If you hold an apple in your hand and drop it to the floor, it will follow the law of gravity without being subject to any statutory law. If you always speak kind words to people, the good vibrations you are sending out will inevitably return to you because it is the law of karma. This too has nothing to do with statutory law or any manmade law.
In the same way, there are universal principles that operate in the trust world that have nothing to do with any bodies of statutes or governmental jurisdictions. These are what developed into what is known as “common law” – – meaning don’t cheat, don’t steal, don’t lie, don’t harm others. These are basic ABCs that are universally accepted everywhere, regardless of the legal system or jurisdiction.
The NLT has derived its basic modus operandi from a consensus distillation of all the most essential requirements for anyone anywhere to view the trust as legitimate, regardless of legal system or jurisdiction. In that sense, it can be called a “common law” trust, because it is based on the conclusions of centuries of human experience that have culminated in a set of unavoidable timeless principles.
We simply prefer the term “natural law” because there are so many inferior so-called common law trusts out there that we wanted to distinguish ours from the weak ones and the ones that are incorrectly designed. We respect natural law as being totally perfect, absolutely universal, and eternally immutable. What people call common law is man’s best attempt at emulating universal natural law.
This awareness of law recognizes that everyone can do anything he or she pleases, as long as such actions do not violate the rights of any other sentient being. It also recognizes that one should always keep one’s word – – one’s contracts; one’s agreements.
The question you have raised of a grantor also being a trustee is not a question of one’s freedom from statutes. It is a question of how to make a logical arrangement in contract between two or more human beings that makes sense and that would hold up in a court in case it were ever challenged. It makes no sense to anyone that one would entrust an asset only to oneself. That is exactly the same as simply keeping the asset and not having a trust at all, as stated inter alia.
There is an international brotherhood-sisterhood of common law trusts. It is not a body of government-enforced statutory law. Rather, it is a loose and decentralized global community of like-minded people who would rather trust each other than big brother and its brute force mechanisms.
This global community has distilled the essence of commonly agreed-upon principles over centuries of life experience. One of these principles is that in order for a trust to be respected and recognized as legitimate, its trustees must be separate and different from the grantor, and must be unrelated to the grantor.
If you are concerned about having legal and practical control of the trust, then perhaps you should consider being the trustee. In that case, then simply find someone else to sign on as the grantor. That could be a friend or really anyone. That is what is called a “nominee grantor”, because in an irrevocable trust, the grantor signs on at the beginning and also signs off at the beginning – – right after signing on.
He or she signs off as relinquishing all further control and all further involvement with the trust, except as perhaps the issuer of letters of wishes. But if you are the one setting up the trust and you wish to be trustee, then the nominee grantor you appoint would rightfully not be expected to issue letters of wishes. That person would simply sign off and disappear and have nothing further to do with the trust.
The assets can be contributed by anyone. The assets put into the trust don’t need to come just from the grantor. They can also come from the trustees. So the grantor need not be seen as the only contributor. If it is a nominee grantor, you could:
- give the nominee grantor $21;
- have yourself written into the trust as one of the trustees;
- have the grantor give the $21 back to you now in your new role as trustee, but that exchange would not be to you personally – – it would be to the trust, and you are simply the fiduciary accepting it on behalf of the trust;
- record the minutes accordingly;
- and now the grantor signs the page resigning from his position and relinquishing all further involvement.
That makes the trust properly set up according to what we call trust law – – the international tradition of commonly accepted requirements to make any trust integral and legitimate. Then as trustee, there is nothing to stop you from adding an endless stream of additional assets into the trust.
Another way you can go is to be grantor, beneficiary, and manager . . . and as manager, you can also have practical control of the trust and its assets. It’s just that then you would have to appoint at least two other unrelated people as primary trustee and second current trustee OR successor trustee. All of this is reviewed in the Natural Law Trust eBook in the section entitled “18 – Roles of the creator, trustee, and beneficiary”. Have you read that?
