Trusts: Charitable and non charitable purpose trusts Flashcards
Generally, are purpose trusts valid and why/not?
Generally purpose trusts are void because:
-they offfend the beneficiary principle
-lack of certainty
-offend rule against perpetuities
-capriciousness (no useful purpose)
What are 3 types of purpose trust that will be valid?
- charitable purpose trusts
- Quistclose trusts
- Non charitable purpose trusts (trusts of imperfect obligation and Re Denley trusts)
3 requirements for a purpose trust to be charitable under s3(1) charities act
- charitable purpose
- exclusively charitable
- public benefit
s3(1) charities act names…?
13 heads of charitable purpose
Heads of charitable purpose under s3(1) charities act 2011
- prevention or relief of poverty
2 The advancement of education
3 Advancement of religion
4 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 or reconciliation or the promotion of religious or racial harmony or equality and diversity
Advancement of environmental protection/improvement
Relief of those in need by reason of youth, age, ill- health, disability, financial hardship or other disadvantage
Advancement of animal welfare
Promotion of the efficiency of the armed forces of the Crown, or of the efficiency of the police, fire and rescue services or ambulance services
any other [charitable] purposes.
Elements of ‘Exclusively charitable’
- NO Political purpose
- Profits must be ploughed back into charity (can pay salaries ect NOT commercial venture)
What political purpose do/dont make a trust exclusively charitable?
NO:
Supporting a political party
Campaigning for a change in law/change in gov policy decisions
YES:
engage in political activities that are incidental to/means of achieving main charitable purpose as long as not main means of achieving purpose
What are the 2 aspects of public benefit (as one of the 3 conditions for a trust to be charitable)
- Benefit aspect (benefit must outweigh harm)
- Public aspect (must benefit sufficient section of public)
For what trusts will the public benefit test be satisfied so long as the purpose will accrue to a class of individuals
trust to prevent poverty
Sufficient public benefit: What is the Class within a class test?
the class off ppl who can benefit from a charitable purpose can be limited so long as limits are legitimate, proportionate, rational or justifiable given the nature of the charitable trust (ie. Geographical restrictions
Rules relating to personal nexus for the public aspect of public benefit aspect of charitable purpose trusts?
Must not be restricted to personal nexus.
1-numbers must not be numerically negligible
2-must not rely on personal connection like employment
UNLESS the charity is to relieve poverty.
If a charitable trust charges fees, can it still be charitable under the public aspect?
yes BUT cant jeopardise their ability to meet the public benefit by excluding those who cant pay, but may be other ways to benefit less wealthy.
What are the 2 types of non charitable purpose trusts
- Trusts of imperfect obligation
- Re Denley Trusts: Purposes which benefit an identifiable group of people
What are trusts of imperfect obligation and what is the requirement for them to be valid?
Where theres no one to enforce the trust but are the ONLY ‘concessions to human weakness’
Valid if end within 21y
Examples of the 2 recognised trusts of imperfect obligation
- care or maintenance of specific animals
- maintenance of graves and funeral monuments
