Patrimony Not Equity: the trust in Scotland

While the distinction between legal and equitable ownership is of central importance to the historical development of the trust in England, the idea of trust does not depend on such a distinction. In the mixed legal systems, of which Scotland is an example, there is a fully developed doctrine of trust, but no corresponding doctrine of equity. This suggests that equity is not, after all, the main organising feature of the law of trusts. The argument of this paper is that the fundamental characteristic of the trust is not dual ownership, but dual patrimony. In the normal case a single person has only a single patrimony. But in a trust there are two patrimonies, for, in addition to his private patrimony, the trustee holds a trust patrimony consisting of all the assets and liabilities of the trust. The patrimonies are distinct in law, so that the assets of the trust patrimony cannot be used to meet the liabilities of the personal patrimony. This idea of dual patrimony explains much in the law of trusts that is otherwise puzzling. In particular it explains the substitution of assets when trust property is bought and sold, the protection given to the trust beneficiary against the personal insolvency of the trustee, and the identity of the trust in a manner distinct from those who, for the time being, are its trustees and beneficiaries.