The Trust as Trojan Horse: A Comparative Perspective on Trusts' Role in Japanese Succession Law

• Author: James C. Fisher
• Position: Project Associate Professor, University of Tokyo Faculty of Law & Graduate Schools for Law and Politics
• Pages: 1945-1969

1945

The Trust as Trojan Horse:

A Comparative Perspective on Trusts’

Role in Japanese Succession Law

James C. Fisher*

ABSTRACT: In Japan, as in other developed eco nomies, demographic and

social change is putting pressure on the esta blished rules of inter-generational

wealth transfer. This Article considers h ow the trust equips Japanese

succession law to adapt to a chang ing society. The trust was adopted into

Japanese law in the early 20th Century on the assump tion that it would

remain practically detached from th e rest of Japanese civil law. However, it is

now making good on its latent potentia l to disrupt foundational axioms of

Japanese private law. In this sense, the trust is a Trojan H orse—although

thought innocuous on its arrival, th is fragment of the common law has begun

to reconstruct Japanese private l aw from within. The significant—though

unplanned—changes caused by the trust are re-orientating Japanese

succession law, reproducing featur es characteristic of common law

jurisdictions and challenging aspects of J apan’s civil-law jurisprudence, such

as absolute rights of succession. This Article a rgues that these developments

represent a valuable and adaptive response to Japan’s changing social and

economic environment. The testamentary freedom so characteristic of the

common law offers greater efficiency than th e civil law’s preference for absolute

rights of succession. In bringing Japanese s uccession law closer to the

common-law position, the trust is not just cha nging Japanese law, but

improving it.

I. INTRODUCTION ......................................................................... 1946

II. RIGHTS OF SUCCESSION AND TESTAMENTARY FREEDOM ............ 1947

III. THE ADVANTAGE OF FREE TESTATION ....................................... 1950

A. NO NATURAL RIGHT OF FREE TESTATION .............................. 1950

B. THE SUPERIOR KNOWLEDGE OF THE TESTATRIX .................... 1952

C. NO MORAL RIGHT TO INHERIT ............................................. 1954

* Project Associate Professor, University of Tokyo Faculty of Law & Graduate Schools for

Law and Politics.

1946 IOWA LAW REVIEW [Vol. 103:1945

D. TESTAMENTARY FREEDOM & SOCIAL NEEDS ......................... 1955

E. THE RESILIENCE OF TESTAMENTARY FREEDOM IN

ENGLAND & WALES ............................................................ 1957

IV. THE ORGANIC RISE OF THE JAPANESE TRUST ............................ 1959

A. THE TRUST AS A FINANCIAL INSTRUMENT ............................. 1959

B. JUDICIAL EXPOSITION & ITS CODIFICATION ........................... 1961

V. RATIONALIZING JAPANESE TRUSTS ............................................ 1964

VI. CONCLUSION: REFLECTIONS ON COMPARATIVE

(TRUSTS) LAW .......................................................................... 1969

I. INTRODUCTION

Like other developed economies, Japan is e xperiencing major social and

demographic change. Its aging population and declining birth-rate mean an

ever-increasing demand for pensions and medical care, but also a decreasing

number of economically productive individuals who can provide the tax

revenue on which social welfare depends. 1 This is also a time of social and

cultural transition in Japan.2 The nuclear, patriarchal family unit—itself the

post-war successor to the traditional multi-generational home—is yielding to

more varied family structures. The number of childless couples is rising, and

increasing numbers of Japanese people are marrying later in life, or

cohabiting unmarried, or indeed remaining single forever.3 Divorces, re-

marriages, and single-parent households are increasingly common.4

Liberalizing views on sexuality have increased the number and visibility of

same-sex relationships, although neither same-sex marriage nor a substantive

equivalent exists in Japan.5 All these developments invite careful scrutiny of

1. See generally, Ichiro Muto et al., Ma croeconomic Impact of Population Aging in Japan:

A Perspective from an Overlapping Generations Model, 64 IMF ECON. REV. 408 (2016) (discussing the

economic effects of Japan’s aging population); Nanako Tamiya et al., Population Ageing and

Wellbeing: Lessons from Japan’s Long-Term Care Insurance Policy, 378 LANCET 1183 (2011) (discussing

the relationship between aging populations and the provision of publicly funded medical care).

2. See generally Minja Kim Cho e et al., Nontraditional Family-Related Attitudes in Japan: Macro

and Micro Determinants, 40 POPULATION & DEV. REV. 241 (2014) (discussing changing social

attitudes, particularly with respect to family issues).

3. Robert D. Retherford et al., Late Marriage and Less Marriage in Japan, 27 POPULATION

& DEV. REV. 65, 65 (2001).

4. See, e.g., AKIKO S. OISHI, NAT’L INST. OF POPULATION AND SOC. SEC. RESEARCH, CHILD

SUPPORT AND THE POVERTY OF SINGLE-MOTHER HOUSEH OLDS IN JAPAN 1 (2013), http://

www.ipss.go.jp/publication/j/DP/dp2013_e01.pdf; James M. Raymo et al., Marital Dissolution in

Japan: Recent Trends and Patterns, 11 DEMOGRAPHIC RES. 395, 397, 405 (2004).

5. Masami Tamagawa, Same-Sex Marriage in Japan, 12 J. GLBT FAM. STUD. 160, 161 (2016).

The Civil Code provisions on marriage do not expressly prohibit same-sex marriage, but various

articles (e.g., Article 159 on prescription of marital rights, Article 750 on marital names, and