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KembaraXtra – Legal Terms – Purpose Trust
A purpose trust is a trust that exists for a purpose rather than for the benefit of identifiable human beneficiaries. It is sometimes called a non-charitable purpose trust or a trust of imperfect obligation. Under ordinary trust principles, trusts generally require human beneficiaries who can enforce the trust against the trustees. Purpose trusts usually fail because they do not satisfy this beneficiary principle. As a result, non-charitable purpose trusts are generally regarded as invalid under English law.
The beneficiary principle is an important rule in trust law. It requires that there must be a person or group of persons capable of enforcing the trust in court. If no beneficiary exists, the court may find it impossible to supervise or enforce the trust effectively. Purpose trusts therefore create difficulties because the trust is directed toward an objective rather than a person. Courts are usually reluctant to recognize such arrangements. This reflects the traditional structure of English trust law.
Despite the general rule, the courts recognize a few limited exceptions. Trusts for the care of specific animals have been upheld, as in Re Dean. Trusts for the maintenance of tombs and monuments have also been accepted in some cases. In addition, trusts for the saying of masses have occasionally been recognized as valid. These exceptions developed historically and are treated narrowly by the courts.
The courts have made it clear that the recognized categories of purpose trust will not easily be expanded. In Re Endacott, the court emphasized that such exceptions are anomalous and should not be extended further. This means that new forms of non-charitable purpose trusts are unlikely to be recognized. The law therefore continues to prioritize trusts benefiting identifiable persons or charitable purposes. The restrictive approach preserves certainty within trust law.
Valid purpose trusts are also subject to the rule against perpetuities. This rule prevents property from being tied up indefinitely without proper ownership or control. A purpose trust must therefore operate within the legally permitted time limits. If the trust lasts too long, it may become void. The law thus balances limited recognition of purpose trusts with broader principles ensuring the free circulation and proper management of property.
A purpose trust is a trust that exists for a purpose rather than for the benefit of identifiable human beneficiaries. It is sometimes called a non-charitable purpose trust or a trust of imperfect obligation. Under ordinary trust principles, trusts generally require human beneficiaries who can enforce the trust against the trustees. Purpose trusts usually fail because they do not satisfy this beneficiary principle. As a result, non-charitable purpose trusts are generally regarded as invalid under English law.
The beneficiary principle is an important rule in trust law. It requires that there must be a person or group of persons capable of enforcing the trust in court. If no beneficiary exists, the court may find it impossible to supervise or enforce the trust effectively. Purpose trusts therefore create difficulties because the trust is directed toward an objective rather than a person. Courts are usually reluctant to recognize such arrangements. This reflects the traditional structure of English trust law.
Despite the general rule, the courts recognize a few limited exceptions. Trusts for the care of specific animals have been upheld, as in Re Dean. Trusts for the maintenance of tombs and monuments have also been accepted in some cases. In addition, trusts for the saying of masses have occasionally been recognized as valid. These exceptions developed historically and are treated narrowly by the courts.
The courts have made it clear that the recognized categories of purpose trust will not easily be expanded. In Re Endacott, the court emphasized that such exceptions are anomalous and should not be extended further. This means that new forms of non-charitable purpose trusts are unlikely to be recognized. The law therefore continues to prioritize trusts benefiting identifiable persons or charitable purposes. The restrictive approach preserves certainty within trust law.
Valid purpose trusts are also subject to the rule against perpetuities. This rule prevents property from being tied up indefinitely without proper ownership or control. A purpose trust must therefore operate within the legally permitted time limits. If the trust lasts too long, it may become void. The law thus balances limited recognition of purpose trusts with broader principles ensuring the free circulation and proper management of property.
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