Charitable trusts Flashcards
requirements for a charitable trust
charitable purpose
public benefit
sufficient section
exclusively charitable
what are the charitable purposes
poverty education religion health and saving lives citizenship and community development arts, culture, heritage and science amateur sport human rights, peace, equality and diversity, promotion of racial/religious harmony environment needy animals forces and emergency services analogous purposes with same spirit NOT POLITICS
what is a public benefit
pros outweigh cons
on balance it is a good thing for society
sufficient section general rule
no unreasonable restrictions on the opportunity to benefit from the purpose
can have selection process as long as it is open to all who could benefit from purpose
geographic restrictions not too narrow
sufficient section - poverty
unreasonable restrictions are allowed
sufficient section - education
no personal nexus allowed can give preference to a class but not absolute priority
what is a personal nexus
connected group - members of family, employees of particular employer etc.
exclusively charitable
non-charitable purposes can only be incidental to charitable purposes. must be by-product of main purpose.
what can a court do if there are some charitable and some non-charitable purposes
might be able to server it so there are two trusts
what is cy-pres
when a charitable trust fails so remaining funds are applied to charitable purposes similar to the original failed purpose
2 types of failures (cy-pres)
initial - purpose of gift fails before gift takes effect
subsequent - there is a failure in carrying out the purposes of the gift after the gift takes effect
cy-pre for initial failure
if there is a general charitable intention then apply cy-pres. if not then RT to S’s estate.
factors for and against finding a general charitable intention
against: terms of gift are specific, gift is to a corporation
for: rest of will is charitable, charity to benefit never existed, gift is to an unincorporated association
cy-pre for subsequent failure
cy-pres applies automatically
does cy-pres apply when a charity merges with another charity
no the gift is applied automatically. no need to use cy-pres as there is no failure. charity is just in a new format
what if a charity won’t accept a gift due to the restrictions on use set by the settlor
court can find a general charitable intention and remove the restrictions on use.
what does a political purpose include
trying to change laws or government policies of this or other countries
Three aspects of a charitable trust
Charitable purpose
Sufficient public benefit
Exclusively charitable
What does poverty mean
Not destitution just going short
Can a poverty trust name an individual (benefit sufficient section of the public)
No but could be a group eg my family
2 aspects of the public benefit test
The trust must have an identifiable benefit ( benefit must be clear and relate to the purpose of the charity) (benefit outweighs any detriments)
Benefit a sufficient section of the public (no arbitrary restrictions)
Can religion be a public benefit
Yes if it is open to all or members mix with citizens
Can education be limited by personal nexus
No
Otherwise won’t be sufficient public benefit
Can the poor be excluded from a charity
No
Can charge fees but must give more than minimal assistance to those who can’t afford them.
Can charitable institutions charge fees
Yeah but put profits back into charitable purpose
Cannot exclude the poor so give more than minimal assistance to help those who cannot afford fees
What does exclusively charitable mean
It cannot have both charitable and non charitable purposes
Can a charity have political purposes
No
But can engage in ancillary political activities if it helps them achieve their main purpose
What to do with the profits of a charity
Must be put back into trust and not paid to private individuals
What if there is a mix of charitable and non charitable purposes
It won’t get charitable status
