Purpose Trusts Flashcards
Beneficiary principle
There must be somebody in whose favour the court can decree performance (Morice v Bishop of Durham)
Common law perpetuity rule
Cannot continue for longer than the life of an identified person or persons in being plus 21 years, if no person, then 21 years
Trusts of imperfect obligation
- Trust for the care and maintenance of specific animals
- Trust to erect and maintain monuments and graves
- Trust for the saying of private masses
Re Hooper 1932
Trust for the care and upkeep of family graves and monuments, valid only for 21 years, after that surplus passes to residue
Bourne v Keane 1919
Trusts for the saying of private masses must still satisfy the perpetuity rule
Re Endacott 1960
The categories of trusts of imperfect obligation are closed;
Also beneficiary principle approved
Re Denley 1969
F: Money raised “to be maintained and used for the purpose of a recreation or sports ground primarily for the benefit of employees and secondarily for the benefit of such other persons as the trustees may allow to use the same”
I: Is the trust valid?
H: Yes, as passes Broadway Cottages certainty test, passes perpetuities as specified as 21 years from death of the last survivor of a group of named individuals, the purpose was to provide a sports ground for the employees - they were not beneficiaries, but they were enough to ensure the protective role of the beneficiaries to oversee the trustees
Re Astor 1952
Beneficiary principle
What did Lord Goff do to beneficiary principle in Re Denley?
He didn’t overrule it, but rather confined it to its purpose - since here the trust was directly or indirectly for the benefit of an individual or individuals
What to do where the purpose is merely expressed as a motive for a gift/trust or to explain a gift/trust?
Solve it by removing limitation or use it to quantify sum
Re Sanderson’s Trust 1857
F: Property left on trust to pay or apply the whole or any part of towards maintenance, attendance and comfort of the testator’s brother, brother then died
I: Was it a gift if whole to the brother (so goes to his estate) or gift of limited sum to him
H: Not a purpose trust, purpose words merely to calculate beneficial share - it’s a trust for a person, not a purpose trust
Re Andrew’s Trust 1905
F: Fund for the education of the children of Bishop Barclay
I: How much were the children entitled to?
H: Purpose not exhausted merely because children had attained ages where education in the vulgar sense was no longer necessary, children were entitled to what remained in equal shares
Purpose trusts with the purpose as motive - the difference between beneficiaries who are alive and beneficiaries who are dead
Re Osoba, 1979
If dead, then resulting trust
But if alive, the major purpose of providing help and benefit can still be carried out
Re Osoba 1979
F: Bequest to testator’s widow on trust for the maintenance and training of daughter up to uni grade and for the maintenance of mother, widow and mother died, daughter had been to university
I: Was she entitled to the surplus?
H: Interpreted as a trust for the granddaughter
Re Bowes 1896
F: Trust for E for life remainder plus gift of £5000 to trustees for planting trees for shelter on the estate
I: How this should be interpreted?
H: Trust was ultimately for the benefit of E and his successors, with the purpose of benefitting the estate, so surplus money once trees planted went to E and his successors
