The common-law trust as we know it arose in the late Middle Ages as a blatant tax-avoidance scheme,5 but it proved to be so flexible and valuable that it has persisted to this day. Frederick W. Maitland, perhaps the greatest of the legal historians, went so far as to claim that:
Of all the exploits of equity the largest and the most important is the invention and development of the trust. …This perhaps forms the most distinctive achievement of English lawyers.6
Maybe so, but roughly three centuries before English lawyers had ever heard of the trust, Islamic law had developed the waqf, a device that is uncannily similar to the trust. Indeed, in the ninth century an Islamic legal scholar (and lawyer), Abu Bakr Ahmad b. Amr b. Muhayr al-Shaybani al-Khassaf (known, not surprisingly, as al-Khassaf) wrote an entire treatise on the waqf, recently translated,7 in which he cited more than two centuries of Islamic trust law and addressed such contemporary-sounding issues as, “Will a trust over which the grantor retains powers be treated as part of his estate when he dies?”
For several hundred years after the trust was either invented or reinvented in England, the business of managing trusts was pretty straightforward and largely a family matter. Trust assets were mainly land (or, later, gilt securities), and the income therefrom was passed along to the beneficiaries. Trustees were ...