Description

This paper revisits the question: is settlor control a problem in trust law? The analysis focuses on circumstances in which settlor control enables access to trust assets for personal benefit, yet that control is not formally recognised as wealth for the purposes of wealth-contingent laws, such as those relating to bankruptcy, family law, or creditor claims. The paper examines how settlor control can undermine both the moral and legal foundations of the trust relationship and outlines a framework for distinguishing problematic forms of settlor control from benign arrangements, taking into account the settlor’s degree of control, the potential for personal benefit, and the appropriate level of legal intervention. The capacity of trust law to address these concerns through doctrines such as sham or illusory trusts and resulting trusts is critically assessed. Ultimately, the paper contends that settlor control poses challenges not only for other areas of law but also for the integrity of trust law itself, thereby requiring nuanced and context-sensitive legal responses.