What are the requirements of a charitable trust?
- Purpose which is wholly and exclusively charitable
- For the public benefit
What does wholly and exclusively charitable mean?
- If there is a non-charitable purpose which is incidental or subsidiary to the main charitable purpose, the trust remains effective.
- Otherwise, if the non-charitable and charitable aspects of the trust can be separated, the court may sever and recognise the charitable part (trust must contemplate severance and amount quantifiable).
- If trust for benefit of poor, should not benefit the rich.
What is public benefit?
- beneficiaries must not be negligible in number
- “benefit” is objective = fee paying school benefit of education did not outweigh harm of social immobility.
- Charities can charge for services / facilities if reasonable and necessary to achieve aim but must not restrict the benefit.
- Must not depend on relationship to certain individual (unless for poverty).
- Nunnery was too secluded to have public benefit.
What is the cy-pres doctrine?
Where a charitable trust fails, surplus funds can be applied to another charitable purpose by way of a scheme established by the Court / Charity Commission if the trust contains a “general charitable intention” i.e ‘soup kitchen for parish” was interpreted as wide enough to have general charitable intention to benefit the sick and poor in the parish.
What is a non-charitable purpose trust?
Trust without clear beneficiary but which subsists for life in being + 21 years and falls within an Endacott exception.
Which purposes can a non-charitable purpose trust have?
- Maintenance of pets
- Erection and maintenance of monuments and graves
- Saying of private masses
When will non-charitable purpose trusts be enforceable?
- where the purpose is clear such that if trustee surrendered discretion, court could carry out the trust.
- Requires a willing trustee to carry it out and may obtain a Pettingall Order requiring trustee to give undertaking to comply + testator’s legatees can sue to enforce.
- purpose of “providing some useful memorial to myself” too unclear.
