Purpose Trusts
| Author | Eileen E. Gillese, Martha Milczynski |
| Pages | 56-75 |
CHAP TER 4
PURPOSE TRUSTS
A. INT RODUCTION
The objects of an express tr ust may be persons or purposes. A tr ust for
persons sets out the indiv iduals, by name or class, who are to enjoy the
trust property. A trust for purposes, on the other hand, sets out a task
that the creator of the tr ust wishes the t rustee to perform t hrough use
of the trust propert y. It can be difficult to disti nguish trusts for persons
from those for purposes.
EXAMPLE: I leave $10,000 in trust for my children’s education. Is that a
trust for persons or for purpo ses?
The answer lies in the paramount intention of the settlor. If the para-
mount intention is to benefit the children, it is a tr ust for persons. If
the paramount intention is to provide education, then it is a trust for
purposes. In t he example given, the most likely construction would be
that the tru st was for persons (my children).
As we saw in chapter 3, tru sts for persons that satisfy the certa in-
ties requirements, and th at are duly constituted and comply with the
formalities requirement s, are valid and enforceable. In this chapter, we
will explore how to create va lid trusts for charitable and non-cha ritable
purposes.
Examples of charitable trusts abound: collection boxes, annual ap-
peals, and special events such as the “Ride for Cancer” are all charities,
whether charitable trusts or foundations. Non-charitable purpose trusts
are something different: these trusts are intended to provide for some-
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Purpose Trusts 57
thing, rather than someone, where that something has not been accorded
charit able status. Examples of non-char itable purp ose trusts include the
provision of a trophy for an annual club tournament, money to feed a
beloved animal, and prov ision of sports and recreation facilities.
As we will see in section B of this chapter, the rule s relating to the
creation of c harit ies have b een fashioned over a long per iod of time
and are relatively well defined. This h istory does not mean that the
rules are particularly sensible; in t his area of the law they are not, al-
though recent case law gives some basi s for optimism that the r ules are
changing, albeit slowly, to become more sensible. Rather, the fact that
charities h ave a long history means t hat a large body of case law h as
built up in the area and th at lawyers have a fairly clear sense of what is
permissible and what may be problematic.
On the other hand, non-cha ritable purpose trusts h ave gone in and
out of judicial fashion. It is only relatively recently that they have be-
come more acceptable in law; therefore, the law relating to non-ch ari-
table purpose tr usts is les s clear than t hat of charitie s. The primary
objection to non-charitable purpose trust s was well put in Mori ce v.
Bishop of Durh am,1 where it was categorically pronounced that the
chancery court s would not enforce non-charitable purpose t rusts be-
cause “There must be somebody, in whose favour the court can de-
cree performance.”2 This is known as t he “beneficiary pri nciple,” or
the “enforceability objection.” It is based on the fact that the essence
of a trust is th at a trustee is obliged to perform the trust. There can be
no obligation on a trustee to perform unless there is a correlative right
in someone else to enforce the obligation. And, since the beneficiar y
is a purpose and not an ind ividual, there is no one who can bring an
action to compel the trustee to per form. This objection does not apply
to charitable tr usts, since public officials are charged with the duty of
enforcing such trusts.
In section C of this chapter, we examine the modern trend toward s
validating non-charitable purpose trusts bot h at the common law and
through legislation. We note that even when there was a real relucta nce
in the courts to sanction non-charitable purpose trust s, they were per-
mitted in “exceptional case s,” such as trusts for the maintena nce of
graves, anim als, and monuments.
In section D we look briefly at the interrelationship between chari-
table and non-charitable purpose trusts, followed in section E by an
(Ch.) [Morice cited to Ves. Jun.].
2Ibid. at 405.
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