purposive trusts

Question 1

what are the 2 exceptions to the rule that every trust must have a beneficiary?

Answer 1

1. Charitable purpose trusts
2. non-charitable purpose trusts (valid in endacott exceptions)

Question 2

what are the requirements for charitable purpose trusts? (there are 3)

Answer 2

be for a charitable purpose
satisfy a public benefit test
be wholly or exclusively charitable

Question 3

what is the rule against remoteness of vesting for charitable trusts?

Answer 3

property held on a charitable trust must vest in the charity within that period

Question 4

what is the rule against inalienability for non-charitable purpose trusts?

Answer 4

assets cannot be tied up on trust for longer than the common law perpetuity period of a life in being plus 21 years

Question 5

what did Re Astor’s settlement trust case say about non-charitable purpose trusts on certainty of the intended purposes of the trust?

Answer 5

the purposes must be defined that if the trustees surrender their discretion, the court could carry out the purposes declared

Question 6

what is the effect of a non-charitable purpose trust having an uncertain purpose?

Answer 6

the trust is likely to be void if it is insufficiently certain

Question 7

if a trust is a mixture of charitable and non-charitable purposes - what is the result?

Answer 7

basic rule: trust will be void unless non-charitable purpose falls within recognised category of non-charitable purpose trust. (property returns to settlor on resulting trust)

if non-charitable purposes can be construed as ‘incidental or subsidiary’ to main charitable purpose then trust remains effective

if charitable and non-charitable can be separated then a portion of fund allocated to each, court severs the trust and recognises the charitable part.

Question 8

is there a presumption of public benefit for a charitable purpose trust?

Answer 8

no, there is no presumption of public benefit
(charity trustees must have regard to any guidance published by charity commission in pursuance of its public benefit objective)

Question 9

what are the 2 elements to the public benefit requirement for charitable purpose trusts?

Answer 9

1. whether there is an identifiable benefit; and
2. what constitutes the public, or a section of the public

Question 10

how is it assessed if there is an identifiable benefit (when looking at the public benefit requirement for charitable purpose trusts? (does it matter if settlor has belief)

Answer 10

question of fact as to whether there is a benefit to the public having regard to all evidence in particular case (settlor’s belief as to benefit is not relevant).

Question 11

what does it mean for ‘public of section of the public’ for a requirement of public benefit for charitable purpose trusts?

Answer 11

purpose must be beneficial to public or section of the public (not private class of individuals)

Question 12

to satisfy the test of ‘public or section of the public’ what two things need to be proved/considered?

Answer 12

(i) the possible beneficiaries must not be negligible in number; and
(ii) the quality which distinguishes them from other members of the community must be a quality which doesnt depend on their relationship to a particular individual

Question 13

can charities charge and make a profit for their services?

Answer 13

yes they can as long as this is provided as reasonable and necessary to carry out the charity’s aims

Question 14

can a charity pursue political objectives?

Answer 14

no they cannot, purpose should be for public benefit and therefore, politically neutral

Question 15

what is the effect of the requirement that class of beneficiaries must not be defined by reference to heir relationship with a single person for charitable trusts with the purpose of ‘prevention or relief of property’?

Answer 15

this is relaxed, however purpose still needs to benefit people of a particular description of being poor, as opposed to the benefit of particular poor persons

Question 16

can private fee paying schools be under the purpose of ‘advancement of education’ for charitable purpose trusts?

Answer 16

yes, they can because their benefit of providing education outweighs the social mobility implications of the accessibility to pay fees

Question 17

what is the effect of the presumption of public benefit on ‘advancement of religion’ charitable purpose trusts?

Answer 17

there is no presumption of public benefit, and public benefit must be proven in each case

Question 18

what is the cy-pres doctrine?

Answer 18

where a private trust fails there is usually a resulting trust to the settlor

Question 19

what happens to charitable purpose trusts in relation to the cy-pres doctrine?

Answer 19

where charitable purpose trust fails any surplus funds will be applied to another charitable purpose by way of a scheme established by the charity commission or court.

Question 20

what happens if there is an initial failure (property cannot be applied to the specific purpose from the beginning) how does cy-pres work then?

Answer 20

cy-pres is only applied if the settlor has shown a general charitable intention

Question 21

does a charitable trust have the presumption that it is for the public benefit?

Answer 21

no it doesn’t

Question 22

what are the endacott exceptions for a non-charitable purpose trust to be valid? (fall within a recognised exception to the beneficiary principle)

Answer 22

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

Question 23

what is the meaning of a trust of imperfect obligation?

Answer 23

another way of saying non-charitable purpose trusts falling within an Endacott exception

Question 24

what is a pettingall order? (relates to trustees being willing to carry out terms of the trust)

Answer 24

requires the trustee to give an undertaking to comply with the trust.

Question 25

why does a non-charitable purpose trust for ‘the rest of my dog’s life’ fail?

Answer 25

because it cannot be said with certainty that the animal will definitely die (and therefore, the trust come to an end) within the perpetuity period

Question 26

when does the 21 year perpetuity period start to run for non-charitable purpose trusts>

Answer 26

starts to run when the trust comes into effect eg, on the date of the testator’s death