Academic journal article Boston University Law Review

The Governmental Stake in Private Wealth Transfer

Academic journal article Boston University Law Review

The Governmental Stake in Private Wealth Transfer

Article excerpt


The central policy of wealth transfer law is one of abiding deference to private ordering and donative choice.1 With sparingly few exceptions, wealth transfer law governs by default rules and the freedom of disposition grants donors sweeping autonomy to dictate the terms of a gift.2 Mandatory restrictions on dispositional freedom are minimal and mostly confined to transfers that generate contexts where regulation is necessary to minimize spillover costs or harm to private, non-consenting third parties.3 However, in a fundamental and unexplored tension between private and governmental interests, the law has reserved for the government a notably muted role in regulating private wealth transmission.4 This Article argues that wealth transfer law reforms lack a unifying principle to protect important governmental interests in (1) the enforcement of criminal and civil laws; (2) the allocation and conservation of public financial resources; and (3) efficiency in the administration of justice, among a host of other potentially sovereign interests.

To orient our thinking about the governmental stake in private wealth transfer, let us begin with a concrete, timely, and superlative illustration: President Donald J. Trump has been assailed by ethics watchdogs since the start of his presidential campaign for failing to address the innumerable conflicts of interest between his decision-making authority as head of state and his continued control of a sprawling but opaque family business.5 Among the many potential conflicts are President Trump's business dealings with the U.S. government and foreign sovereigns in his personal capacity-transactions in which he may be tempted to favor his own private interests when making official decisions on the government's behalf.6

One widely reported conflict involves President Trump's stake in the Trump International Hotel in Washington, D.C., located in a historic decommissioned post office owned by the federal government.7 Several interrelated Trump entities, including multiple revocable trusts established for the benefit of President Trump and his adult children,8 lease the hotel premises from the U.S. government under the supervision of the federal General Services Administration ("GSA").9 The GSA lease expressly prohibits any elected official from being "admitted" to share in the lease or receive any benefit therefrom.10 Presumably, this requirement would disqualify President Trump's own continued participation in the lease because he is now an elected official. Additionally, because the hotel does business with foreign governments,11 President Trump's involvement may also violate the anti-corruption mandate of the Emoluments Clause of the Constitution.12

In June 2017, two hundred members of the United States Congress filed a civil action against President Trump to enforce the Emoluments Clause and enjoin his acceptance of benefits from foreign states without prior Congressional consent.13 Significantly, the complaint singles out President Trump's refusal to disclose information about his businesses as a particular impediment to Congress' ability to detect potential violations of federal law and the Constitution.14

President Trump contends that laws prohibiting conflicts of interest do not apply to him,15 but that he nevertheless has resolved all possible conflicts voluntarily by transferring ownership of his business interests to the "Donald J. Trump Revocable Trust."16 President Trump is a current trust beneficiary and retains the power to unilaterally revoke the trust.17 President Trump's selection of closely related trustees-his two adult sons and his longtime chief financial officer18-implies further control over the trust's administration.

President Trump's attorneys maintain that his revocable trust sanitizes all improper business conflicts-specifically, they claim that the Trump International Hotel lessors comply with the GSA lease because Trump's indirect ownership in the trust means that he is not "admitted" (quoting the GSA agreement) to share in the lease. …

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