Charitable and Honorary Trusts

Question 1

What are the distinctive characteristics of a charitable trust?

Answer 1

(1) Must have charitable purpose
(2) Must not benefit identifiable individuals
(3) May be perpetual
(4) Cy pres doctrine applies

Question 2

What is required by a “charitable purpose”

Answer 2

Must have a purpose that benefits the community
* Class to be benefited may be limited but may not be so narrow as to benefit only a few individuals whom the settlor wishes to aid personally

Question 3

Who may sue to enforce a charitable trust?

Answer 3

Settlor, qualified beneficiary, or Attorney General

Question 4

What does “Cy Pres” mean and how is it used?

Answer 4

“As near as possible”
* When a charitable purpose selected by the settlor is unlawful, impracticable, impossible to achieve, or wasteful, court will select an alternative under doctrine by ascertaining the settlor’s primary purpose

Question 5

What is an honorary trust and by whom is it enforceable?

Answer 5

• Commonly established for benefit of pets or maintenence of burial places
• Enforceable by someone named in the trust instrument or appointed by the court
• Trust principal may be applied only to carry out terms of trust, but excess principal is distributed to settlor or successors unles instrument provides otherwise