Charitable and Honorary Trusts

Question 1

Charitable Trusts

Answer 1

A charitable trust is formed in the same way as private trusts but must have a charitable purpose and indefinite beneficiaries, it may be perpetual, and the cy pres doctrine applies.

Question 2

Cy Pres

Answer 2

If a charitable purpose is impracticable, unlawful, or wasteful, the court may select an alternative that gets as near as possible to the settlor’s primary purpose. Traditionally, the court had to determine that the settlor had a general charitable intent (rather than to one specific charity only); under the UTC general intent is presumed.

Question 3

Honorary Trusts

Answer 3

An honorary trust is not for a charitable purpose and has no private beneficiaries. They are most commonly established for benefit of pets. Under common law, the trustee was on his honor to carry out the terms (i.e., the trust couldn’t be enforced); under the UTC the trust is enforceable by someone named in the instrument or appointed. If not for the care of animals, will typically void after 21 years.