Charitable and Honorary Trusts

Question 1

What are the three rules that apply only to charitable trusts and never to private trusts?

Answer 1

1. charitable trust must have indefinite beneficiaries;
2. it may be perpetual;
3. and the cy pres doctrine applies.

Question 2

What does it mean that a trust must have a charitable purpose?

Answer 2

It must have a purpose that is considered to benefit the public. This includes relief of poverty, the advancement of education or religion, promotion of health, and the accomplishment of government purposes such as museums and parks. 
The class can be limited, but not so limited as to benefit a few people whom the settlor wishes to aid personally.

Question 3

What does it mean that the beneficiaries for charitable trust must be indefinite?

Answer 3

The court can select a charitable purpose or beneficiary if none is specified in the trust instrument, so long as the selection is consistent with the settlor’s ascertainable intention.

Question 4

What can sue to enforce a charitable trust?

Answer 4

1. Settlor;
2. Qualified beneficiary;
3. State’s attorney general.

Question 5

What is the doctrine of ‘cy pres’?

Answer 5

When a charitable purpose selected by the settlor is impracticable, unlawful, impossible to achieve, or wasteful, the court may select an alternative under the doctrine of cy pres, which means as nearly as possible. The court will ascertain the settlor’s primary purpose

Question 6

What are honorary trusts?

Answer 6

Commonly established for the benefit of pets or for the maintenance of burial places. Because there is no human beneficiary to enforce an honor trust, the trustee is on her honor to carry out its terms. However, under the UTC, the trust is enforceable by someone named in the trust instrument or appointed by the court.