Implied and Charitable Trusts

Question 1

Two kinds of implied trusts

Answer 1

(1) constructive trust
(2) resulting trust

Question 2

Constructive trust

Answer 2

A constructive trust is an equitable remedy whereby a trust is erected on the holder of specific property to redress wrongdoing or prevent unjust enrichment

Question 3

Resulting trust

Answer 3

Arises when an express trust makes an incomplete disposition of assets or fails after property has been conveyed to the trustee

Question 4

Equitable title in resulting trust

Answer 4

Settlor is left holding the equitable interest in an equitable reversion (also known as a resulting trust)

Question 5

Distinguishing characteristics of charitable trusts

Answer 5

(1) Cannot have ascertainable beneficiaries (unless they are qualified charitable organizations)

(2) RAP does NOT apply

(3) When the trust purpose has been accomplished or has become impracticable or impossible to accomplish, the trust doesn’t necessarily end → cy pres doctrine
allows the trust to continue with a similar charitable purpose

Question 6

Key requirement of charitable trust

Answer 6

Must have a charitable purpose, like: Relief of poverty, advancement of education or religion, promotion of health, performance of governmental and municipal purposes, or other purposes beneficial to the community

Question 7

Beneficiary requirement for charitable trusts

Answer 7

Beneficiaries must be indefinite

Question 8

Cy pres doctrine

Answer 8

If exact charitable purpose cannot be met, court may direct the application of the trust property to another charitable purpose that approximates the settlor’s intentions

Question 9

Cy pres doctrine prerequisites

Answer 9

Cy pres may be applied where:

(1) Settlor’s specific charitable purpose becomes impossible, impracticable, or illegal to carry out, AND
(2) Settlor had, in addition to this specific charitable purpose, a general charitable intent