Charitable Trusts

Two Prong Test for Charitable Trusts

1. Intent by the settlor that the trust be charitable in nature 2. Is the trust objectively charitable?

Presumption of Charitable Purpose

A charitable trust carries the presumption of a charitable purpose

TTC Charitable Purpose

A charitable trust means 1. a charitable entity 2. a trust that the stated purpose of which is to benefit a charitable entity 3. an inter vivos or testamentary gift to a charitable entity A charitable entity means 1. corporation 2. trust 3. community chest 4. fund 5. foundation 6. other entity Organized for 1. scientific 2. educational 3. philanthropic 4. environmental 5. social welfare 6. arts 7. humanities 8. other civic or public purpose

Do charitable trusts need ascertainable beneficiaries?

NO - only a charitable purpose

Does the language of the trust need to be specific for it to be charitable?

No - it can be very broad

Right of reverter

Regaining ownership of the property if a specific condition or event occurs

Enforcement of Charitable Trust

The attorney general, not the trustor, has standing to enforce a charitable trust A settlor or someone standing in the settlor's place only has standing to bring suit if there is a provision for reversion for the settlor/heirs

Administrative Deviation

The court may modify the administrative or dispositive terms of a trust if because of circumstances not anticipated by the settlor, modification or termination will further the purposes of the trust To the extent practicable, the modification must be made in accordance with the settlor's probable intention The court may modify the administrative terms of a trust if continuation of the trust on its existing terms would be impracticable or wasteful or impair the trust's administration

How are charitable trusts different from private trusts?

The settlor of a charitable trust creates the trust for a charitable purpose, rather than for the benefit of a private person

Cy Pres

When the purposes of a charitable trust become illegal, impossible, impracticable or wasteful, cy pres can be applied to implement another charitable purpose that comes as a near as possible to the settlor's original charitable intent