Trusts- A brief history

Trust law developed in England at the time of the Crusades, during the 12th and 13th centuries. At the time, land ownership in England was based on the feudal system. When a landowner left England to fight in the Crusades, he needed someone to run his estate in his absence, often to pay and receive feudal dues. To achieve this, he would transfer ownership of his lands to a friend, on the understanding that the ownership would be conveyed back on his return, or if he didn’t return, the land would be passed to the deceased Crusader.

However, a Crusader would often return to find his erstwhile friend (and now legal owner of his property) refusing to hand it over. As far as the courts were concerned, the land belonged to the latter, who was under no obligation to return it. The disgruntled Crusader could petition the king, who would refer the matter to his Lord Chancellor. The Lord Chancellor could do what he considered “just” and “equitable”, having the power to decide a case according to his conscience, rather than strictly based on law. The Lord Chancellor would usually consider it unjust that the legal owner could deny the claims of the Crusader.
The Lord Chancellor’s court would continually recognise the claim of a returning Crusader. The legal owner would thus be seen to be holding the land for the benefit of the original owner, and would be compelled to convey it back to him when requested. In effect, the Crusader was the “beneficiary” and the friend the “trustee”. The term “use of land” was coined, and in time this concept developed into what we now know as a trust.