Trusts 2: purpose trust Flashcards
What are the requirements for a charitable trust (general)?
- Must be for a charitable purpose
- defined heads or in same spirit - Satisfy a public benefit test
- identifiable public benefit
- benefits section of public - Be wholly and exclusively charitable
- can sever non charitable portion or it is incidental
What are the defined charitable purposes?
- prevention or relief of poverty
- advancement of education
- advancement of religion
- advancement of health or the saving of lives
- advancement of citizenship or community development
- advancement of the arts. Culture heritage or science
- advancement of amateur sport
- advancement of human rights, conflict resolution
- advancement of environmental protection or improvement
- relief of those in need because disadvantage
- advancement of animal welfare
- promotion of the efficiency, police, fire and rescue services or ambulance
Can a charitable purpose trust be made for a case outside of the defined list?
General purpose
- Recognises those that would have counted under previous law or purposes which are analogous to or within the spirit of statutory heads of charity
What is the public benefit test in charitable trusts?
- Identifiable public benefit?
- matter of fact (testators view not taken into account)
- charity commission may require evidence
- can weigh against detriment/harm - Must benefit public or section of public
- must not be negligible in number
- quality which distinguishes them from other members of the community must be a quality which does not depend on their relationship to a particular individual/company
Can focus on certain beneficiaries if:
- they have proper reasons for doing so
- the poor are not excluded from benefit
- more relaxed for relief from poverty even if associated with a person/company so long as beneficiaries are not named
- Cannot be for a political purpose
When might a charitable trust not fail for not being wholly or exclusively charitable?
Incidental
- If the non charitable part be construed as incidental or subsidiary to main, charitable purpose, the trust will remain effective
Separate
- If the charitable and non-charitable purpose can be separated, and a portion of the fund allocated to each
- Then court will sever the trust and recognise the charitable part
- Only possible when trust language contemplated severance of the fund (amount allocated to each must be quantifiable)
What are the rules against perpetuity for charitable trusts?
- Inalienability rule does not apply
- Can direct trustees of charity to invest captial and apply income for charitable purposes INDEFINATLY - Remoteness of Vesting
- Initial gift must vest within perpetuity period
- However, gift from one charity to another can take place at any time
(eg To X charity for so long as they do X-thing. If they cease to do X-thing to Y charity. )
When can court use Cy-Pres doctrine?
nitial Failure
- means property cannot be applied to the specific purpose form the beginning
- cy-pres only applied if the settlor has shown a general charitable intention
Subsequent failiure
- gift cannot go back on a resulting trust
- cy-prés applied
What is a Denley Trust
- trust that appears to be for private purpose will succeed if it is actually for benefit of ascertainable human beneficiary who may enforce trust
- although it does not confer a beneficial interest on identifiable individual they have power to enforce
Example
- for maintenance and use of football pitch for employees of company for as long as the law may allow and then with gift over of the land at end of period.
What are the causes a honorary trust can be for?
- Trust for the maintenance of particular animals
- Trust for erection and maintenance of monuments and graves
- Trusts for the sating of private masses
how are honorary trusts enforceable?
- Non charitable trusts are technically unenforceable
- If trustee is willing to act then court will grant a Pettingall order, securing the enforcement
What is the perpetuity rules for honorary trusts?
- Human life plus 21 years (or just 21 years)
Example
- Must be certain from the outset
- Ie. “maintain animal for x years” or “build/maintain memorial for X years”, “as long as the law may allow
