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The Economic Structure of TrustsTowards a Property-based Approach$
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M. W. Lau

Print publication date: 2011

Print ISBN-13: 9780199602407

Published to Oxford Scholarship Online: May 2011

DOI: 10.1093/acprof:oso/9780199602407.001.0001

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Trusts as Entities

Trusts as Entities

(p.61) 3 Trusts as Entities
The Economic Structure of Trusts

M. W. Lau

Oxford University Press

This chapter considers the idea of the trust as an entity, as argued by Henry Hansmann, Rainier Kraakman, and Ugo Mattei (HKM). HKM reason that because trusts have asset-partitioning features and are often treated as legal entities, it is a de facto legal entity. This chapter highlights the porous nature of the trust's asset-partitioning features and the nature of the beneficiary's relationship with trust assets to demonstrate that the trust should not be considered as a legal entity. It draws on the history of organizational law to show that asset-partitioning can be achieved without a legal entity. It also explains that the contribution of trusts to commerce as highlighted by HKM, although real, is not as significant as they purport it to be. Finally, it compares civil law rationalizations of the trust and argues that they need not be considered as legal entities in order to be adopted.

Keywords:   Henry Hansmann, Rainier Kraakman, Ugo Mattei, legal entities, asset-partitioning, corporations, organizational law, civil law

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