In this Article, Professors Henry Hansmann and Ugo Mattei analyze the functions served by the law of trusts and ask, first, whether the basic tools of contract and agency law could fulfill the same functions and, second, whether trust law provides benefits that are not provided by the law of corporations. The authors’ analysis is motivated in part by the increasing interest in the trust, a familiar feature of common-law jurisdictions, in a number of civil law countries, and in part by the important role that trusts, for example pension and mutual finds, have come to play in capital markets. The authors conclude that the important contribution of trust law lies not in its well-recognized role of ordering, via default rules of contract, the relationships among parties to the trust; rather, the principal benefit of trust law lies in its ordering of relationships between these parties and third parties with whom they deal, relationships that cannot be rearranged easily by contract. Particularly, trust law allows the parties to the trust to partition off a discrete set of assets for separate treatment in relationships formed with creditors. The essential role of the trust, therefore, is to perform a property law-like, rather than a contract law-like, function. Moreover, the trust provides flexibility in organizational structure unavailable under even the more liberal business corporation statutes. The authors close by noting the convergence of trust and corporate law and questioning whether the roles performed by the two organizational types could just as well be served by a single legal form.