Steven L. Schwarcz
Duke University, Durham, NC 27708
ABSTRACT
For many people, trusts means gratuitous trusts. Even the Restatement of Trusts covers only gratuitous trusts. In recent years, however, trusts increasingly have been used in billions, and now trillions, of dollars of mutual funds, securitizations, and other distinctly non-understanding of whether commercial trusts are a better form of business organization than corporations or partnerships. Indeed, no one has ever asked whether existing trust law is adequate to govern commercial trusts or even whether commercial trusts would be legally recognized as trusts. This Article builds an analytical framework in which to answer these fundamental questions and also shows that commercial trusts and corporations can be viewed as mirror-image entities that respond to different investor needs.