Purpose Trusts

Question 1

Types of non-charitable purpose trusts and requirements

Answer 1

Trust for:
- care of SPECIFIC animal; or
- maintenance of existing grave

Provided capital can all be spent within 21 years or stated to last 21 years

Question 2

When will a purpose trust a valid charitable purpose trust

Answer 2

Charitable Purpose
Public Benefit
Wholly and Exclusively Charitable

Question 3

What is the public benefit test

Answer 3

Benefit: Purpose must be beneficial (any detriment must not outweight benefit)

Public: Must benefit a sufficient number of people. Any restriction must be legitimate, proportionate, rational and justifiable (e.g. youth, age, poverty, disability).
- NOT personal nexus (family or employee) unless for advancement of poverty
- NOT named beneficiary
- NOT class within a class

Question 4

Wholly and exlcusively charitable rule

Answer 4

Purpose must be wholly and exlcusively charitable + profits must be re-invested for charitable purpose.

NOT
- promoting trade
- political (seeks to change law / gov policy / promote views of a political party)