Charitable and honorary trusts

Question 1

Charitable trust

Answer 1

1. created by
   i. manifestation of intent (transfer in trust, declaration in trust, or testamentary trust)
   ii. need a present interest in transferrable property
2. different from private trusts:
   i. may have indefinite beneficiaries
   ii. may be perpetual
   iii. cy pres doctrine
3. the trust purpose must benefit the public
   i. class benefitted may be limited, but not so narrow as to benefit a few individuals the settlor wishes to aid personally
   ii. poverty relief, promoting health education, religion, gov’t purposes (ex. museums), etc.
4. the ultimate beneficiaries must be indefinite
   i. but the beneficiary can be a specified charitable entity
5. standing to enforce the trust
   i. common law: only the state attorney general has standing to enforce the trust
   ii. UTC: settlor and qualified beneficiaries have standing to enforce the trust

Question 2

Charitable trusts - rule of perpetuities and cy pres doctrine

Answer 2

6. rule of perpetuities does not apply to charitable trusts
7. cy pres doctrine (“as near as possible”) applies to charitable trusts
   ii. where there is a general charitable intent and the charitable purpose selected by the settlor is impracticable/ impossible, the court will select an alternative as close as possible to effectuate settlor’s intent (instead of a residuary trust)

iii. a general charitable intent is established both by intrinsic and extrinsic evidence
a. cy pres cannot be used if there is a specific charitable intent (ex. a charitable trust to specifically help NYU Medical School, which no longer exists)

iv. cy pres may be applied both to outright charitable gifts and charitable trusts
v. only the court can invoke cy pres, not the trustee (who can petition the court)

Question 3

Honorary Trust

Answer 3

1. trust with no ascertainable beneficiary and that confers no substantial benefit upon society
   i. a trust with a goal
   ii. trustee is on their honor to carry out the goals of the trust
   iii. often established for pets or maintenance of burial places, or trusts to further an activity (ex. fox hunting)
2. trustee must be willing to perform their duties, otherwise a resulting trust is imposed (reverts back to settlor)
   i. cf. a private or charitable trust can never fail bc of trustee refuses to serve
3. rule of perpetuities
   i. in some states RAP
   ii. in other states, the trust is valid for 21 years, and after a resultant trust applies
   a. UTC, and UPC

Question 4

Totten Trusts

Answer 4

1. aka. tentative bank account trust
2. a Totten account is it is not a trust, it is a will substitute
   i. a named beneficiary takes whatever is left in the account after depositor’s death
   ii. depositor/trustee owns the account during his life, and owes the named beneficiary no fiduciary duties
3. can be elevated into a private express trust by manifesting intent

Question 5

Pour over will

Answer 5

1. inter vivos trust devising part or all of the estate to the trustee of the trust
2. valid because: incorporation by reference, and independent significance, and UTC