4. Charitable and Non-Charitable Purpose Trusts

Question 1

What are purpose trusts?

Answer 1

Trusts created for a specific purpose rather than for individual beneficiaries.

Question 2

What are the requirements for a charitable purpose trust?

Answer 2

Must last 125 years, have a charitable purpose, provide public benefit, and not benefit specific animals.

Question 3

What is the public benefit test for charitable purpose trusts?

Answer 3

The trust must have clear identifiable benefits that accrue to the public or a sufficiently large section of the public.

Question 4

What are the restrictions for group trusts that relieve property?

Answer 4

Cannot benefit named individuals, only generalizations of small groups like ‘my family’.

Question 5

What are the restrictions for group trusts related to religion?

Answer 5

Cannot be for ‘secluded’ religions with no contact to the outside world.

Question 6

What are the restrictions for group trusts related to education?

Answer 6

Must not be numerically negligible and must pass the ‘personal nexus’ and ‘class within a class’ tests.

Question 7

What is the ‘personal nexus’ test for education-related group trusts?

Answer 7

The trust must not only benefit family and colleagues.

Question 8

What is the ‘class within a class’ test for education-related group trusts?

Answer 8

The trust must not have arbitrary restrictions or requirements.

Question 9

What is the restriction for excluding the poor in charitable purpose trusts?

Answer 9

The trust cannot exclude the poor.

Question 10

What are the restrictions for a purpose trust to be exclusively charitable?

Answer 10

It cannot be political (unless ancillary to charity), profit from the charity, or have non-charitable purposes.

Question 11

What are the requirements for a non-charitable purpose trust?

Answer 11

It must have a perpetuity clause stating it will end in 21 years or the trustees may spend all the trust capital to end it.

Question 12

What is the ‘Re Denley’ exception to the beneficiary principle?

Answer 12

The purpose of the trust must be clear and tangible, and the beneficiaries must be ascertainable and abide by perpetuity.

Question 13

What are imperfect obligations in purpose trusts?

Answer 13

They are trusts with no human beneficiaries, valid but not enforceable, such as caring for an animal.