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Non Charitable Trusts Are Purpose Trusts Charitable?

1585 words - 7 pages

Non-Charitable trusts are a quandary in English law. A Testator can leave property or money to a human being in the normal trust sense, and can donate to a charitable organisation. However he cannot if he chooses, donate money for the upkeep of a family pet. Other world jurisdictions such as the Cayman Islands, Bermuda and closer to home, Jersey and Isle of Man allow this, but UK law doe not.The concept of a trust was created and developed by equity. Many of the ideals developed by equity are now embodied by statute, an example being the Trustee Act 1925. The trust was first created to fill in the gaps so to speak. From that the trust grew and therefore as retained its adaptability, and its ...view middle of the document...

In order to be valid, a trust must have an ascertainable beneficiary in whose favour performance of the trust may be decreed. (Morice V Bishop of Durham (1804)). A trust is obligatory and there cannot be an obligation unless there is a corresponding right in somebody to enforce it. On this principle, trusts for purposes or objects are invalid, for a purpose or object cannot sue. As stated in Morice :"There can be no trust over the exercise of which this court will not assume a control: for an uncontrollable power of disposition would be ownership and not trust. If there can be a clear trust but for uncertain objects, the property, that is the subject of the trust, is undisposed of and the benefit of such trust must result to those to whom the law gives the ownership in default of disposition by the former owner. But this doctrine does not hold good with respect to trusts for charity. Every other trust must have a definite object. There must be somebody in whose favour the Court can decree performance.."The above quote points out the basic important area of the trust, as unless there is a beneficiary for whose benefit some property is held on trust for them, there cannot be a valid binding trust. This is due to the certainty of objects rule of express trusts. This means that the rules requiring that the identity of the beneficiaries must be made adequately clear by the settlor. However the beneficiary principle is slightly different. As far as certainty of objects goes, the ensurity of the identity of the beneficiaries would be certain so that trustees could know for what purposes the trustees were holding the property on trust for. This was the case in Re Denley which will be discussed below.In the case of a private trust, there is no such difficulty and in the case of charitable trusts, the Attorney General is charged with the duty of enforcement. Notwithstanding the clarity of the general rule, the English courts have managed over time to create uncertainty whether non-charitable purpose trusts can or cannot validly exist under English law, by from time to time holding that certain non-charitable purpose trusts were valid, such as trusts for the erection or maintenance of monuments or graves and trusts for the maintenance of particular animals.Viscount Simond's put it succinctly in this way in the case of Leahy v A-G for New South Wales (1959):"A gift can be made to persons (including a corporation) but it cannot be made to a purpose or to an object: so also a trust may be created for the benefit of persons as cestuis que trust but not for a purpose or object unless the purpose or object be charitable. For a purpose or object cannot sue, but, if it be charitable, the Attorney General can sue and enforce it."A more liberal approach to the beneficiary principle has been given in some cases, such as Re Denley (1969) and Re Lipinski (1976). In Re Denley, trustees for sale were directed to maintain land as a sports ground "primarily for the benefit...

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