TrustsWillsPurpose Trusts

15 November 2019by Chris Rattigan-Smith0

It is a well-established rule of trust law that English trusts must have a beneficiary to enforce the trust and hold the trustees to their obligations and as such most trusts for a purpose are invalid. This is known as the beneficiary principle. However, there are a number of exceptions to this rule and there are a small number of purpose trusts that can exist. This week’s article will cover what purpose trusts can exist.

Charitable Purpose Trusts

Charitable purpose trusts are the main exception to the beneficiary principal. A trust for an exclusively charitable purposes is valid.

A charitable trust could be for general charitable purposes for example ‘for such charities or charitable purposes as my trustees see fit’ or alternatively for specific charitable purposes.

A trust cannot mix charitable purposes and other purposes, for example a trust for ‘charitable and benevolent purposes’ will not be valid as the trustees could benefit non-charitable benevolent purposes.

Charitable trusts can exist in perpetuity and do not need to be limited to 125 years to be valid.

Non-Charitable Purpose Trusts

As a general rule non-charitable purpose trusts will fail as there are no beneficiaries to enforce the trust however there are some notable exceptions to this rule. These are known as trusts of imperfect obligation. Courts will allow these trusts as long as the gift can fall into a residuary gift if the trust is not carried out as this allows the residuary beneficiaries to enforce the trust if the trustees are not completing their obligations.

These trusts of imperfect obligation cannot last any longer than 21 years. The usual perpetuity period of 125 years does not apply to these trusts.

1. Trust for a Specific Animal

A trust for the benefit of animals in general is charitable but it is not charitable if it is just to benefit certain specific animals. Trusts for the benefit of specific animals are however an exception to the beneficiary principle.

These trusts would be suitable for common household pets as they would be unlikely to live longer than the 21-year limit. For more exotic long-lived pets however, these trusts would not be suitable for them.

2. Trust for a Grave

A trust for the erection, upkeep or maintenance of a specific grave, tomb or other monument is valid. This could be for the testator’s own grave or for any other person’s grave.

Chris Rattigan-Smith

Please note that we are only insured to provide advice to our partners. If you require any advice we would recommend contacting the Society of Will Writers on [email protected] or 01522 687888 who will be able to put you in contact with a will writer local to you.

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