Purpose Trusts

Question 1

Non- charitable purpose trusts

Answer 1

A trust for a purpose is void unless the purpose is charitable.

Question 2

Trusts for the erection or maintenance of tombs/monuments

Answer 2

Trusts set up for the upkeep of a religious building and its grounds are considered charitable. However to erect/ maintain anywhere else is considered a private purpose. If the purpose is to erect a tomb/ monument, there is no need to include a perpetuity period. A purpose to maintain the tomb/ monument is only valid if expressly limited in perpetuity.

Question 3

Trusts for the saying of masses

Answer 3

If the mass is open to the public it is considered charitable but if the mass is private it becomes a private purpose trust. Such trusts must be expressly limited in perpetuity.

Question 4

Trusts for the maintenance of pets

Answer 4

Trusts for this purpose must be expressly limited in perpetuity. However the courts have stepped in to save trusts not limited by taking judicial notice of the fact the pet will not live beyond the perpetuity period (may not be suitable for pets that are notoriously long lived like tortoises)

Question 5

Re Denley’s trust

Answer 5

A purpose trust is valid if:
- It is directly or indirectly for the benefit of an individual or individuals, provided the individuals are ascertainable;
- The trust is limited in perpetuity.

Question 6

Charitable Trusts

Answer 6

Must have a charitable purpose and be for the public benefit.

Question 7

Charitable purposes

Answer 7

• The prevention or relief of poverty (inc preventing persons who are not poor from becoming poor) ;
• The advancement of education (inc scholarships, school equipment and maintenance of educational buildings or grounds);
• The advancement of religion (including religious buildings);
• The advancement of health or saving lives;
• The advancement of citizenship or community development
• The advancement of arts, culture, heritage, or science;
• The advancement of amateur sports
• The advancement of human rights;
• The relief of those in need because of youth, age, disability, ill health, disability, financial disadvantage or other disadvantage;
• The advancement of animal welfare;
• The promotion of efficiency of the armed forces, police, fire and rescue services or ambulance;
• Any other purposes including recreational trusts or purposes recognised as being similar to another charitable purpose.

Question 8

Public Benefit

Answer 8

Must benefit either the general public or sufficient section of the public and the class of beneficiaries must not be connected by a personal nexus.
The benefit must be identifiable or tangible and any detriment that results from the purpose must not outweigh the benefit.

Question 9

Differences between non-charitable and charitable purpose trusts

Answer 9

Charitable trustees can act by majority whereas trustees must act unanimously.
Charitable trusts are enforced by the Attorney General.
Charitable trusts can continue indefinitely whereas non-charitable must be expressly limited by perpetuity.
On the failure of a charitable trust, the trust assets can be saved by applying the cypres doctrine (court can establish a scheme for the applicator of a trust property for other charitable purposes as near possible to those intended by the donor) whereas for non-charitable the trust assets revert back to the settlor on resulting trust.