The Intriguing Thousand Year Trust Cases

Back in law school in the 1970s, my Estate Law professor told us the story of the "thousand year trusts." I have not seen or heard this story anywhere else. It goes as follows.

Back in Middle Ages Europe, the richest merchants found a new way to flaunt their wealth. They would go to their friendly neighborhood bank, and plunk down the equivalent of, say, $1,000.00 today, and get a 1,000 year certificate of deposit earning simple interest compounded annually at, say, 3%, so that, after 1 year, the certificate would be worth $1,030.00, and after 2 years it would be worth $1,060.90, and so on.

3% interest accumulates pretty slowly, at first. But, 1,000 years is a long time. So, what the merchants bragged about was how, when the $1,000.00 certificate of deposit came due 1,000 years later, it would be worth $6,674,019,641,911,970.00 -- over $6 quadrillion -- to their remote descendants.

In the 1700s, when these CDs were getting to be worth about $1 trillion each in today's dollars, some of the descendants made quiet inquiry into the safety of their ancestors' deposits.

Again and again, the banks said the same thing. "What CD? What are you talking about?"

The best guess was that the deposits had been stolen by the banks or their managers, at some point.

The merchants' descendants began to file suit against the banks for their money.

In every single case, the lawsuits were dismissed, on the grounds that the CDs gave their ultimate heirs too much economic power.

In other words, somebody inheriting $6 quadrillion simply had too much power in his hands -- enough to buy entire nations.