Charitable Trusts

Question 1

Main difference b/w charitable and private trusts

Answer 1

Charitable trusts do not need clearly ascertainable beneficiaries.

Question 2

Charitable purpose

Answer 2

Purpose of trust must be sufficient to be charitable
Relief of poverty, Advancement of science or art, advancement of religion, Promotion of health, Gov’t/ municipal purposes (parks and museums), Goals of the community.

vii. Court decides if something is charitable.
1. court will apply the generally accepted standard. would people in the community see it as charitable?
2. If religious purpose—courts look to whether it’s illegal or against public policy.
b. No special language necessary as long as OR’s intent is clear

c. Must be significantly altruistic in supplying benefits
i. Must be for a large enough group, e.g. can’t limit it to your family.
ii. But just because some family may be benefit does not keep the trust from being charitable. For ex. setting up a park for the city where your grandkids may play

Question 3

Cy pres doctrine

Answer 3

a. Issue—what if you can’t carry out trust as written.
i. Change in circumstances have made it impossible.

b. Most courts use cy pres – court can alter dispositve provisions to try to equitably approximate what the settlor would have done. Assuming court finds the OR had general charitable intent.
i. Court can look at extrinsic evidence to decide what substitute charity or purpose comports with OR’s intent

Question 4

Does rule against perpetuities apply

Answer 4

not for charitable, yes for normal.

Question 5

Who enforces them

Answer 5

AG of the state

Question 6

What if the purpose of a trust is mixed

Answer 6

If beneficiaries are both charitable and noncharitable, special rules for charitable trusts do not apply