Download This PaperHow Much Trust Do Trusts Require?
Fiduciaries and Trust: Ethics, Politics, Economics and Law (Paul B. Miller & Matthew Harding eds., Cambridge University Press 2020)
22 Pages Posted: 9 Sep 2020 Last revised: 28 Sep 2020
Date Written: April 7, 2020
Abstract
How much trust, in the general sense, is required by a trust in the legal sense? The separation of management and beneficial ownership creates a risk that a trustee will act, or fail to act, based on its own interests. This paper explores the features of modern US trust law and practice that elevate the risk and the features that attempt to ameliorate the risk. The paper then offers two striking observations. The first is that US trust law is moving in both directions. Some aspects of modern trust law and practice require greater trust in the trustee, while other aspects of modern law and practice reduce the need for trust in the trustee. The second observation is that, to the extent US state legislatures have enacted rules diverging from uniform acts or Restatements, the divergent rules tend to increase - not decrease - the need for trust in the trustee.
Keywords: trusts; trust law; fiduciaries; fiduciary law
JEL Classification: K11, K36
Suggested Citation: Suggested Citation
Thomas P. Gallanis (Contact Author)
George Mason University - Antonin Scalia Law School ( email )
3301 Fairfax Drive
Arlington, VA 22201
United States