purpose trusts Flashcards
what are purpose trusts by definition?
trusts for a purpose rather than a human beneficiary
they are generally void because they do not have a beneficiary to enforce them
what have the courts decided?
that a very limited number of types of purpose trusts will be valid on the basis of imperfect obligation
what are valid purpose trusts imited to?
- erecting or maintaining monuments and graves - Re Hooper [1932]
- saying of mass in private - Re Hetherington [1990]
- upkeep of specific animals - Re Dean [1889]
- gifts to unincorporated associations or clubs
what is the rule for most trusts in terms of when it must vest (come to an end)?
they must vest within the perpetuity period which is 125 years
what is the rule for when a purpose trust must vest?
within 21 years
it is questioned whether it might last more than 21 years, if it is likely to then the trust won’t be valid
what are the problems with purpose trusts?
- if the court is required to order the trustees to distribute the trust property, they need to know to whom it should be distributed
- who would have locus standi to requires the court to order performance? there needs to be an identifiable human beneficiary
what is the difference between an incorporated and an unincorporated body?
incorporated body has its own legal personality and an unincorporated body does not
it can’t hold property and can’t receive gifts
what are gifts to unincorporated bodies at risk of?
being void as purpose trusts
what are the three possible interpretations considered in Leahy v AG for NSW [1959]?
- a gift to be held in trust for the purposes of the order - void unless the association is charitable
- trust for present and future members of the order - void due to perpetuity rules, it could go on for more than 21 years
- absolute gift for current members - they could all sever their independent shares and run off
