This chapter was jointly written with Patricia M. Angus, whose help over many years has been invaluable.
THIS REFLECTION EXPLORES how a trust (referred to in the singular, although a family may, and probably will, use more than one trust) fits into the system of family governance. In my experience, although many families have relied upon trusts for the purpose of managing and disposing of their wealth, the most successful ones understand that the term or life span of a trust represents a period of regency within the representative governance system created by the family.
Traditionally, the term regency has been used to describe a period during which a king, or other leader, is unable to rule due to minority, prolonged absence, or a disability, such as mental incompetence. A trust is essentially a period of regency, as it represents a time during which the full ownership of property is suspended. During this interval of suspension of ownership, the trustee takes possession of property from the prior owner and holds the property for the benefit of the beneficiaries, who, at some point or at several points over a period of time as set forth in the trust agreement, will become the next owners of the property.
One need not dig too deeply into the history books to find numerous examples of periods of regency, especially in the history of government. Although the most notable examples are found in the history of monarchies, the experiences are nonetheless ...