Trust Origin

It is well-known in historical fact that modern Trusts originated during the 12th century, but nobody links their formation to any particular person.  However, King Henry II reigned from 25th October 1154 to 6th July 1189 and was known for his keen interest in creating and approving many laws during his years on the throne.  He is attributed to writing most of our “common law” and he introduced several major reforms.  Before 1166 “trial by ordeal” was a common way of determining guilt or innocence in criminal cases.  This system might ask the accused to pick up a red hot bar of iron, or pluck a stone out of a boiling cauldron.  If the hand used, had started to heal after a few days, they were considered to have God on their side, which confirmed their innocence!  Henry replaced this rather painful system with a jury of 12 men.  On inheriting the crown, the young Henry Plantagenet eagerly and with much energy set about restoring law and order in his new kingdom.  All illegal castles erected in King Stephen’s harsh reign were demolished.  Henry was a tireless administrator and clarified and overhauled the entire English judicial system.  In fact many laws written by his hand still exist today and he was probably one of our best monarchs (apologies to Liz and Vicky!).  Many of these important matters were totally forgotten and completely overshadowed during his reign, by the murder of Thomas a Becket.

It is known that during his reign, any land or property possessed by knights, lords and commoners was taken by the Church, if those people were killed in the crusades.  Their land became God’s land, because they had been fighting for Christianity.  To prevent land and property being confiscated by the Church, Henry allowed people to appoint trusted friends, who were remaining in England, to look after their possessions, while they were away fighting.  These trusted people (or Trustees) had to return the land to the owner when he came home from Jerusalem or return it to their children should they be killed.  Because estates were now controlled by the owners’ children, the estates remained “Crown” land held by the king and did not get taken by the Church.

Over time, Trusts became known as legal systems that “ring-fenced” an asset for the benefit of future beneficiaries, as shown in Figure 1 below.

Figure 1.

Figure 1.

Even today, every Trust in existence is operated with the “Trust Triangle” shown above.

Charities are “charitable Trusts”, where money is received from donations at the top of the triangle, is looked after by the Trustees (bottom left of the triangle), and is held by the Trust for the benefit of the person, people, building, animal who is in need of money as a beneficiary (right of the triangle).

Personally interested in government and law, Henry made use of juries and re-introduced the sending of justices (judges) on regular tours of the country to try cases for the Crown.  His legal reforms have led him to be seen as the founder of English Common Law.