SECOND CONCEPT: CHARITABLE TRUSTS

Question 1

What is a charitable trust under the Statute of Elizabeth?

Answer 1

Trusts for education, alleviation of poverty, alleviation of sickness, to help orphans.

Question 2

What is a charitable trust under the Restatement?

Answer 2

Any trust which confers a substantial benefit upon society.

Question 3

Examples of charitable trusts include trusts to who?

Answer 3

1. help the poor
2. advance education
3. help the sick
4. promote religion

Question 4

What is needed to create a charitable trust during a settlor’s lifetime?

Answer 4

1. A manifestation of trust intent
2. by declaration of trust or by transfer in trust
3. of a presently existing interest in property that can be transferred
   4 . for a legal charitable purpose

Question 5

What is needed to create a charitable trust after a settlor’s death?

Answer 5

1. A manifestation of trust intent
2. at testator’s death by will
3. of a presently existing interest in property that can be transferred
   4 . a for a legal charitable purpose

Question 6

Settlor creates a trust to alleviate poverty among his poor relatives. Is this a charitable trust or a private express trust?

Answer 6

There is a split of authority.
One view: it is a private express trust because: only a few people are getting a benefit
Other view: it is a charitable trust because: whenever poverty is eliminated, society benefits.

Question 7

Why doe we care if the trust is a private express trust or a charitable trust?

Answer 7

Because of the Rule Against Perpetuities and Cy Pres.

Question 8

Does the rule against perpetuities apply to charitable trusts?

Answer 8

No

Question 9

What happens if a charitable trust is impossible to carry out? What are the 2 alternate solutions?

Answer 9

1. A resulting trust: the corpus is returned to settlor if alive, and if not, to settlor’s estate
2. Cy pres: if the court finds that settlor had a general charitable intent and only the mechanism
   for effectuating that intent is not possible or practicable (a free hospital), the court can modify the mechanism, cy pres, as nearly as possible, to effectuate settlor’s general intent.

Question 10

How does the court know if the intent was general enough to use CyPres?

Answer 10

introduce both intrinsic evidence (the trust instrument) and extrinsic evidence to ascertain the settler’s intent.

Question 11

If settlor has a specific charatable intent can Cy Pres be used?

Answer 11

No, the trust will go back to the settlor or his estate

Question 12

Settlor creates a charitable trust for Syracuse University Medical School, a valid charitable trust, years later after the settlor’s death, the medical school closes. Syracuse University wants to use the trust for their health science school. Can they under cy pres?
Here is the evidence available: [i] Settlor graduated from Syracuse University Medical School; [ii] taught there; [iii] was a dean there; and [iv] settlor gave much money to Syracuse University Medical School during his lifetime and seldom gave any money to any other charity during his lifetime

Answer 12

No, on these facts the court would not envoke Cy Pres. The resulting trust would go back to the settlor’s estate.

Question 13

Who invokes Cy Pres

Answer 13

Only the court has Cy Pres power.