The Constitutional and Common Law Foundations of Private Express Trusts
Are Private Express Trusts Legitimate?
Private express trusts are backed by over 200 years of American court decisions, exposed in U.S. Supreme Court rulings, and used by some of history’s most prominent figures to structure wealth. They aren’t legal theory. They’re legal fact.
Here’s what most people don’t realize: Alexander Hamilton used this exact structure when establishing the Merchants Bank of New York (early American banks often starting from merchant groups and evolving into chartered institutions). Wealthy families have held property in express trusts since the colonial era. The Supreme Court addressed these trusts directly in Eliot v. Freeman (1911), confirming they exist independent of legislative authority and aren’t subject to legislative control.
So why does this feel unfamiliar? Why do some people dismiss it as fringe thinking?
The answer has nothing to do with legitimacy. It has everything to do with education, and specifically what modern law schools stopped teaching nearly a century ago.
This article explains where private express trusts actually come from. Not theory. Not philosophy. The concrete legal foundations that make them valid, enforceable, and recognized by American courts. By the end, you’ll understand why these trusts work, and why most attorneys have never heard of them.
Let’s start with the foundation itself.
Common Law and Statutory Law: Understanding the Foundation of Private Express Trusts
Most people assume “the law” is one thing. A single system of rules created by legislatures and enforced by courts. That understanding is incomplete.
American law actually rests on two distinct foundations that work together. Understanding the difference explains why private express trusts exist, why they’re valid, and why they operate differently than corporations or LLCs.
Statutory Law: What Legislatures Create
Statutory law is what most people picture when they think about law. Congress passes a bill. The president signs it. It becomes a statute. State legislatures do the same thing at the state level.
Corporations exist because of statutory law. So do LLCs, limited partnerships, and most business structures attorneys recommend. These entities are “creatures of statute,” meaning they exist only because a legislature created the legal framework for them. No statute, no entity.
This matters because statutory creations are subject to statutory control. Legislatures can change the rules. They can add requirements, impose regulations, or modify how these entities operate. When you form an LLC, you’re operating within a framework the government created and controls.
Common Law: What Courts Recognize
Common law works differently. It doesn’t come from legislatures. It comes from courts recognizing principles that exist independent of any statute.
Here’s the key distinction: common law is based on natural rights that predate government. The right to own property. The right to enter contracts. The right to protect what’s yours. These rights weren’t created by any legislature. Courts simply recognize and enforce these rights as inherit to all; often referred to as “God-given” rights.
When judges decide common law cases, they’re not creating new law. They’re discovering how existing principles apply to specific situations. Case precedent builds over centuries as courts apply these principles again and again. The result is a body of law that exists alongside statutory law, not underneath it.
The U.S. Supreme Court has confirmed this directly. Common law is just as much “the law” as any statute. Both systems are valid. Both are enforceable. They simply serve different purposes and operate on different foundations.
The Express Trust is created under common law; it is NOT a creature of the common law. This is an important distinction from equity, which is a topic we’ll discuss in a bit.
Common Law is Discovery of Existing Principles – Not Creation of New Law
When a legislature creates a statute, they’re making a choice. They could have written the law differently. They can change it tomorrow. The law exists because they decided it should exist.
Common law doesn’t work that way. Judges don’t create common law principles. They identify principles that already exist based on natural rights and apply them to disputes. Case precedent isn’t a record of judicial invention. It’s a record of how natural principles work in practice.
Think of it like mathematics. Mathematicians don’t create the fact that 2 + 2 = 4. They discover and document mathematical principles that exist independent of human decision. Common law judges approach their work similarly. The principles exist. The judge’s job is to identify and apply them correctly.
This is why common law cases from the 1800s still matter today. The underlying principles haven’t changed because they were never arbitrary human creations in the first place. Courts recognized them then. Courts recognize them now.
Where Private Express Trusts Fit in the Legal Landscape
Private express trusts are creatures of common law, not creatures of statute.
They don’t exist because some legislature passed a “Private Express Trust Act.” They exist because individuals have a natural right to enter contracts and structure their property as they choose. Courts have recognized and enforced this right for centuries, long before modern trust statutes existed.
This is the critical point. When something is a statutory creation, the legislature controls it. When something is a common law creation based on natural rights, the legislature can’t simply legislate it away. The Constitution protects these foundational rights from legislative interference.
The Supreme Court made this explicit in Eliot v. Freeman (1911): express trusts are “not creatures of the statute” and are “not subject to its legislative control.” They exist under a different authority entirely.
This doesn’t make express trusts “outside the law.” It makes them foundational TO the law. Common law is the bedrock American law was built on. Express trusts operate at that foundational level, not as some alternative system, but as part of the original system itself.
The Right to Contract: The Constitutional Foundation
Every private express trust rests on a single foundational right: the right to contract.
This isn’t a privilege granted by government. It’s a natural and inalienable right that existed before any constitution was written. The Founders considered it so fundamental that they built explicit protection into the Constitution itself.
Article I, Section 10 states it plainly: “No State shall pass any Law impairing the Obligation of Contracts.“
Read that again. The Constitution doesn’t say States should avoid impairing contracts when convenient. It says they shall not. This is one of the most absolute protections in the entire document.
Why did the Founders care so much about contract rights? Because they understood something essential. Free people must be able to make binding agreements with each other. Without that ability, property becomes meaningless. Commerce becomes impossible. Liberty itself becomes hollow.
A private express trust is, at its core, a contract. The Settlor agrees to place property under specific terms. The trustee agrees to manage that property according to those terms. The beneficiary receives benefits as defined in the agreement. Three parties. Clear terms. A binding contract.
When you create a private express trust, you’re exercising the same constitutional right that protects every contract you’ve ever signed. Your employment agreement. Your mortgage. Your business partnerships. The Constitution shields all of these from legislative interference, and it shields your trust agreement the same way.
This is why the Supreme Court in Smith v. Morse held that laws attempting to deny contract rights violate the Constitution. The right to contract isn’t something government gave you. It’s something government is constitutionally prohibited from taking away.
Here’s what this means practically. When you structure a private express trust properly, you’re not operating in some legal gray area. You’re standing on constitutional bedrock. The same bedrock that protects every contract in America.
Equity’s Application to Trusts
Understanding contract rights explains why you can create a private express trust. Understanding equity explains why courts enforce it.
Equity is a branch of law focused on fairness and conscience. It developed alongside common law to handle situations where rigid rules might create unjust outcomes. Where common law asks “what does the rule say?” equity asks “what does fairness require?”
The core principle is simple: equity compels performance. When someone makes a promise, equity holds them to it. Not because a statute demands it, but because conscience demands it.
The Supreme Court articulated this in Clews v. Jamieson (1901). Equity acts on a person’s conscience, compelling them to do what “right and good conscience” require. This isn’t abstract philosophy. It’s enforceable law.
How does this apply to trusts? When a trustee accepts their role, they make a promise. They agree to manage trust property according to specific terms for the benefit of specific people. Equity holds them to that promise.
If a trustee tries to ignore the trust terms, beneficiaries can seek relief in equity. The court won’t just award monetary damages. It will compel the trustee to actually perform their duties. To do what they promised to do. Equity doesn’t let people walk away from their obligations just because they changed their mind.
This creates powerful protection. Trust terms aren’t just suggestions. They’re binding obligations enforced by courts through equitable principles that have existed for centuries. A trustee who violates their duties faces not just liability, but court orders compelling specific performance.
The combination matters. Common law contract principles give you the right to create the trust. Equitable principles ensure the trust terms are actually honored. Together, they form a complete framework for creating and enforcing private express trusts.
What The Courts Actually Say About Private Trusts
Theory is one thing. What matters is whether courts actually recognize and enforce these structures. They do, and they have for over two centuries. Let’s look at what courts have specifically held.
Eliot v. Freeman (1911), U.S. Supreme Court
This case directly addressed whether express trusts depend on legislative authority. The Court’s answer was unambiguous. Express trusts are “not creatures of the statute” and are “not subject to its legislative control.”
In plain English: legislatures didn’t create express trusts, and legislatures can’t control them. They exist under common law authority independent of any statutory framework.
This single holding demolishes the “private trusts aren’t real” objection. The Supreme Court explicitly confirmed they’re real, they’re independent of statutes, and they’re beyond legislative control.
Berry v. McCourt (1965)
This case examined the nature of express trust relationships. The court described an express trust as a “contractual relationship based on trust form.”
Why does this language matter? Because it confirms what we discussed earlier. An express trust isn’t some exotic legal invention. It’s a contract. A specific type of contract with specific characteristics, but fundamentally an exercise of the same contract rights protected by Article I, Section 10.
Clews v. Jamieson (1901), U.S. Supreme Court
This case established how equity enforces trust obligations. The Court held that equity “compels performance” by acting on the conscience of parties to do what “right and good conscience” require.
This means trust terms aren’t optional. Courts will compel trustees to honor their obligations, not just penalize them for failing to do so.
Brightham v. U.S. (1941)
This case addressed whether a properly declared trust has legal standing. The court confirmed that once properly established, an express trust becomes a “bona fide legal entity” with “separate and distinct juridical personality.”
Translation: a private express trust isn’t just an arrangement on paper. It’s a recognized legal entity that can hold property, enter contracts, and conduct business through its trustees. It has standing in courts. It exists as a legal person distinct from the individuals involved.
The Courts’ View is Clear
These aren’t cherry-picked outliers. They represent consistent judicial recognition spanning over a century. Courts have repeatedly confirmed that express trusts:
- Are creatures of common law, not statute
- Exist independent of legislative authority
- Are protected as contractual relationships
- Are enforceable through equity
- Constitute separate legal entities when properly formed
The case law isn’t ambiguous. Private express trusts are recognized, protected, and enforced by American courts at the highest levels.
So Why Are Private Express Trusts So Uncommon?
The most basic reason private express trusts are so uncommon today is that law schools, and the legal industry as a whole, moved away from common law as the legal landscape became increasingly about statutory law.
The Curriculum Shift
In the 1920s and 1930s, American law schools fundamentally changed what they taught. Common law courses that had been standard for generations were gradually dropped from most curricula. The focus shifted almost entirely to statutory and regulatory law.
This wasn’t a conspiracy. It was a practical response to a changing legal landscape. As government expanded, so did the body of statutes and regulations attorneys needed to understand. Something had to give, and common law education gave way.
The result? Multiple generations of attorneys trained almost exclusively in statutory frameworks. They know corporations, LLCs, partnerships, and statutory trusts inside and out. They know these structures because that’s what law school taught them.
What they don’t know is the common law foundation underneath all of it. Not because it’s invalid. Because it wasn’t on the exam.
Unfamiliar Doesn’t Mean Illegitimate
When an attorney says “I’ve never heard of that,” they’re being honest. They probably haven’t. But unfamiliarity is not the same as invalidity.
The U.S. Supreme Court has heard of private express trusts. They’ve ruled on them. They’ve confirmed their legitimacy. The fact that your local estate planning attorney didn’t study them in law school doesn’t override a century of Supreme Court precedent.
This creates an odd situation. The people you’d naturally turn to for guidance, attorneys, often can’t help you with these structures. Not because the structures don’t work, but because they fall outside the statutory frameworks attorneys were trained in.
It’s worth noting what this isn’t. This isn’t “sovereign citizen” theory. Sovereign citizen arguments typically reject government authority entirely and claim individuals can opt out of the legal system through specific language or filings. Courts consistently reject these arguments as frivolous.
Private express trusts are the opposite. They operate within the American legal system, at its foundation. Common law isn’t an alternative to American law. It IS American law. The same courts that reject sovereign citizen nonsense have upheld express trusts for over 200 years. The distinction matters.
The Practical Reality
Private express trusts require understanding that most professionals don’t have. This isn’t a criticism of attorneys. It’s simply recognizing that their training focused elsewhere.
What does this mean for you? Education becomes your protection. Understanding these foundations allows you to evaluate what you’re told, distinguish legitimate structures from questionable ones, and make informed decisions about whether this approach fits your situation.
The legitimacy question isn’t really a question at all. The courts have answered it repeatedly. The real question is whether you’ll take the time to understand something most people, including most professionals, never learned.
A Trust Structure Rooted in Foundational Law, Not Fringe Theory
Private express trusts rest on constitutional bedrock.
They’re creatures of common law, the foundation American law was built on. They exercise the right to contract, protected explicitly by Article I, Section 10 of the Constitution. They’re enforced through equity, which compels trustees to honor their obligations. And they’ve been recognized by U.S. Supreme Court decisions spanning more than a century.
This isn’t legal theory waiting to be tested. It’s established law that most people simply haven’t encountered.
The unfamiliarity makes sense once you understand the history. Law schools stopped teaching common law foundations decades ago. Attorneys learn statutory structures because that’s what their education covered. The knowledge gap is real, but it says nothing about whether these trusts actually work.
What the courts say matters more than what any individual attorney knows. And the courts have been clear. Express trusts exist independent of statutes. They’re protected as contracts. They constitute separate legal entities. They’re enforceable.
Understanding these foundations does two things. First, it gives you confidence that private express trusts are legitimate tools with centuries of legal support. Second, it helps you recognize that proper structure and implementation matter. Constitutional protection only applies when the trust is created and operated correctly.
The wealthy families who’ve used these structures for generations understood something important. You don’t need permission from a legislature to exercise your natural rights. You just need to understand how to exercise them properly.