The Idea of a Trust

This chapter introduces the trust as a legal institution. It defines what a trust is, identifies the functions trusts perform in modern legal systems, fixes the technical vocabulary the remainder of the volume presupposes, and distinguishes the trust from adjacent legal relationships with which it is habitually confused — agency, bailment, contract, gift, guardianship, and the corporate form. It is the reader's entry point into trust law. It does not exhaust any doctrine it introduces; each of the concepts opened here is developed at doctrinal depth in a subsequent chapter of this volume or reserved to Volume II.

Master Research Dossier v1.0, §4 (Doctrinal Research: Nature of the Trust; Equitable Foundations; Trust Relationship; Legal and Equitable Title; Trust Property; Beneficiaries; Trust–Fiduciary Interface); §2 (Authority Analysis, tier evaluation); §3 (Historical Development, framing only — full treatment reserved to Chapters 4–5); §7 (Treatise Analysis); §10 (Authority Matrix); §11 (Discrepancy Register — contractarian and property-based characterizations of the trust).

• Uniform Trust Code §§ 102, 103, 401–402
• Restatement (Third) of Trusts §§ 2, 3, 5, 10
• Morice v. Bishop of Durham, 9 Ves. 399 (Ch. 1804), aff'd, 10 Ves. 522 (H.L. 1805)
• Knight v. Knight, 3 Beav. 148 (1840)
• Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545 (1928)
• Scott & Ascher, The Law of Trusts (5th ed.), §§ 2.1–2.3
• Bogert, Bogert & Hess, The Law of Trusts and Trustees (3d ed.), §§ 1, 11–17
• Sitkoff & Dukeminier, Wills, Trusts, and Estates (11th ed.), ch. 6
• Langbein, The Contractarian Basis of the Law of Trusts, 105 Yale L.J. 625 (1995)

• Chapter 2 — Why Trusts Exist: Functions and Purposes (expands §1.02)
• Chapter 3 — The Equitable Foundations of the Trust (expands §1.11)
• Chapter 6 — The Trust as a Legal Institution (expands §1.04)
• Chapter 7 — Legal Title and Equitable Title (expands the two-title conception introduced in §1.01 and §1.03)
• Chapter 8 — The Trust Relationship: Settlor, Trustee, Beneficiary (expands §1.15)
• Chapters 9–13 — The essential elements of a valid trust (expand §1.13)
• Chapter 22 — The Trust–Fiduciary Relationship (expands §1.16)

Chapter 1 is a foundational-doctrinal chapter. Under the Canonical Treatise Architecture decision tree, it uses a reduced Part set, because it introduces rather than resolves doctrine. The Parts applied are Part I (Foundations), Part II (Legal Nature), Part III (Creation, at foundational depth only), Part IV (Operation, at foundational depth only), Part VI (Rights & Duties, at foundational depth only), and Part X (Related Doctrines, at introductory depth only). Part V (Transfer), Part VII (Procedure), Part VIII (Enforcement), Part IX (Defenses), and Part XI (Practical Application) are omitted because they presuppose doctrinal material developed later in this volume or in Volume II; introducing them here would either duplicate later chapters or advance conclusions the reader is not yet equipped to evaluate.

A reader completing this chapter should be able to state what a trust is in terms consistent with the Uniform Trust Code and the Restatement (Third) of Trusts, name and correctly use the technical vocabulary of trust law, and distinguish the trust from the six legal relationships with which it is most often confused. The reader should not yet expect to be able to draft a trust, evaluate the validity of a particular instrument, or predict how a court will resolve a trust dispute; those competences are built progressively across the remaining chapters of Volume I and completed in Volume II.

The trust is a legal institution by which one person, the trustee, holds title to property subject to enforceable duties to hold, manage, or dispose of that property for the benefit of another, the beneficiary, or for a permitted purpose. The definition is deceptively simple, and every operative term in it — "title," "enforceable duties," "for the benefit of," "beneficiary," "permitted purpose" — carries doctrinal weight that later chapters unpack. What matters at the outset is that the trust is neither a contract nor an entity, but a distinctive legal relationship in which the incidents of ownership are divided between the person who holds legal title and the person for whose benefit that title is held.

The Uniform Trust Code adopts a functional definition. Section 103(18) defines a "trust" by reference to the categories of trust the Code governs — express trusts, whether inter vivos or testamentary — and § 402 identifies the elements required to create one. The Code does not attempt a philosophical definition; it identifies the operative elements and leaves conceptual work to the courts and to the Restatement. Section 102 confirms that the Code applies to express trusts and to trusts required by statute, judgment, or decree, and that it does not displace the common law of trusts except as expressly modified.

The Restatement (Third) of Trusts § 2 supplies the governing conceptual definition:

Four propositions are embedded in that formulation and govern the analysis for the remainder of this volume. First, the trust is a relationship, not a person, not a contract, and not an entity. Second, the relationship is fiduciary, meaning it imposes duties of loyalty and care that operate independently of any bargain the parties struck. Third, the relationship is with respect to property, meaning it cannot exist in the abstract; there must be identifiable subject matter. Fourth, the relationship arises from a manifestation of intention, meaning it is created by the deliberate act of the settlor and not by operation of law — a proposition qualified in Chapters 20 and 21, which treat resulting and constructive trusts, both of which arise by operation of law and neither of which is properly described as expressing the settlor's intent.

Two conceptions of the trust recur throughout the doctrinal material and it is useful to state them at the outset.

The three-party conception describes the trust by reference to its participants: a settlor, who creates the trust; a trustee, who holds title and administers the property; and a beneficiary, for whose benefit the property is held. Roles can overlap — a settlor may be trustee, a settlor may be beneficiary, a trustee may be one of several beneficiaries — but Restatement (Third) § 2 and UTC § 402(a)(5) require that the same person not be sole trustee and sole beneficiary, for reasons developed in Chapter 8. The three-party conception is pedagogically indispensable; nearly every rule of trust law can be traced to the position, powers, and duties of one of the three participants.

The two-title conception describes the trust by reference to the property. Legal title is held by the trustee and carries the powers of management, disposition, and litigation ordinarily associated with ownership. Equitable title is held by the beneficiary and carries the right to the benefit of the property and the right to enforce the trust against the trustee. This division of the incidents of ownership between two persons is the doctrinal hallmark of the trust and the feature that distinguishes it most sharply from the common-law forms of property holding that preceded it. Chapter 7 develops the two-title conception in full; the reader should treat the summary here as introductory only.

The two conceptions are not competing; they are complementary. The three-party conception organizes the persons; the two-title conception organizes the property. Together they capture what the Restatement means when it defines the trust as a fiduciary relationship with respect to property.

Trusts perform work that other legal institutions perform poorly or not at all. Four functions recur across the doctrinal and empirical literature and organize the treatment in Chapter 2.

Wealth transmission. Trusts permit property to be transmitted across time and across generations on terms the transferor specifies. A will transmits property at a single moment — death — and once assets pass to the devisee they leave the transferor's control. A trust transmits property subject to continuing terms: distribute at twenty-five, distribute for support and education, distribute at the trustee's discretion informed by a stated purpose. The trust is, in this sense, the principal legal instrument by which a decedent's judgment about property can operate after death.

Management of property for persons who cannot manage it themselves. Minors, persons under legal disability, and adults whose circumstances make direct ownership impractical can hold property beneficially through a trust while the trustee bears the burdens of management. The alternative — guardianship or conservatorship — is more intrusive, more court-supervised, and less flexible; §1.09 develops the distinction.

Separation of ownership from beneficial enjoyment. Some property arrangements are impossible without separating the person who holds and manages from the person who benefits. Pension trusts, employee benefit trusts, common-law charitable trusts, and pooled investment vehicles all depend on this separation. The trust is the legal technology that makes the separation stable and enforceable.

Institutional continuity. Because a trust is not a person, it does not die; because it is not an entity, it does not require the corporate formalities that would otherwise be needed to sustain a legal actor across time. A properly drafted trust can hold and administer property for as long as the applicable rule against perpetuities permits — and, in a growing number of jurisdictions, indefinitely. Institutional continuity is the reason charitable foundations, university endowments, and dynastic wealth arrangements are ordinarily organized as trusts rather than as corporations.

Chapter 2 catalogs these functions systematically and develops the doctrinal implications of each. The purpose of the survey here is to signal, at the outset, that the trust is not an abstract construct but an institution whose form is explained by the work it does.

Trust law uses a specialized vocabulary. The reader who does not master the vocabulary at the outset will find later chapters unnecessarily difficult. The following terms recur throughout the volume; each is developed at greater depth where it is doctrinally central.

Settlor. The person who creates the trust by manifesting the intention to do so and, ordinarily, by transferring property to the trustee or declaring themselves trustee of identified property. The Restatement and UTC use "settlor"; older authorities also use "trustor," "grantor," and (in the testamentary context) "testator." The terms are equivalent for most purposes but are not always interchangeable in tax contexts, which Volume II treats.

Trustee. The person who holds legal title to the trust property and bears the fiduciary duties of administration. A trust may have one trustee or several; where several, they ordinarily act jointly, subject to variation by the terms of the trust or by statute.

Beneficiary. The person for whose benefit the trust property is held. A trust may have one beneficiary or many; interests may be present or future, vested or contingent, mandatory or discretionary. Chapter 12 develops the requirement that beneficiaries be ascertainable and the exceptions to that requirement.

Trust property, corpus, principal, or res. The property that is the subject of the trust. The trust cannot exist without identifiable trust property; the "res requirement" is developed in Chapter 11.

Legal title. The form of title held by the trustee, carrying the powers of management, disposition, and litigation ordinarily associated with ownership at common law.

Equitable title. The form of title held by the beneficiary, historically enforceable only in courts of equity, carrying the right to the benefit of the trust property and the right to compel the trustee to perform the terms of the trust.

Terms of the trust. The manifestation of the settlor's intention, express or implied, that governs the administration of the trust. UTC § 103(18). The terms of the trust supply the default rule for nearly every question of trust administration; the Code's and Restatement's rules are default rules from which the terms of the trust may depart except to the extent otherwise provided.

Fiduciary duty. The category of duty imposed on the trustee by reason of the trust relationship: at a minimum, the duties of loyalty and care, and typically also the duties of impartiality, prudence, and to inform and account. The duties are developed in Volume II and introduced doctrinally at Chapter 8 and Chapter 22.

Other terms — "power of appointment," "spendthrift provision," "remainderman," "vested," "contingent," "discretionary," "support," "mandatory" — are defined where they first bear analytic weight.

The trust is a legal relationship, not a legal person. A trust cannot sue or be sued in its own name at common law; suit is brought by or against the trustee in the trustee's fiduciary capacity. A trust does not own property in the sense that a corporation owns property; the trustee owns the property, subject to the terms of the trust. A trust does not have shareholders, members, directors, or officers; it has a settlor, a trustee, and beneficiaries, and those roles are governed by trust law rather than by entity law. Chapter 6 develops the institutional character of the trust in doctrinal detail. What matters here is the negative proposition: whenever a rule of law appears to treat the trust as a person or an entity — as some statutory and tax provisions do — that treatment is a deliberate legislative choice and not an inference from the common-law nature of the trust.

An important scholarly disagreement bears on the characterization of the trust and should be acknowledged at the outset. The traditional view, associated with Scott, Bogert, and the Restatements, characterizes the trust as a proprietary institution: the beneficiary holds an equitable property interest in the trust res, and the trustee's duties are duties respecting property. The contractarian view, developed most influentially by Langbein, characterizes the trust as functionally contractual: the settlor and the trustee agree on the terms of a bargain that governs the management of property for a third-party beneficiary, and the trust's rules are best understood as default terms of that bargain (Langbein, 105 Yale L.J. 625 (1995)). The Dossier records the disagreement in §11 and does not resolve it beyond noting that the American Law Institute has retained the proprietary characterization in the Restatement (Third) while acknowledging the functional force of the contractarian critique. This volume follows the Restatement's characterization for doctrinal purposes and flags contractarian analyses at the points where they materially affect the reasoning — principally in §1.07 and in Chapter 8.

Agency and trust are the two legal relationships that most obviously involve one person acting with respect to property for the benefit of another, and they are frequently confused. The distinctions are doctrinal, not verbal, and they matter.

Title. An agent does not hold title to the principal's property; the principal retains title and the agent acts on the principal's behalf. A trustee holds title to the trust property; the beneficiary does not.

Control. An agent acts subject to the principal's continuing control and direction. A trustee acts subject to the terms of the trust, not to the beneficiary's control; the beneficiary may enforce the terms but may not direct the trustee's discretion beyond what the terms provide.

Termination. Agency is ordinarily terminable at will by either the principal or the agent. A trust, once created, is ordinarily not terminable at the settlor's or beneficiary's unilateral will; the doctrine of revocability is treated in Chapter 17 and the doctrine of modification and termination is reserved to Volume II.

Liability to third parties. An agent contracting for a disclosed principal is not personally liable on the contract; the principal is. A trustee contracting on behalf of the trust is, at common law, personally liable on the contract, though with a right of indemnity from the trust estate. UTC § 1010 and the Restatement (Third) modify this default in significant respects, and Volume II develops the modern rules.

Bailment is the legal relationship in which one person, the bailee, takes possession of another's personal property under an obligation to return it or to deal with it as directed. Trust and bailment share the feature that one person holds another's property; they diverge on every other axis.

Title. A bailee holds possession only; title remains in the bailor. A trustee holds title; possession follows title.

Subject matter. Bailment is confined to personal property capable of being possessed. Trust extends to any property capable of being owned, including real property, choses in action, intangibles, and equitable interests.

Duties. A bailee's duties are duties of care with respect to the bailor's property; they are not fiduciary in the strict sense. A trustee's duties are fiduciary in the strict sense, including the duty of loyalty developed in Chapter 22 and in Volume II.

Beneficiary. Bailment runs to the bailor. Trust runs to the beneficiary, who is ordinarily not the settlor.

The distinction between trust and contract is the most doctrinally contested of the distinctions treated in this Part, for the reasons noted in §1.04. It is also the distinction most likely to matter in litigation, because the party invoking the trust characterization ordinarily seeks the fiduciary remedies of equity, and the party resisting it ordinarily seeks the contractual remedies of law.

Parties and privity. Contract requires two or more contracting parties. Trust requires only a settlor whose intention to create the trust is sufficiently manifested; the beneficiary need not consent to the trust, need not be capable of consenting, and need not even exist at the time the trust is created, provided the beneficiary is ascertainable when the interest is to take effect.

Consideration. Contract requires consideration, or a substitute for it. Trust does not; a trust may be created by gratuitous transfer, and the absence of consideration is not a defect in trust creation. Chapter 9 develops the intent requirement and confirms that gratuitous manifestation of intent is sufficient.

Duties. Contract duties are ordinarily those the parties bargained for. Trust duties are ordinarily those the law imposes — loyalty, care, impartiality, prudence — subject to modification by the terms of the trust within limits set by the mandatory rules of UTC § 105.

Remedies. Breach of contract is ordinarily remedied by damages measured by the plaintiff's expectation. Breach of trust is remedied by the equitable remedies traced in Volume II: surcharge, constructive trust, tracing, injunction, removal, and denial of compensation, among others.

Langbein's contractarian analysis does not deny these doctrinal differences; it argues that they are best explained as the default terms of a functionally contractual arrangement between settlor and trustee. Whether one accepts that analysis or not, the doctrinal distinctions retain their force, and this volume presents them as such.

A completed gift transfers title outright; the donee holds the property as owner and owes no duties to the donor. A trust transfers title subject to duties; the trustee is not owner in the outright sense and cannot deal with the property as if the property were the trustee's own.

A distinguishing question sometimes arises when a purported outright transfer is accompanied by precatory language — "I give this to A in the confidence that A will use it for B." Whether such a transfer creates a trust or a gift depends on whether the words impose an enforceable duty on A or merely express a hope; the leading formulation is Knight v. Knight, 3 Beav. 148 (1840), and its "three certainties" — intention, subject matter, and objects — govern the analysis, which Chapter 9 develops in full.

Guardianship and custodianship are court-supervised (guardianship) or statute-governed (custodianship, chiefly under the Uniform Transfers to Minors Act) mechanisms by which one person manages property for a person under disability. They share with the trust the feature of management for another; they differ in their origins, formalities, scope, and flexibility.

Origin. Guardianship arises by court appointment; custodianship arises by statutory transfer; trust arises by the settlor's manifestation of intent.

Duration. Guardianship and custodianship terminate at the beneficiary's majority or at the removal of the disability. Trust duration is fixed by the terms of the trust and by the applicable rules against perpetuities.

Flexibility. Trust terms may be as elaborate or as spare as the settlor's judgment supports. Guardianship and custodianship are governed by statutory templates with narrow room for variation.

Supervision. Guardianship is closely supervised by the appointing court; custodianship is minimally supervised; trust supervision varies with the terms of the trust and the applicable jurisdiction's rules on trustee accountings.

The corporation, the limited liability company, the partnership, and the trust are all legal technologies for holding property and conducting activity across time and on behalf of persons other than the actor. The trust differs from the entity forms in three doctrinally decisive respects.

Personhood. Corporations, LLCs, and (increasingly) partnerships are legal persons capable of owning property in their own name, suing and being sued, and contracting. Trusts are not, at common law.

Internal governance. Entity governance is supplied by the constitutive instrument (charter, operating agreement, partnership agreement) and by mandatory statutory rules of the applicable entity statute. Trust governance is supplied by the terms of the trust and by the default and mandatory rules of trust law (UTC § 105).

Beneficial interests. Entity interests — shares, membership interests, partnership interests — are ordinarily transferable and are held under a body of law (corporate, LLC, or partnership) distinct from trust law. Beneficial interests in a trust are transferable subject to the terms of the trust and the applicable spendthrift and other restraint rules, which Volume II treats.

The distinction has practical consequences. Modern statutes in several jurisdictions have created "statutory trusts" that behave in many respects like entities — Delaware statutory trusts are the leading example — and modern business practice uses trusts as investment vehicles (mutual funds, REITs, pension plans, securitization vehicles) that are, functionally, closer to entities than to traditional common-law trusts. This volume treats the common-law trust as its subject and reserves the statutory and commercial trust forms to later volumes of the collection.

The trust is the creation of equity, not of the common law. Its enforceability, its remedies, and its analytic vocabulary trace to the jurisdiction of the Court of Chancery, which recognized and enforced the equitable interest of the beneficiary against the legal owner (the feoffee to uses, historically; the trustee, in modern usage) at a time when the common-law courts recognized only the legal interest. The equitable character of the trust explains features that would otherwise be anomalous: the fiduciary duties, the remedies of surcharge and constructive trust, the tracing rules, the doctrine of following, and the beneficiary's ability to compel administration in accordance with the terms of the trust rather than merely to recover damages for their breach.

Chapter 3 develops the equitable foundations of the trust in full, and Chapters 4 and 5 develop the historical account. What matters here is that the trust cannot be understood as a purely common-law institution; its distinctive rules follow from its equitable origin, and the reader should treat that origin as a working premise for the remainder of the volume.

To create a trust is to bring into existence, by a legally sufficient act, the relationship defined in §1.01. The act is legally sufficient when the settlor has manifested an intention to create a trust with respect to identifiable property, for one or more ascertainable beneficiaries (or for a permitted purpose), and — where formalities are required — has complied with them. UTC § 402; Restatement (Third) of Trusts § 10.

The act may take several forms. The settlor may transfer property to a trustee to hold on trust — the classic "transfer in trust." The settlor may declare that the settlor holds identified property as trustee for a beneficiary — the "declaration of trust." The settlor may exercise a power of appointment in trust, or may direct by will that trust property be held on stated terms. Each mode is doctrinally sufficient, and Chapters 9 through 15 develop the doctrine associated with each.

Creation is not the same as funding, though the two are commonly conflated. A trust cannot exist without trust property, but the property may be nominal at creation and augmented later; the res requirement is examined in Chapter 11. Creation is not the same as validity; a created trust may still fail for want of a lawful purpose (Chapter 13), for want of ascertainable beneficiaries (Chapter 12), or for failure of the applicable formalities (Chapters 14–15). The reader should treat "created" and "valid" as distinct concepts and preserve the distinction in analysis.

Trust law identifies a small number of elements without which no trust can come into being. They are traced in canonical form to Knight v. Knight's three certainties — intention, subject matter, and objects — and elaborated in modern form by UTC § 402 and Restatement (Third) § 10. This volume treats each element in a dedicated chapter, and the reader should treat the list below as a map to those chapters rather than as a substitute for their analysis.

• Intention. The settlor must manifest an intention to create a trust. Chapter 9.
• Capacity. The settlor must have legal capacity to create the trust. Chapter 10.
• Trust property. There must be identifiable property that is the subject of the trust. Chapter 11.
• Beneficiaries. There must be one or more ascertainable beneficiaries, or the trust must be for a permitted charitable or noncharitable purpose. Chapter 12.
• Lawful purpose. The purposes of the trust must be lawful, not contrary to public policy, and possible to achieve. Chapter 13.
• Formalities. Where the applicable law requires a writing (as for testamentary trusts, and, in many jurisdictions, trusts of real property), the formalities must be satisfied. Chapters 14–15.

Nothing in the list is optional. A purported trust that fails any of these elements does not exist as a trust, whatever the parties may have called it or intended. What effect the failed instrument has — outright transfer, resulting trust, constructive trust, or nothing at all — depends on the reason for the failure and is treated in the chapters cited.

Once created, a trust operates through the trustee's administration of the trust property in accordance with the terms of the trust and the applicable default and mandatory rules. The trustee takes and holds legal title; collects, invests, and manages the trust property; makes distributions to or for the benefit of the beneficiaries as the terms of the trust require or permit; keeps records and renders accounts; and, at the termination of the trust, distributes the remaining property in accordance with the terms of the trust or the applicable default rules.

The doctrinal machinery that governs administration — the duties of loyalty, care, impartiality, prudence, and to inform and account; the powers of the trustee; the standards of investment; the rules of allocation between principal and income; the remedies for breach; the rules of modification and termination — is the subject of Volume II. This chapter mentions administration only to complete the introductory picture; the reader should not attempt to draw doctrinal conclusions about administration from the sketch given here.

Two features of operation should be flagged now because they organize the reader's expectations for the remainder of Volume I. First, the terms of the trust generally control. UTC § 105 provides that the terms of the trust prevail over the Code's rules except as to a defined list of mandatory provisions; the Restatement (Third) reaches an equivalent result. Trust law is, in this sense, a body of default rules built around a small core of mandatory rules. Second, the beneficiary is the enforcer. A trust is not self-executing; if the trustee fails to perform, someone must invoke the courts, and that person is ordinarily the beneficiary or, in a charitable trust, the attorney general. The enforceability of the trust by the beneficiary is developed in Chapter 8 and completed in Volume II.

The trust distributes rights and duties among three persons, though — as noted in §1.01 — the same natural person may occupy more than one of the three positions.

The settlor creates the trust, fixes its terms, and — depending on whether the trust is revocable — retains or forfeits the power to alter or revoke it. Once the settlor has parted with control of an irrevocable trust, the settlor has, in principle, no further role in its administration except as the terms of the trust may provide. The revocability default is treated in Chapter 17.

The trustee holds legal title, administers the property, and owes the fiduciary duties introduced in §1.03 and developed in Chapter 22 and Volume II. The trustee's role is defined by the intersection of the terms of the trust and the applicable default and mandatory rules; the trustee's discretion, however broad, is always exercised subject to fiduciary constraint.

The beneficiary holds equitable title, is entitled to the benefits the terms of the trust provide, and holds the primary standing to enforce the trust against the trustee. The beneficiary's rights are treated in Chapter 8 and completed in Volume II.

Chapter 8 develops the tripartite relationship in doctrinal detail. The point to fix here is that trust law's rules are best organized by asking which of the three participants a rule concerns and what role the rule plays in mediating the relationship among the three.

The trust is the paradigmatic fiduciary relationship, but it is not the only one. Corporate directors, partners, agents, attorneys, executors, administrators, guardians, and — in some jurisdictions and some contexts — investment advisers, financial planners, and health-care providers stand in fiduciary relationships to those they serve. The duties characteristic of trust law — loyalty, care, and, in many formulations, candor and good faith — recur across these relationships, though the doctrinal specifics vary. Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545 (1928), is often cited for the proposition that fiduciary obligation is a unified moral standard applied across relationships; the scholarly literature, and particularly Frankel's Fiduciary Law, is more cautious, treating fiduciary duty as a family of related but distinct legal doctrines organized around the common feature of one person's discretionary power over another's interests.

Chapter 22 develops the trust–fiduciary interface at doctrinal depth: which duties are common to all fiduciary relationships, which are particular to trust, and how the trust doctrine has influenced (and been influenced by) the broader fiduciary law. The Trust & Fiduciary Law Collection returns to this material at length in later volumes. What matters here is that the reader recognize the trust as an instance of a broader legal category, so that trust-specific reasoning is not applied without qualification to non-trust fiduciary relationships, and so that fiduciary reasoning drawn from non-trust settings is used in trust analysis only with attention to the doctrinal fit.

1. A trust is a fiduciary relationship with respect to property, arising from a manifestation of intention to create it, by which the trustee holds title subject to duties to deal with the property for the benefit of one or more beneficiaries or for a permitted purpose. Restatement (Third) of Trusts § 2; UTC §§ 102, 103, 402.
2. The trust is a legal relationship, not a legal person or entity, at common law. Consequences follow: the trustee, not the trust, holds title; the trustee, not the trust, sues and is sued; and the trust's rules are those of trust law, not those of entity law.
3. Every trust divides the incidents of ownership between the trustee, who holds legal title, and the beneficiary, who holds equitable title. This two-title conception is the doctrinal hallmark of the trust.
4. Every trust involves — in principle — three roles: settlor, trustee, and beneficiary. The same person may occupy more than one role, but the same person cannot be sole trustee and sole beneficiary of the same interest.
5. Trusts are creatures of equity. Their enforceability and their distinctive remedies trace to the jurisdiction of the Court of Chancery, and their modern doctrine cannot be understood without that origin.
6. The trust is distinguished from agency, bailment, contract, gift, guardianship, custodianship, and the entity forms by identifiable doctrinal features — chiefly the location of title, the source and character of the duties, the identity of the enforcer, and the applicable body of remedial law.
7. Creation of a trust requires manifestation of intent, capacity, trust property, ascertainable beneficiaries (or a permitted purpose), lawful purpose, and satisfaction of any applicable formalities. Failure of any element defeats creation.
8. The terms of the trust generally control administration; trust law provides default rules and a small core of mandatory rules (UTC § 105).
9. The trust is one member of a broader family of fiduciary relationships. Fiduciary reasoning drawn from non-trust settings may inform trust analysis, and vice versa, but only with attention to the specifics of doctrinal fit.

• Uniform Trust Code §§ 102, 103, 105, 402, 1010
• Restatement (Third) of Trusts §§ 2, 3, 5, 10
• Morice v. Bishop of Durham, 9 Ves. 399 (Ch. 1804), aff'd, 10 Ves. 522 (H.L. 1805)
• Knight v. Knight, 3 Beav. 148 (1840)
• Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545 (1928)

• Scott & Ascher, The Law of Trusts (5th ed.) §§ 2.1–2.3
• Bogert, Bogert & Hess, The Law of Trusts and Trustees (3d ed.) §§ 1, 11–17
• Sitkoff & Dukeminier, Wills, Trusts, and Estates (11th ed.) ch. 6
• Langbein, The Contractarian Basis of the Law of Trusts, 105 Yale L.J. 625 (1995)
• Frankel, Fiduciary Law (2011)

Backward. None. This is the opening chapter of the volume.

Forward, within Volume I.

• §1.02 → Chapter 2 (Functions and Purposes)
• §1.11 → Chapter 3 (Equitable Foundations)
• §1.04 → Chapter 6 (The Trust as a Legal Institution)
• §1.01, §1.03 → Chapter 7 (Legal Title and Equitable Title)
• §1.15 → Chapter 8 (Settlor, Trustee, Beneficiary)
• §1.12, §1.13 → Chapters 9–13 (Essential Elements) and Chapters 14–15 (Formalities)
• §1.16 → Chapter 22 (Trust–Fiduciary Relationship)

Forward, to Volume II. Administration, duties of loyalty and care, prudent investor rule, allocation between principal and income, remedies for breach, modification and termination — all reserved.

Chapter 1 has established what a trust is and distinguished it from the legal relationships with which it is habitually confused. It has not yet explained why the trust exists — why, that is, this particular institution developed in preference to available alternatives, and what work it performs in modern legal systems that other institutions perform less well or not at all. Chapter 2 takes up that question, treating the functions and purposes of the trust in doctrinal detail and preparing the reader for the historical account that follows in Chapters 4 and 5.