EXAM NOTES - Purpose Trusts Flashcards
general structure
- charitable trust?
- general rule: Morice v Bishop of Durham
- Re Endacott exceptions
- perpetuity rules
- willing trustee?
define a purpose trust
- A trust to carry out a non-charitable purpose rather than to benefit an individual or individuals
what is the general rule about purpose trusts?
Morice v Bishop of Durham
- Non-charitable purpose trusts are void for offending the beneficiary principle
- Also often fail due to perpetuity or uncertainty reasons
what is the exception to the general rule about purpose trusts
Re Endacott
o Erection and maintenance of monuments and graves Mussett v Bingle
o Saying of private masses Bourne v Keane – public masses are charitable Re Hetherington
o Maintenance of particular animals Pettingall v Pettingall; Re Dean
o Miscellaneous Re Thomson
what is the limitation to the Endacott exemptions?
Re Thompson – these exemptions are valid but unenforceable; trustees cannot be made to carry them out
show how certainty is still needed for purpose trusts
e.g. which animal in question; Pettinghall v Pettinghall “my favourite black mare” - clear enough?
How do perpetuity rules affect Re Endacott?
- Rule against inalienability – property can only be tied up for non-charitable purposes for the duration of a life + 21 years
- Only way to make a valid Re Endacott trust is for the creator to include a perpetuity period – either by linking to a life in being + 21 years or stating “so long as the trustees can legally do so” Re Hooper – this = 21 years
- Re Kelly: an animal’s life cannot be a “life in being” so a valid period should be stated
explain the general rules about erecting monuments
- Unlikely to be charitable unless it is of someone of national importance and may then be covered by the Charities Act 2006 if for ‘public benefit’
- Otherwise is an Endacott exemption Mussett v Bingle; Re Hooper
o But a “memorial” could be too uncertain to count as an Endacott monument
how do perpetuity periods affect the erection of monuments?
- If nothing about maintenance then no perpetuity problem; just paying for construction and we can assume that will happen within 21 years Mussett v Bingle
- Maintenance of anything that is part of/attached to a church is counted as charitable Re Hooper; if something’s of benefit to a whole church, it will also charitable Re Douglas
- Maintenance of anything else requires a perpetuity period
- If part of a gift works and part fails, you can sever if there are two separate funds of money but otherwise all fails and must return to the estate