The legal institution of trust gives rise to two basic sets of question. The first set concerns the respective rights held by the trustee and the beneficiary with respect to the trust property — do these rights feature a structure characteristic of property, contract, or something in between. The second concerns the normative relationship between the trustee and the beneficiary themselves — what explains the existence and content of the obligations owed by the trustee to the beneficiary, especially the fiduciary duty of loyalty, according to which the trustee is expected to act in the sole, rather than merely the best, interest of the beneficiary. A successful account, moreover, must be able not only to address both sets of question, taken separately, but rather to explain the nature of the connection between them.
I devote these pages to the second basic question. My argument develops two main clusters of claim. Negatively, I seek to show that accounts of the trustee’s fiduciary obligations grounded in and around the settlor’s intention; the virtue of loyalty; or contract fall short of capturing the idea of the trust (whatever it is). Affirmatively, I argue that the grounds and content of the trustee’s fiduciary obligations are, at least in part, the upshot of the special difficulty that the trust institution picks out, namely, what I shall call the excesses of ownership. On this argument, the institution of trust arises in connection with the difficulty of acquiring the standing of ownership, which is a status authority over anyone else with respect to an external object. A Trustee makes possible — that is, creates the legal space for — a derivative status of ownership: That which allows patients (by choice or by chance) to enjoy access to the institution of ownership but, at the same time, to do without the agential powers characteristic of the standing that ownership involves. The duty of loyalty, I shall argue, arises against this backdrop, tracking the role of the trustee in possessing, and sometimes even constituting, the personhood of the beneficiary and thus acting as his alter ego, as it were, in relation to the trust property. In that, the duty of loyalty is consequential to the transubstantiation of the trustee into the bearer of what I shall call the ownership personality of the beneficiary.