Non-charitable purpose trusts

Question 1

Outline the beneficiary principle

Answer 1

A trust must have an identifiable beneficiary

It cannot be for a private purpose because a purpose cannot enforce the trust.

Without a beneficiary, trustee duties and obligations become meaningless

Re Astor’s Settlement Trusts (1952)

Question 2

Outline the rule against remoteness of vesting

Answer 2

The rule that the equitable interest must vest within the perpetuity period

Beneficiaries should all be able to come together and bring the trust to an end according to Saunders v Vautier

Perpetuities and Accumulations Act 2009: within 125 years

Possible to create the trust and then wait and see if it will vest within the perpetuity period

Question 3

Outline the rule against inalienability

Answer 3

This only concerns the anomalous exceptions

The trust property must not be tied up in the trust indefinitely or beyond the 21 year perpetuity period, i.e. the common law perpetuity period

Not possible to wait and see: it must be known from the outset whether the interest will vest within the perpetuity period

Question 4

What are the anomalous exceptions to the beneficiary principle

Answer 4

Trusts of imperfect obligations:
Purpose to care for specific animals
- Pettingall v Pettingall (1842)

Purpose of the maintenance of tombs and monuments
- Re Hooper (1932)

Purpose of holding private masses
- Bourne v Keane (1919)

Question 5

Outline the relevance of Re Denley’s Trust Deed (1969) for the beneficiary principle

Answer 5

When a private trust for individuals is expressed in the form of a purpose

Involved a trust for the provision of recreational grounds for the benefit of employees.

Held: employees were an identifiable class of beneficiaries that could enforce the trust; therefore, didn’t fall foul of the beneficiary principle

Question 6

What is an unincorporated association and why is it interesting

Answer 6

A group of people but not a legal person because they haven’t been incorporated as a company. English law doesn’t like the idea of property interests not being held by a person though

Question 7

Outline an absolute gift to present members as joint tenants

Answer 7

Unincorp associations

• no rule against perpetuity because it’s outright
• the least complicated way of making a donation
• all members own in personal capacity

e.g £1000 made to WfWIW and there are 10 members: each member gets £100 in their personal capacity

Question 8

Outline an absolute gift to the present members subject to their constitution

Answer 8

Unincorp associations

• contract holding interpretation; the preferred one
• constitution sets outs members’ rights and liabilities; members accept donation according to the constitution
• not personal capacity, rather property is added to association’s funds/assets
• property must be used according to constitution
• if a member leaves, they give up their right to the property; if a new member joins, they gain a right to it
• only valid when it is possible for the association to come to an end; be dissolved
• Re Grant’s Will Trusts: gift will fail if not possible for club to dissolve

e.g. £1000 to WfWIW according to their constitution, so part of their funds and used for the club’s purposes

Question 9

Explain Re Grant’s Will Trusts (1979)

Answer 9

Gift to Chertsey and Walton Constituency Labour Party failed because this local party was subject national party rules: wasn’t possible to make the decision to dissolve

• absolute gift subject to constitution
• there must not be a rule that prevents the association from dissolving

Question 10

Outline a gift on trust for present and future members

Answer 10

Tricky because could trap the asset and offend the rule against remoteness of vesting
- e.g. current employees can’t bring the trust to an end for future employees

Question 11

Outline a gift on trust for the present members only

Answer 11

No perpetuity problem - the asset wouldn’t be trapped

Question 12

Explain Re Lipinski’s Will Trust (1976)

Answer 12

The court will choose practicality over principle sometimes: pragmatism has its place

Question 13

Outline the dissolution of an unincorporated association

Answer 13

Present members only, all of age = club can be brought to an end because there are no future members

If donator is identifiable, becomes a resulting trust. Donator not id’able = reverts to Crown

A broad sword approach is taken to make the dissolution work: funds are distributed to reflect how members initially held property according to the constitution