Charitable Trusts

Question 1

Charitable Trust

Answer 1

The purpose of a charitable trust is one that is considered to benefit the public. This can include disseminating the views of a particular political movement, benefiting the community, and also includes situations where matching funds are required. The controlling factor is the effect of the gift, not the motive of the donor, so if the effect is charitable and benefiting the public, that is sufficient.

Question 2

Cy Pres

Answer 2

Where the settlor had a general charitable intent, but the specified charitable use is no longer possible or practical (such as when the specific charity no longer exists), the court must decide whether the settlor intended the trust to fail or would have wished the property devoted to a similar use that is as near as possible to the original use.

Question 3

Failure of an Express Trust

Answer 3

When an express trust fails because the beneficiary is dead, equity creates a resulting trust in the settlor or, if the settlor is dead, the settlor’s estate, and the court then compels the resulting trustee to distribute the property to the settlor or the settlor’s estate.