Because of its lack of the RAP, no income tax, and favorable trust planning statutes, South Dakota has offered trustors
a tantalizing combination of benefits.
In contrast, in Locke's scenario, the people themselves as trustors
create government and the resulting fiduciary relationships as a trust.
When entrepreneurs serve as trustors
or trustees, they also expose themselves to vulnerability and risk.
In this view, 'trust' -- which signals a vulnerabilit y of trustor
to the actions of the other, the trustee -- and 'power' -- which attempts to control the actions of the other -- are both alternative social mechanisms for resolving problems of order and organization.
Our working definition of trust is drawn from the recent review by Mayer, Davis, and Schoorman (1995: 712): "The willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor
, irrespective of the ability to monitor or control that other party." Several aspects of the definition of trust require elaboration.
First, an irrevocable trust may be modified for any reason with the consent of the trustor
and all of the beneficiaries.
If it is true that the risk of trust can be reduced by strong and coherent institutional arrangements which make it easier for a potential trustor
to actually decide for trust to be the dominant co-ordination mechanism within a relationship, the reverse conclusion seems to be unavoidable: If the institutional order of a business system is patchy or cannot be deemed very reliable, potential trustors
are more inclined to use power (given that they have access to corresponding resources) as the primary co-ordination mechanism within their trans-organizational relations, because, in these circumstances, they will often find it easier to bear the risk of open conflict than the risk of misplaced trust.
Risking trust can be very attractive for potential trustors
in so far as they can hope to get returns on their investment, but in the case of a high risk to get no return at all or even lose a considerable amount of money, time or whatsoever, Coleman's social actors refrain from investing trust.
Therefore, by using moral justification, trustees induce trustors
to believe that their actions are aligned with their high moral values.
Because partners will achieve a greater profit if they behave in a trustworthy way, and the trustors
will also thereby achieve a greater profit, this means that partners have no motivation to behave in an untrustworthy way.
An approximate trend emerged in the correlation of age regarding TV trust: the percentage of trustors
increased from 39.1% in the below-19 group to 68.3% in above-60 group ([chi square] (1, 5) = 23.137, p < .001) (Figure 4).
and beneficiaries desiring a balance among the competing interests of removing property from the transfer tax system and the free alienability of property have turned to modern trust laws to achieve their goals.