Charitable Trusts and Honorary Trusts

Question 1

Unique features of charitable trusts

Answer 1

(1) Not subject to the RAP
(2) Must be for a charitable PURPOSE
(3) Must be in favor of an INDEFINITE number of beneficiaries at large, and cannot benefit identifiable private individuals
(4) Enforcement of the terms of the trust rests with the attorney general of the state, or, if the settlor is alive, he or she may maintain a proceeding to enforce the charitable trust
(5) When stated charitable purpose can no longer be accomplished, it may be reformed, in a judicial proceeding, under the doctrine of cy pres

Question 2

What does “cy pres” mean?

Answer 2

Means “as near as possible,” and in this context, means as close as possible to settlor’s primary purpose

Question 3

In limited circumstances, the settlor’s heirs claim the property under a resulting trust if the charitable purpose can no longer be accomplished.

The resulting trust provision in a trust is valid only if:

Answer 3

(1) it is to go to the settlor and the settlor is still living; or
(2) it may go to the settlor’s heirs if fewer than 21 years have elapsed since the date of the trust’s creation

(otherwise, provision is invalid and the court may impose cy pres