If all relationships are contracts, then all relationships are governed by the terms of the “deal.” Under such a regime, fiduciary duty becomes simply another term of the implied bargain:
Fiduciary duties are not special duties; they have no moral footing; they are the same sort of obligations, derived and enforced in the same way, as other contractual undertakings.
* * *
Scholars of non – or antieconomic bent have had trouble coming up with a unifying approach to fiduciary duties because they are looking for the wrong things. They are looking for something special about fiduciary relations. There are is nothing special to find… Contract law includes a principle of good faith in implementation – honesty in fact under the Uniform Commercial Code, plus an obligation to avoid (some) opportunistic advantage taking. Good faith in contract merges into fiduciary duties with a blur and not a line. Searching for the right definition of a fiduciary duty is not a special puzzle. In short there is no subject here, and efforts to unify it on a ground that presumes its distinctiveness are doomed.[1]
[1] Frank H. Easterbrook & Daniel R. Fischel, “Contract and Fiduciary Duty,” 36 J.L. & Econ. 425, 427 & 438 (1993).
Articles
- 1. Background
- 5.1.2 The Traditional Role of Fiduciary Duty in the Partnership Relationship
- 2.3.4 S Corporation Stock
- 2.3.5 Flexibility as to Tax Year/ Estimated Tax Payments
- 5. Issues
- The Estate Planning Implications of Stripping Fiduciary Duty from the Uniform Partnership Acts in Maryland and D.C.
- 1. The Historic Roots and Development of Tenancy by the Entirety
- 6.7 Plain Meaning and Inter Vivos Trust
- Overview of Family Limited Partnerships
- 11.1 The Non-Probate “Revolution”
- 5. The Maryland/ D.C. Experience
- Estates & Trusts 101: Planning for Minor Children
- 1.2 The “Terms of the Trust”
- Relevant Vocabulary
- 5.3 Joint Action Necessary
- 2.1 Common Law Rule
- 10.2 Management Rights; Fiduciary Obligations
- 1.1.4 Efficacy of Revocable Trusts as Will Substitutes
- 10.5 LLCs
- 9.4 UTC Approach
- IV. Health Care Directives
- 1.2 The Federal Regarding the Tax Burden
- 2.5 The Statutory Enumeration of Powers
- 11.4 Revocable Trusts
- 2.1 Introduction
- 4.3 Good Faith in the Performance of the Deal
- 3.1.1 The Minimum Distribution Rules
- 3.2.1 Required in Every Case Involving Extended Discretion
- Choice of Law: Tenancy by the Entirety Across State Lines
- 3.2.2 Only Certain Trusts to be Permitted as a Designated Beneficiary
- 1. Overview of Fiduciary Relationships
- 3.5 Spendthrift Clauses and Trust Termination
- 1. General Background
- 2.2 Actions Against Trustees in General
- 1.4.3 The Contractarian Worldview
- 2.6 Ascertainable Standards and Estate Planning
- The Insolvent Estate (Select Topics from the Maryland Perspective)
- 2.3.3 Other “Exceptions” to the Plain Meaning Rule
- 6.2 The Uniform Trust Code Codifies the Common Law
- Duties of a Personal Representative
- 1.4 Fiduciary Duty as a Separate and Stand-Alone, Non-Contract Principle
- 1.3.1 Implied Bargain
- 1.1 Planning for Minor Children After the Parents’ Death
- Selected Issues Regarding the Orphans Court Jurisdiction
- 2.2 Advocate of a Contractarian View of Trusts
- 4. Preserving the Assets
- 2.2 The Prudent Investor Act
- 3.1 IRC § 721 (b)
- 5.2 Limits to Exculpatory Clauses
- 6.6 Other “Exceptions” to the Plain Meaning Rule
- 1.5 Examples of Tax Clauses
- 4.1.2 Commissions and Legal Expenses
- 1.2 Fiduciary Duty in Law of Partnership
- 10.3 Proposed Changes to MRULPA
- 6.3 Exceptions to the Plain Meaning Rule
- 3.4.1 Exercise of Fiduciary Duty
- 3.3 Enforceable Rights to Beneficiaries
- 3.1.1 Good Faith Test
- 1.4.1 The Uniform Trust Code
- 3.2.1 Dead Man’s Statute is Strictly Construed
- 2.1 Fiduciary Duty Owed by the Trustee
- 2.11 Beneficiary Right to Enforcement and the Supplemental Needs Trust
- 10.1 The Charging Order
- 5.5 Diversification and the Modern Portfolio Theory
- 4.2 UTMA Accounts
- 3.3 MUDOPIA
- The “Terms of the Trust” Extrinsic Evidence of Settlor Intent The Intersection of Planning and Litigation Highlighting Differences Among the Jurisdictions
- 2.3 Even with the Plain Meaning Rule Under the Common Law, There were Exceptions or “Workarounds” Around the Rule
- 3.1.2 Settlor’s Intent
- 8.5 The Beneficiary as Trustee of Third Party Trusts
- 4.1 The Maryland “General” Power
- 2.3.3 Other Losses During Administration
- 3.2 The Maryland Law
- 4.7 The Rights of Remainder Beneficiaries and Ascertainable Standards
- 8.1 The Maryland Dead Man’s Statute
- 2.5 Retaining the Categories in the Maryland Trust Code Proposal
- 2.4.1 Federal Estate Tax
- 2.3 “Respectable” Asset Protection Planning
- 1.3 Contractarian Basis
- 1.2.2 Irrevocable Trust
- 7.1 The State of Mind/Intent Exception to the Hearsay Rule
- 7.2 Exception Covers the Declarant’s Later Action
- 1.3 Fiduciary Duty Generally
- 8.2 Creditors and Limited Powers of Appointment
- 4.2 The Support/Discretionary Trust Distinction in Maryland
- 1.3.4 Joint Trusts/Joint Wills Issues
- 4.5 Ascertainable Standards and Estate Planning
- 2.3.1 The Latent Ambiguity Exception
- 1.2 The Importance of the Right to Information
- 4.2.1 Prohibiting Conduct That Frustrates the Explicit Agreement
- 5.7 The Craft Case
- 1.3.3 Joint Trusts and Entireties Property
- 5.2 Power of Attorney With the Ability to Disclaim
- 7.1 In General
- 4. Bankruptcy Reform
- 12.1 Enforcement of Liens
- 2.4 The Handling of the Plain Meaning Rule Under the U.T.C.
- 1.1 The Origin of the Duty Owed
- 1.1.5 Separation of Beneficial and Equitable Titles
- 4.3 Creditors and General Powers of Appointment
- 4.8 Extended Discretion and Court Enforcement of Distributions
- 6.4 The Latent Ambiguity Exception
- 5.2 The Prudent Investor Rule
- 8.5 Opening the Door to Excluded Evidence
- 6.3 Domestic Asset Protection Trusts
- 2.3.11 Election Under IRC Sec. 645 to Treat Revocable Trusts as Part of Probate Estate
- 10.4 Partnership Interests in Bankruptcy
- 1.2 Impact of Evidentiary Rules in General
- 3.4 Traditional Trust Sense
- 5.4 Creating or Adding to Entity Property
- 2.8 The Rights of Remainder Beneficiaries and Ascertainable Standards
- 1.1.6 Lack of Separation
- 1.1.2 Whether an express trust has been created is a factual determination
- 3.1 “Transfer Creating the Interest”
- 1.1.3 Trustee and Cestui Que
- 1.1 The Tax Clause as a Bequest
- 2.10 Extended Discretion and the Uniform Trust Code
- 1.2.1 Definition
- 1.3 Maryland Common Law
- 2.1 Uniform Disclaimer of Property Interests Act
- 4.1 Fraudulent Conveyance Look-Back Period
- 4.3 Limits on Homestead Exemption
- 4.1 “Good Faith and Fair Dealing”
- 1.2.1 Common Law
- 8.4 Creditors and Non-Testamentary General Powers of Appointment
- 2.2 Medicaid
- 3.1 Background
- 2.6 Tortious Interference with an Inheritance
- 5.2 The 1997 Revised Uniform Partnership Act and The 2001 Revised Uniform Limited Partnership Act
- 3.2 QTIP Rule
- 7.3 Future Action May Include No Action
- 2.3.4 Regardless of the Plain Meaning Rule for Testamentary Trusts, the Plain Meaning Rule Never Applied to Inter Vivos Trusts
- 3.2.4 Opening the Door to Excluded Evidence
- 3.1 The Statutory Reformation of the Traditional Dead Man’s Statute in Washington, D.C. and Virginia
- 7.3 Special Status Creditors
- 8.1 In General
- 8.2 Formalities of Will Substitutes
- 5.2.1 Limited Mandatory Rules Governing Partner Relations
- 9.1 Confidential Relation and the Burden of Proof
- 11.2 Joint Tenancy
- 4.3 Trusts for Children
- 10.7 Family Entities and Divorce
- 5. Conduct in Investing
- 2.3 The Support/Discretionary Trust Distinction in Maryland
- 2.2 Settlor Intent: Support/Discretionary Trusts
- 4. The “New” Uniform LLC Approach: Fiduciary Duty Restored
- 3.3.2 “Misinterpretation” Or “Abuse” of Discretion
- 3. The Duty of Prudence
- 3.3 Special Status Creditors
- 3.2 Theoretical Underpinning
- 9.1 In General
- 2.3.2 Passive Activity Loss Treatment
- 2.1 The Maryland Rule of Professional Conduct
- 9.3 The Restatement (Third) Approach
- 2.1 Natural Parents Are Guardians
- 2.2.1 Impact Upon Creation of the Trust
- 3.2 Reasonableness Standard
- 1.5.3 Power of Attorney v. Trust
- 4.2.3 Litigation/Dispute Considerations
- 3.3.1 Family Relationship
- 2.2 Under the Common Law, the Plain Meaning Rule Generally Excludes Extrinsic Evidence for Testamentary Trusts But Not for Inter Vivos Trusts
- 1. Introduction
- 1.4 The Maryland Uniform Estate Tax Apportionment Act
- 4.1 Introduction
- 1.5 The Common Law and the Codification of the Law of Trusts
- 1.6.2 The Impact of the Marketing on Responsible Planning
- 5.1 General Rule
- 4.2 Creditors and Limited Powers of Appointment
- 4. Kaouris – Jurisdiction to Construe Written Documents
- 9. Powers of a Personal Representative
- 2.5 The Impact of Exculpatory Clauses
- 11. Special Post-Mortem Issues
- 6.1 A Good Faith Standard within the Context of Broad Fiduciary Duty
- 1.1 Asset Protection With Tenancy By The Entireties
- 1.4 Fiduciary Standards and Trustee Identity
- 2.4 Cost of Suit
- 8.4 A “Transaction” for Purposes of the Statute
- 4.2 Forum Shopping
- 3.3.1 Settlor’s Intent
- 3.1 The Nature and Scope of the Trustee’s Duty: the Johnson Decision
- 1.1 Definition of Fiduciary Duties
- 2. Limited Jurisdiction – History
- 2.3.2 Exception to Plain Meaning for Surrounding Circumstances
- 5.1 The “Prudent Man Standard”
- 1.2 Concept of Fair Market Value
- 8. Timeliness
- 1.1.1 Fiduciary Relations in Various Settings
- 3.3.2 Constructive Notice of Fraud
- 2.1 The Common Law Rules of Construction and Settlor Intent
- 3.2 The Maryland Dead Man’s Statute
- 3.3 Badges of Fraud
- 2.3.1 In General, Section 645 Election
- 6.3 The Uniform Trust Code Permits Traditional Norms
- 1.6.1 Living Trusts are Heavily Marketed
- 9.2 Trustee Standards
- 7. Duty Not to Delegate
- 3.2.1 Final Regulations
- 4.3 Disclaimer of the Survivorship Interest
- I. Estate Planning
- 3.1 Introduction/ Basic Pattern
- 6. Maintaining Accurate Records
- 1.2.2 Economic Interest
- 10.6 Corporations
- 4.2 The Craft Aftermath
- 6.1 Rules of Construction and Settlor Intent
- 1.3 The IRS Has Attempted to Derail Family Limited Partnership Planning
- 7.2 Theoretical Underpinning
- 2.1 Attractive Attributes To Motivate Use
- 5.3 Maryland’s Version of the Prudent Investor Rule
- 3.4 Tortfeasor Access
- 2. State Variations
- 1.2.3 Revocable by the Grantor
- 7.5 Spendthrift Clauses and Trust Termination
- 2. The Duty of Loyalty
- 8.3 Credible Witnesses
- 2.7 Deductibility of Investment Advice
- 5.4 The Last Uniform Business Entity Act That Addressed This Issue
- 2. The Estate Planning Implications
- 4.2.2 Spousal Election
- 4.3 Eliminating the Categories under the UTC and Restatement (Third)
- 1.5.2 Durable Power of Attorney
- 5.1 Validity in General
- 9.5 The UTC/Restatement Controversy
- 4.6 Ascertainable Standards are Measurable
- 3.2.2 Examples of Strict Construction
- 2. Extrinsic Evidence and the Terms of the Trust, the Plain Meaning Rule
- 2.1 Equity Jurisdiction for Actions Against Trustees
- 5.2.2 Not Effective Substitutes for a Broad Fiduciary Duty
- 5.6 Other Spousal Property
- 3.1 Duty to Supply Copy of Trust Instrument
- 10.1 The Privilege and the Attorney for a Trust
- 1.1 The “Terms of the Trust”
- 4.1.1 The “Probate Fee”
- 3.2 The Nature and Scope of the Trustee’s Duty
- 3.3 The Nature and Form of the Accounting
- 8.2 Dead Man’s Statute is Strictly Construed
- 2.9 Extended Discretion and Court Enforcement of Distributions
- 11.3 Transfer of Death Accounts
- 4.1 A Close Look at Drye and Craft
- 6. Proceedings in Multiple Courts
- 5.1.1 The Fiduciary Obligation of Partners
- 6.5 Exception to Plain Meaning for Surrounding Circumstances
- 2.3 Remedies
- 8.3 Examples of Strict Construction
- 2.1.1 Trust Income is Taxable to the Grantor
- 5.2 Nature of the Tenancy
- 3. The Stripping Out of Fiduciary Duty
- 2.3.9 Charitable Set Asides
- 1.1.1 An Express Trust
- 1.3.1 Definition
- 1.3.2 Revocation of Joint Trusts
- 1.4.1 Referred to as “Living Trusts”
- 1.5.1 Definition
- 2.1.2 Filing Requirements
- 2.2.2 The Gift From the Trust Problem Solved
- 2.3.6 Separate Share/65-Day Rules
- 2.3.7 Throwback Rules
- 2.3.8 Personal Exemptions
- 2.3.10 Joint Tax Return
- 2.4.2 State Inheritance Tax
- 3.1.2 Death Before the Required Beginning Date
- 4.2.1 Time Considerations
- 4.2.4 Medicaid Considerations
- 4.2.5 Title Insurance
- 4.2.6 Maintaining Privacy
- 4.2.7 Planning for Disability
- 1.4.2 The Revised Uniform Partnership Act
- 5.1 No Size Fits All in Estate and Asset Protection Planning
- 4.1 Settlor Intent: Support/Discretionary Trusts
- 1.1 Trust Law in General
- 8.3 Creditors and General Testamentary Powers of Appointment
- 8.1 The Maryland “General” Power
- 2.2 Civil Conspiracy and Other Cases
- 2.6 Powers in the Instrument
- 2.3 The “Legal List” of Investments
- 1. Introduction
- 5.3 Weakness of a Good Faith/Bad Faith Analysis
- 2.4 Eliminating the Categories Under the UTC and Restatement (Third)
- 5.1 The Law of Partnership Folded into the Law of Contract
- 4.5 529 Plans
- 6.1 The Maryland View
- 3.1 Duty “To Act in Good Faith …”
- 4.2 Not Subject to a Qualified Disclaimer
- 4.4 Retaining the Categories Under the Maryland Trust Code Proposal
- 3.1 In General
- 3.1.3 “State of Mind Not Contemplated” Standard
- 7.4 Tortfeasor Access
- 4.1 General Comments
- 4.9 Extended Discretion and the Uniform Trust Code
- 4.1 Disclaimed Property
- 4.2 The Inherently Subjective Nature of Good Faith
- 1.1 The Use of Family Limited Partnerships in Estate Planning
- 6.2 The Plain Meaning Rule and Testamentary Trusts.
- 3.2 Accountings and Revocable Trusts
- 4.1.1 Law and Economics Practitioners View
- 5.5 Maryland Tenants by the Entirety Trusts
- 3. Tenants by the Entirety and Bankruptcy
- 5.4 The Theoretical Underpinnings of the New Rule
- 6.2 Offshore Trusts
- 3.2 Maryland Does Not Recognize De Facto Parent Status
- 11.3.2 Standby Trusts
- 5. Planning in Full Bar Jurisdictions: Post Judgment Transfers and/or Disclaimers in Full Bar Jurisdictions Appendix
- 2.4 Statutory Powers in General
- 3.1 Grandparent Visitation Right Statute
- 3. Limited Jurisdiction – Statutory Framework
- 1.3.2 Contract Standard of Good Faith Dealings
- 3.4 Disclaimer as Transfer
- 3.2.3 A “Transaction” for Purposes of the Statute
- 2.7 Ascertainable Standards are Measureable
- 4.4 IRAs; Insurance
- The Terms of the Trust: Extrinsic Evidence of Settlor Intent
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