Wills, Trusts & Estates Prof Blog

Article: A Proposal to Modernize Small Estate Law in New York

Albert Feuer (Law Offices of Albert Feuer) recently published, A Proposal to Modernize Small Estate Law in New York, 2025. Provided below is an Abstract:

The NYSBA Trusts and Estates Law Section approved the proposed Who May Become a Voluntary Administrator Act in January of 2025. The proposal would modernize the procedures for a decedent’s small estate by providing that the implicit and explicit fiduciary preferences of those who die with property of a small value be treated the same way as the preferences of those who die with more valuable property, while giving their beneficiaries access to a quick and low-cost summary proceeding to settle those small estates.

Here is a link to the proposal.

Liechtenstein hit by Russia-linked ‘zombie trust’ crisis

Liechtenstein is facing a crisis involving hundreds of “zombie trusts,” financial entities that are legally still active but have no one managing them. These trusts, many linked to wealthy Russians, have been left in limbo after directors and managers resigned en masse due to pressure from U.S. sanctions related to Russia’s invasion of Ukraine.

Although Liechtenstein adopted European Union sanctions, recent U.S. actions went further, warning financial institutions they could face penalties for working with certain Russian clients, even if those clients aren’t officially sanctioned. As a result, Liechtenstein's financial regulators told firms to cut ties with any risky clients, which led to a wave of resignations that left up to 800 trusts with no one in charge. These trusts contain a wide range of assets, from millions in cash to yachts and luxury properties, and are now frozen.

The situation is threatening Liechtenstein’s reputation as a stable financial center. The government has set up an emergency task force to try to solve the issue by appointing new directors or liquidators, but the legal complexities and fear of U.S. or Russian retaliation have made progress difficult. Officials acknowledge that many more trusts could be affected if a solution isn’t found soon.

For more information see Mercedes Ruehl "Liechtenstein hit by Russia-linked ‘zombie trust’ crisis," Financial Times, July 6, 2025.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

Article: Rights of Objects of Powers

Alec J. Morris (University of Buckingham) recently published, Rights of Objects of Powers, 2025. Provided below is an Abstract:

Offering considerable flexibility regarding the distribution of trust assets, powers of appointment are music to the ears of many a trust-creator. Despite their popularity however, we have in recent times become sloppy in our discussions and analyses of these powers. Unfortunately, this imprecision has resulted in us having a distorted understanding not only of mere powers but of 'discretionary trusts' also. This chapter provides an in-depth analysis of powers of appointment with the aim of bringing much-needed precision to this area of law. After first detailing precisely what a 'discretionary trust' is, this chapter moves on to consider objects' right to due administration of the trust and what grounds such a right. It is argued that, despite alternative views and arguments to the contrary, the 'true intended beneficiaries' approach is not only justifiable but is in fact the best means for understanding objects' right to due administration of the trust.

Article: Intention in Quistclose Trusts

Hui JING (Faculty of Law, The University of Hong Kong) recently published, Intention in Quistclose Trusts, 2024. Provided below is an Abstract:

This article examines the Hong Kong Court of Final Appeal's decision in China Life Trustees Ltd v China Energy Reserve and Chemicals Group Overseas Co Ltd (China Life), which addresses the critical elements of intention and context in the establishment of Quistclose trusts. The court held that for a Quistclose trust to be established, the payor must intend—with the recipient's agreement or acquiescence—that the funds be used solely for a specific purpose, without the need for the payor to expressly retain a beneficial interest in the transferred funds. Drawing on the China Life decision, the article further examines the inherent challenges of transparency and fairness arising from the concealed nature of Quistclose trusts, which may disproportionately disadvantage the borrower's other creditors in the event of the borrower's insolvency. Given the evolution of corporate rescue mechanisms and the increasing sophistication of modern financial transactions, the article argues that a reassessment of the continued recognition of Quistclose trusts is warranted. It proposes potential reforms, such as the mandatory registration of Quistclose arrangements, to strike a fair balance between the interests of Quistclose lenders and those of the borrower's other creditors.

Article: Trusting Remedies for the Child Influencer Space: Blocked Trust Accounts and Child Beneficiaries

Naomi Cahn (University of Virginia School of Law) recently published, Trusting Remedies for the Child Influencer Space: Blocked Trust Accounts and Child Beneficiaries, 2025. Provided below is an Abstract: 

Child influencers-or digital entertainers-can generate millions of dollars each year. These children are unprotected by federal labor laws, and they receive little oversight from any other source. A number of scholars have proposed remedies to both the privacy and financial exploitation problems, and states are beginning to enact legislation in this area. In the financial context, these remedies typically take the form of recommending "blocked trusts," or a similar mechanism, essentially trusting parents to serve as the primary financial custodians for their children. The model for these laws is the decades-old economic protections for child actors, so-called Coogan accounts. Coogan statutes generally require that "blocked trusts" be set up for child actors to protect their earnings. In this context, the term "blocked trusts" refers to trusts that cannot be accessed until a child reaches the age of majority or is emancipated.

Coogan accounts have been explored in the child labor context, and, building on that scholarship, this symposium Essay instead analyzes Coogan accounts from the perspectives of trust law and children's rights as beneficiaries pursuant to trust law and wealth inequality. Accordingly, the Essay examines the fiduciary obligations of the settlors and trustees and the rights of the beneficiary-children, briefly comparing and contrasting the trusts to the more conventional Uniform Transfers to Minors Act accounts. The Essay then provides suggestions for future direction to protect children who are actors as well as those who appear in the child influencing context. While this Essay is limited to an exploratory survey of the financial issues involved in child influencing, the solutions to prevent child exploitation must involve the broader context that frames the existence and practice of sharenting—and, even more comprehensively, the challenges to recognizing children’s interests and rights.

Article: Does a Successor Trustee owe a Fiduciary Obligation to the Former Trustee not to Frustrate their Indemnity?

Aryan Mohseni (University of Sydney Law School) recently published, Does a Successor Trustee owe a Fiduciary Obligation to the Former Trustee not to Frustrate their Indemnity?, 2025. Provided below is an Abstract:

The nature of a trustee's indemnity has been the subject of recent appellate judicial treatment in the United Kingdom and in Australia. Owing to the prevalence of the trading trust in Australia, the High Court of Australia has recently had occasion to consider whether a successor trustee owes a fiduciary duty to not frustrate a former trustee's indemnity over trust assets. That decision has addressed divergences between Australia and the United Kingdom on the nature of the indemnity and reminds us of fundamental starting points about the law of trusts that are often forgotten.

Article: The Past and Future of Japanese Trust Law

Hiroyuki Watanabe (University College London - Faculty of Laws; Waseda University) recently published, The Past and Future of Japanese Trust Law, 2025. Provided below is an Abstract:

2022 marked the 100th anniversary of the enactment of Japan's Trust Act and Trust Business Act. Probably it was the first country in civil law jurisdictions to introduce trust law. However, this fact is not widely known2. Japan's trust law has developed uniquely, with trust banks playing a central role, and the background to Japan's early introduction of trust law and stable development can be attributed to its unique regulatory structure (See, Part Ⅰ, Chapters 1and 2). And in terms of commercial trusts, Japan is said to have the second most advanced development after the United States. While various trust schemes are being utilised, some unique Japanese trust schemes have also developed (See, Id, Chapters 3-5). Constructive trusts (Chapter 7) and charitable trusts (Chapter 8) have also developed in ways that are unique to Japan. In addition, the recent rapid development of family trusts and the various issues that have arisen as a result are also phenomena that should be noted (Chapter 6).

Because of the provision of the Japanese Trust Act for the independence of the trust property, combined with the practical attitude of the Japanese legal practitioners, there has been, as a general tendency, not much debate on the basic theory of trusts. However, if you read the Shinomiya's unique theory of trust law (see Part Ⅱ) in the light of the cutting-edge discussions that have taken place in the Western world in recent years, you may be surprised at its advanced nature and excellence.

Until now, the reality of Japanese trust law and practice has unfortunately only been partially understood outside Japan. This is due to a lack of effort on the part of Japanese scholars and practitioners, including myself. I hope that this paper will help the reader to understand the full picture of trusts in Japan and to discuss it from an international perspective.

 

Protecting Underage Influencers

Prof. Naomi Cahn (University of Virginia School of Law) recently posted on SSRN her article entitled Trusting Remedies for the Child Influencer Space: Blocked Trust Accounts and Child Beneficiaries.  Here is the abstract of her article:

Child influencers-or digital entertainers-can generate millions of dollars each year. These children are unprotected by federal labor laws, and they receive little oversight from any other source. A number of scholars have proposed remedies to both the privacy and financial exploitation problems, and states are beginning to enact legislation in this area. In the financial context, these remedies typically take the form of recommending "blocked trusts," or a similar mechanism, essentially trusting parents to serve as the primary financial custodians for their children. The model for these laws is the decades-old economic protections for child actors, so-called Coogan accounts. Coogan statutes generally require that "blocked trusts" be set up for child actors to protect their earnings. In this context, the term "blocked trusts" refers to trusts that cannot be accessed until a child reaches the age of majority or is emancipated.

Coogan accounts have been explored in the child labor context, and, building on that scholarship, this symposium Essay instead analyzes Coogan accounts from the perspectives of trust law and children's rights as beneficiaries pursuant to trust law and wealth inequality. Accordingly, the Essay examines the fiduciary obligations of the settlors and trustees and the rights of the beneficiary-children, briefly comparing and contrasting the trusts to the more conventional Uniform Transfers to Minors Act accounts. The Essay then provides suggestions for future direction to protect children who are actors as well as those who appear in the child influencing context. While this Essay is limited to an exploratory survey of the financial issues involved in child influencing, the solutions to prevent child exploitation must involve the broader context that frames the existence and practice of sharenting—and, even more comprehensively, the challenges to recognizing children’s interests and rights.

Article: Investor Fiduciary Duties in the Crosshairs – Targeting a Mirage

Susan N. Gary (University of Oregon), Keith L. Johnson (Global Investor Collaboration Services, LLC; Reinhart Institutional Investor Services) and Nicholas W. Zuiker (Reinhart Boerner Van Deuren s.c.) recently published, Investor Fiduciary Duties in the Crosshairs – Targeting a Mirage, 2025. Provided below is an Abstract:

The fiduciary duties of institutional investors have become a hot issue amongst policymakers and courts, with the future financial security of millions of American workers and savers at stake. Unfortunately, many recent policy debates and court opinions on investor fiduciary duties demonstrate only a limited understanding of fiduciary duty principles. A more complete appreciation of the full range of investor fiduciary duties is essential to inform policy and court decisions that affect the future financial security and economic stability of America. This article offers a guide to essential investment fiduciary concepts that have been missing from recent policy debates and court decisions.

Article: Settlor Control in Family Trusts

Hui JING (The University of Hong Kong) recently published, Settlor Control in Family Trusts, 2024. Provided below is an Abstract:

This article analyses the Singapore High Court's ruling in La Dolce Vita Fine Dining v Zhang Lan [2022] SGHC 278, exploring the legal challenges posed by settlor-controlled family trusts in offshore wealth management. The analysis highlights how excessive settlor control can undermine the validity of a trust, rendering its assets vulnerable to claims from the settlor's creditors. The article then explores the broader implications of the Zhang Lan case for asset protection and creditor rights in the context of cross-border wealth planning. Three key aspects are examined. The first aspect explores the boundaries between sham trusts and breaches of trustee duties, emphasising the importance of a settlor's genuine intention in creating a trust. The second aspect examines the tension between the need for trust confidentiality and the requirement of transparency for transaction parties, drawing reference to the trust registration framework under English law. The third aspect addresses the tension between settlor control and trustee accountability, arguing that while settlor-reserved powers are permissible, their scope and exercise must not undermine the trustee's responsibility in ensuring the proper administration of the trust.