Charitable and Honorary Trusts

Question 1

General rules of charitable trusts

Answer 1

The rules are basically the same as the rules for private trusts, except for three distinctions:
1. charitable trust must have indefinite beneficiaries
2. charitable trust may be perpetual
3. the cy pres doctrine applies
4. not bound by the RAP

Question 2

What counts as a charitable purpose?

Answer 2

1. relief of poverty
2. advancement of education, science, or art
3. advancement of religion
4. promotion of health
5. accomplishment of government purposes

Question 3

Does a charitable trust require special language

Answer 3

the charitable purpose may be expressed in very general terms; a charitable trust will be implied when the charitable purpose is clear.

Question 4

What is the meaning of “indefinite beneficiaries”?

Answer 4

A charitable trust must benefit the public generally or an indefinite class of members of the public

Question 5

Cy pres

Answer 5

When a charitable purpose selected by the settlor is accomplished or becomes impracticable, the court may select an alternative under the doctrine of cy pres, which means as near as possible.

The court must find a general charitable intent* on the part of the settlor and ascertain their primary purpose.

*if a specific intent alone is found, the trust fails and passes as a resulting trust to the settlor’s successors in title.

Question 6

Who enforces a charitable trust?

Answer 6

The state attorney general

Question 7

Honorary trust

(a.k.a. purpose trust)

Answer 7

Trust that is not for a charitable purpose and has no private beneficiaries. Honorary trusts are commonly established for the beneficiary of pets or for the maintenance of burial places.

Because there is no human beneficiary to enforce the trust, the trustee is “on their honor” to carry out the trust’s terms.

Courts uphold honorary trusts as long as the named trustee is willing to perform their duties; failing this, a resulting trust is imposed.

Subject to RAP