Charitable Purpose Trusts and Non-charitable Trusts

Question 1

Define a charitable purpose trust.

Answer 1

Three Requirements:
1) The purpose of the trust must be charitable in nature
2) The purpose must be exclusively charitable;
3) The purpose of the trust must be for the public benefit.

Question 2

A trust fund is held on trust for a woman for life, with the remainder for the settlor’s nephews. Explain how the interests of the woman and the nephews are classified.

Answer 2

The mother has a possessory right to income generated by the trust. the remainder beneficiaries (nephews) have vested rights (ie are entitled) to the trust capital, but cannot claim this capital until the life tenant’s death (ie the mother).