Guarding against a Trust's Destruction by Merger

Charles E. Rounds, Jr.
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A trust is not a trust if the “trustee” alone holds legal title to the subject property and alone possesses the entire beneficial/equitable interest. Instead, he owns the subject property outright and free of trust, all interests, both legal and equitable, being merged in him. An inadvertent merger can have adverse consequences; this has been true since time immemorial. In the case of the ancient use, the precursor to the modern trust, a merger of the legal and equitable interests in the subject property in a single person would enable the lord to effectively claim relevium, custodia haeredis, maritagium haeredis, and escaeta upon that person’s death. Today, the trustee of a “gun trust” seeks to avoid merger so as not to run afoul of Federal (U.S.) firearms regulations. Also since time immemorial, maintaining a multiplicity of trustees has been the tried and true method of insuring that a trust is not terminated by merger. Charles E. Rounds, Jr. and Charles E. Rounds, III explain in §8.15.1 of Loring and Rounds: A Trustee’s Handbook (the use) and in §8.7 of the Handbook (the trust). Each section is reproduced in its entirety below.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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