EXAM NOTES - Purpose Trusts

Question 1

general structure

Answer 1

1. charitable trust?
2. general rule: Morice v Bishop of Durham
3. Re Endacott exceptions
4. perpetuity rules
5. willing trustee?

Question 2

define a purpose trust

Answer 2

• A trust to carry out a non-charitable purpose rather than to benefit an individual or individuals

Question 3

what is the general rule about purpose trusts?

Answer 3

Morice v Bishop of Durham

• Non-charitable purpose trusts are void for offending the beneficiary principle
• Also often fail due to perpetuity or uncertainty reasons

Question 4

what is the exception to the general rule about purpose trusts

Answer 4

Re Endacott
o Erection and maintenance of monuments and graves Mussett v Bingle
o Saying of private masses Bourne v Keane – public masses are charitable Re Hetherington
o Maintenance of particular animals Pettingall v Pettingall; Re Dean
o Miscellaneous Re Thomson

Question 5

what is the limitation to the Endacott exemptions?

Answer 5

Re Thompson – these exemptions are valid but unenforceable; trustees cannot be made to carry them out

Question 6

show how certainty is still needed for purpose trusts

Answer 6

e.g. which animal in question; Pettinghall v Pettinghall “my favourite black mare” - clear enough?

Question 7

How do perpetuity rules affect Re Endacott?

Answer 7

• Rule against inalienability – property can only be tied up for non-charitable purposes for the duration of a life + 21 years
• Only way to make a valid Re Endacott trust is for the creator to include a perpetuity period – either by linking to a life in being + 21 years or stating “so long as the trustees can legally do so” Re Hooper – this = 21 years
• Re Kelly: an animal’s life cannot be a “life in being” so a valid period should be stated

Question 8

explain the general rules about erecting monuments

Answer 8

• Unlikely to be charitable unless it is of someone of national importance and may then be covered by the Charities Act 2006 if for ‘public benefit’
• Otherwise is an Endacott exemption Mussett v Bingle; Re Hooper
  o But a “memorial” could be too uncertain to count as an Endacott monument

Question 9

how do perpetuity periods affect the erection of monuments?

Answer 9

• If nothing about maintenance then no perpetuity problem; just paying for construction and we can assume that will happen within 21 years Mussett v Bingle
• Maintenance of anything that is part of/attached to a church is counted as charitable Re Hooper; if something’s of benefit to a whole church, it will also charitable Re Douglas
• Maintenance of anything else requires a perpetuity period
• If part of a gift works and part fails, you can sever if there are two separate funds of money but otherwise all fails and must return to the estate