Purpose trusts MCQs Flashcards
A client wishes to leave their art collection on trust for the enjoyment of the public.
Which of the following is the best advice to the client?
The client’s objective can be achieved by way of a charitable purpose trust provided that the art collection can be considered to be of educational value.
The client’s objective can be achieved by way of a charitable trust provided that the art collection is of merit, which may require expert evidence.
The client’s objective can be achieved by way of a non-charitable purpose trust provided that it complies with perpetuity requirements.
The client’s objective can be achieved by way of a non-charitable purpose trust provided that the art collection is clearly defined.
The client’s objective cannot be achieved as the intended purpose is not charitable, nor would it constitute a recognised non-charitable purpose trust.
The client’s objective can be achieved by way of a charitable trust provided that the art collection is of merit, which may require expert evidence.
The purpose can fall with the advancement of the arts. Charity Commission guidance provides that art must be of merit, which may require expert evidence to establish.
An organisation wishes to set up a trust fund for the purpose of promoting human rights in relation to an armed conflict abroad. The aims of the fund include raising awareness of human rights abuses, providing relief for the victims and campaigning to change the law in the country concerned in respect of legal representation for human rights activists.
Which of the following is the best advice in relation to the validity of the trust?
The trust is likely to be upheld as a valid charitable trust in respect of the purposes of raising awareness of human rights abuses and providing relief to victims.
The trust is unlikely to be a valid charitable trust because it relates to overseas activities.
The trust is unlikely to be upheld as a valid charitable trust because the purposes do not fall within a recognised charitable purpose.
The trust is unlikely to be a valid charitable trust as it is not wholly and exclusively charitable.
The trust is likely to be a valid charitable trust for the purpose of the advancement of human rights.
The trust is unlikely to be a valid charitable trust as it is not wholly and exclusively charitable.
It is unlikely that the purpose of changing the law in a foreign country would be considered charitable as it would likely not meet the public benefit requirement. The purposes would therefore not be wholly and exclusively charitable.
A will contains the following provision:
“My trustees shall hold £100,000 on trust to apply the income for the provision and maintenance of football pitches for amateur football clubs in Stratford, East London.”
Which of the following is the best advice on the validity of the trust?
It is likely to be invalid for lack of public benefit
It is likely to be valid as a non-charitable purpose trust.
It is likely to be invalid because the purpose is not charitable
It is likely to be invalid for perpetuity
It is likely to be a valid charitable trust
It is likely to be a valid charitable trust
Amateur sport is a charitable purpose under the Charities Act 2011, and the Charity Commissioners’ guidance and case law shows that limitation to a large locality can still satisfy public benefit. A charitable trust can be perpetual. It is likely to be charitable. If it isn’t, it would not be valid under any of the non-charitable purpose trust exceptions. The other options are therefore incorrect.
A will includes a draft clause providing that £5,000 shall be left on trust for the purpose of caring for the testator’s dog after the testator’s death. The clause includes sufficient detail to meet the certainty requirement.
Which statement is the best advice to the testator?
The clause should be amended to limit the duration of the trust to the dog’s lifetime.
The trust is unlikely to be valid because the purpose does not fall within a recognised exception to the beneficiary principle.
The trust is likely to be valid as drafted.
Whether the trust is valid depends on the age and likely lifespan of the dog.
The clause should be amended to include an express perpetuity period of no more than 21 years (or as extended by a human life in being).
The clause should be amended to include an express perpetuity period of no more than 21 years (or as extended by a human life in being).
Maintenance of a particular animal is an exception to the beneficiary principle but to be valid the trust must also comply with perpetuity rules.
A client wishes to set up a trust for the purpose of operating a food bank to provide food to people in the local area.
Which of the following is the best advice to the client?
The trust is unlikely to be upheld as a valid charitable trust because it is limited to a restricted geographical area.
The trust is likely to be upheld as a valid charitable trust for the purpose of the relief of poverty.
The trust is unlikely to be upheld as a valid charitable trust because there is no perpetuity period.
The trust is unlikely to be upheld as a valid charitable trust because it is not explicitly for poor people
The trust is likely to be upheld as a valid charitable trust because there is a presumption of public benefit in relation to activities which relieve poverty.
The trust is likely to be upheld as a valid charitable trust for the purpose of the relief of poverty.
POVERTY CAN BE INFERRED!!!
