Trusts - Charitable Trusts Flashcards
Charitable and Honorary Trusts
1) No clearly ascertainable beneficiaries needed
2) Goal is to benefit community or society
What is a “charitable purpose”?
1) For relief of poverty
2) For education, science, or art
3) Religion
4) Health
5) Gov or municipal
6) Other goals benefitting the community
Debates arise as to whether something is selfish or altruistic enough to be charitable.
No special language is needed. It can be very vague (“to benefit the poor”). It’s better to be more specific.
Even if you set up a trust for “my children’s education and medical care” that’s not charitable. But if you provide for a museum in your community that your family members happen to like, that’s still charitable.
Cy Pres Doctrine
Cy pres = “as near as possible”. Requires GENERAL CHARITABLE INTENT.
This is brought into play when you do not carry out a charitable trust exactly as written. If you don’t carry it out exactly as written, does it fail? Or do we adjust the charitable purpose to carry out the settlor’s intent?
Cy pres is a doctrine of equitable approximation to preserve a charitable trust that looks like it might fail. Gotta find settlor had a broader charitable intent than the purpose that can no longer be carried out.
Ex: there’s a charitable trust for polio vaccines. But then polio is eradicated. So charities will come in and argue that they have an equivalent purpose. Like people arguing for covid. Other charities will argue wait we treat childhood leukemia or maybe childhood cerebral palsy (another muscular disease like polio) or another country’s charity saying polio still exists in our country. The court has to sort through all that.
Does the RAP apply to charitable trusts?
NOPE. Infinite duration.
Who is in charge of enforcing charitable trusts?
The attorney general of each state.
