Purpose trusts: Non-charitable trusts

Question 1

What are the Endacott exceptions?

Answer 1

In order to be valid, the purpose of a non-charitable purpose trust must fall within a
recognised exception to the beneficiary principle.

Only when a trust is created in a will and were classified in the case of Re Endacott:

1. Trusts for the maintenance of particular animals
2. Trusts for the erection and maintenance of monuments and graves
3. Trusts for the saying of private masses

Question 2

Trusts for the maintenance of particular animals?

Answer 2

A trust for the welfare of animals generally would be charitable.

PS! Trusts for the maintenance of particular animals have been upheld as valid (provided they comply with certainty and perpetuity requirements)

Question 3

Trusts for the erection and maintenance of monuments and graves?

Answer 3

A trust for the purpose of constructing or maintaining a monument could be charitable if it is of cultural or historical importance.

PS! Trusts for the erection and maintenance of monuments and graves have been upheld as valid (provided they comply with certainty and perpetuity requirements). i.e family grave.

Question 4

Trusts for the saying of private masses?

Answer 4

May be charitable if it passes the public benefit test.

PS! Trusts for the saying of private masses have been upheld as valid (provided they comply with certainty and perpetuity requirements).

Question 5

Why are non-charitable trusts sometimes called imperfect obligations?

Answer 5

Non-charitable purpose trusts falling within an Endacott exception = imperfect obligation; the court recognises their validity (meaning they will not fail if included in a will) but they are not enforceable.

Question 6

What is a Pettingall order?

Answer 6

if the trustee is willing to carry out the terms of the an imperfect obligation trust, the court will make a Pettingall order; requires the trustee to give an undertaking to comply with the trust

If they do not, the testator’s residuary legatees (who would otherwise receive the
property) can sue to enforce the undertaking and prevent a misapplication of the fund.

Question 7

What is the perpetuity rule for non-charitable purpose trusts?

Answer 7

Non-charitable purpose trusts are subject to more restrictive perpetuity rules (limiting the duration of the trust) than other trusts.
They should be drafted with an express perpetuity clause to ensure it does not fail for
want of perpetuity.