Trusts of Family Businesses: Historical and Modern Perspectives

Televantos, Andreas (2026) Trusts of Family Businesses: Historical and Modern Perspectives. In: Instruments for Preserving the Unity of Family Business and Agricultural Assets: Perspectives of Legal History. Legal Heritage . Central European Academic Publishing, Budapest, Miskolc, pp. 25-47. ISBN 978-615-7027-30-5

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Abstract

This paper examines how the device of the “trust” can be used in common law systems to preserve family business assets. At a broad level, it examines the common law’s rules which sought to prevent restrictions on the alienation of assets and shows how these rules could be subverted using the device of a trust. It then looks at a particular example of this subversion in the context of family businesses. It shows how, historically, it was common for testators in their wills to settle business assets on trust for children, ultimately making provision for children to take over the business. Such a device could allow a settlor control over how the family business was run after their death and even provide a degree of limited liability trading protection to their children: before limited liability was recognised more generally. Turning to contemporary practice, it considers the conceptual issues surrounding trusts of businesses today, in particular, the difficulties trading trusts can create for creditors and in the insolvency context.

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