Story
A man on marriage #2 made his attorney successor trustee with instructions. The man died. Heirs challenged the distributions. Trial court said the lawyer did everything right according to the terms of the trust. They applied statutory law without consideration of common law equity principles.
On appeal it was overturned. The court reasoned the man was under duress from wife #2 to amend his trust. Fortunately they applied common law principles. She lost. Heirs won. Just imagine how this could have turned out.
If a lawyer advisor causes economic harm to your living trust, it is the trustee who is liable. No matter if trustee acted in good faith on advice of counsel. The lawyer might have civil liability but rarely faces any professional disciplinary actions. Make certain your lawyer has malpractice insurance.
Competent estate planning living trust lawyers do exist. Just be careful. Or consider a ‘professional trustee’ service provider. If you have family conflicts or are a single individual, this is a viable solution. These are lawyers or bankers with niche expertise. Look them up on google.
It you just need help completing living trust paperwork or recording a real estate deed then you might use a legal document assistant. The California website is here. They don’t offer advice but can make certain your paperwork is technically correct.
Handicaps
In America most lawyers are familiar with personal (living) trusts for estate planning. But very few of them are aware of or knowledgeable about commercial (business) trusts.
“…whereas in the United States, most practitioners consider trusts as an institution in the field of gratuitous transfers.” – John H Langbein
A few lawyers attempt reverse engineering a living trust into a business trust, but it doesn’t work that way. They also erroneously assume IRS trust tax code rules apply.
If asked about a business trust, they will always steer you toward secretary of state registrations.
As states liberalized incorporation statutes and lawyers standardized charters, corporations and LLCs became easier and cheaper to form. Revenue incentives for states and professional familiarity pushed commercial trusts to the margins for general operating businesses.
2025 Reality
Educational Gaps:
U.S. law schools focus on statutory business entities like corporations, and LLCs. Business trusts based on common and equity law rather than formal state incorporation statutes receive no attention in the curriculum.
Specialized Expertise:
Commercial trusts require a deep understanding of common law principles, equity, and often nuanced jurisdictional issues. This specialized knowledge is missing in the US.
Limited Market Demand:
Business trusts used for very specific niche purposes—such as asset privacy or anonymity—the market is relatively small compared to standard organizations.
Regulatory Complexity:
Unlike statutory business organizations, trusts don’t have a clear-cut regulatory framework. This lack of formal guidance means lawyers must navigate common law rules and potentially conflicting state or federal practices.
Risk and Reputation Concerns:
When used for privacy and anonymity business trusts sometimes attract scrutiny. Lawyers may be cautious about involving themselves in structures associated with evading transparency even when used legitimately. Their license to practice law is always more important than the needs of any one client.
“But My Lawyer…”
As valuable as private trusts are for real estate, few lawyers know how to implement correctly. It’s easier for them to suggest a living trust or an LLC.
In the financial jungle of life – if an LLC is the hunter’s gun, a trust is animal stealth.
“Litigation: A machine which you go into as a pig and come out of as a sausage.” – Ambrose Bierce
Summary
The legal community was totally unprepared for the internet and what it meant for investors and entrepreneurs that want asset privacy or anonymity. For all the reasons listed above you are mostly on your own. And be careful who you listen to.
