Purpose Trusts

Question 1

What are the requirements of a charitable trust?

Answer 1

1. Purpose which is wholly and exclusively charitable
2. For the public benefit

Question 2

What does wholly and exclusively charitable mean?

Answer 2

• If there is a non-charitable purpose which is incidental or subsidiary to the main charitable purpose, the trust remains effective.
• Otherwise, if the non-charitable and charitable aspects of the trust can be separated, the court may sever and recognise the charitable part (trust must contemplate severance and amount quantifiable).
• If trust for benefit of poor, should not benefit the rich.

Question 3

What is public benefit?

Answer 3

• beneficiaries must not be negligible in number
• “benefit” is objective = fee paying school benefit of education did not outweigh harm of social immobility.
• Charities can charge for services / facilities if reasonable and necessary to achieve aim but must not restrict the benefit.
• Must not depend on relationship to certain individual (unless for poverty).
• Nunnery was too secluded to have public benefit.

Question 4

What is the cy-pres doctrine?

Answer 4

Where a charitable trust fails, surplus funds can be applied to another charitable purpose by way of a scheme established by the Court / Charity Commission if the trust contains a “general charitable intention” i.e ‘soup kitchen for parish” was interpreted as wide enough to have general charitable intention to benefit the sick and poor in the parish.

Question 5

What is a non-charitable purpose trust?

Answer 5

Trust without clear beneficiary but which subsists for life in being + 21 years and falls within an Endacott exception.

Question 6

Which purposes can a non-charitable purpose trust have?

Answer 6

1. Maintenance of pets
2. Erection and maintenance of monuments and graves
3. Saying of private masses

Question 7

When will non-charitable purpose trusts be enforceable?

Answer 7

• where the purpose is clear such that if trustee surrendered discretion, court could carry out the trust.
• Requires a willing trustee to carry it out and may obtain a Pettingall Order requiring trustee to give undertaking to comply + testator’s legatees can sue to enforce.
• purpose of “providing some useful memorial to myself” too unclear.