Purpose trusts Flashcards
Definition
Trusts for a purpose they don’t have any beneficiaries to take the share of the trust.
The beneficiary principle
Generally trusts are only valid if they have beneficiaries. However there are exceptions:
1) The charitable exception
2) Trusts of imperfection obligation
3) Denley trusts
The charitable exception - Definition
3 requirements:
1) Must have a charitable purpose
2) Must have a sufficient public benefit
3) Must be exclusively charitable
Rule against inalienability does not apply
The charitable exception - Charitable purposes
1) Prevention of relief or poverty
2) Advancement of education
3) Advancement of religion
4) Advancement of health or the saving of lives
5) Advancement of citizenship or community development
6) Advancement of the arts, culture, heritage or science
7) Advancement of amateur sport
8) Advancement of environmental protection
9) Animal welfare
The charitable exception - Public benefit - Benefit aspect
Must be beneficial and any detriment/harm must not outweigh the benefit.
The charitable exception - Public benefit - Public aspect - Definition
The purposes must be of benefit to the public in general or to a sufficient section of the public.
The charitable exception - Public benefit - Public aspect - Geographical restrictions
Only acceptable if they are related to the aims of the charity. However if they’re further restricted then it’s not acceptable
The charitable exception - Public benefit - Public aspect - Personal nexus
The benefit must not be restricted to those who have a personal nexus such as familial relationships to given individuals or employment by a common employer
The charitable exception - Exclusively charitable
The trust must be exclusively charitable if the stated purposes of the trust include anything which is not charitable then the whole trust may be regarded as non-charitable. Political purposes are non-charitable
Trusts of imperfect obligation - Care/maintenance of animals
Trusts for the care or maintenance of specific animals are valid. E.g ‘£30,000 to my trustees to hold on trust to look after my dog Fido’
Trusts of imperfect obligation - Maintenance of graves
Trusts for the maintenance of graves and sepulchral monuments are valid. E.g ‘£20,000 to my trustees to hold on trust to maintain the Hampton family grave’
Trusts of imperfect obligations - What they need to satisfy
Certainty of object and rules against inalienability
Denley trusts - Definition
If someone has a direct or indirect benefit from the purpose to enable them to enforce the trust
Denley trusts - conditions
1) Is there a group of identifiable people who will benefit from the purpose?
2) Is the benefit tangible?
3) Are the purpose and the group of people described with certainty?
4) Does it comply with the rule against inalienability of capital?
Denley trusts - Certainty of objects test
Postulant test. The number of people to benefit must not be so large that the trust would be administratively unworkable
