Non Charitable Trusts Are Purpose Trusts Charitable?

Essay by mountie31University, Bachelor'sA, September 2002

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Non-Charitable trusts are a quandary in English law. A Testator can leave property or money to a human being in the normal trust sense, and can donate to a charitable organisation. However he cannot if he chooses, donate money for the upkeep of a family pet. Other world jurisdictions such as the Cayman Islands, Bermuda and closer to home, Jersey and Isle of Man allow this, but UK law doe not.

The concept of a trust was created and developed by equity. Many of the ideals developed by equity are now embodied by statute, an example being the Trustee Act 1925. The trust was first created to fill in the gaps so to speak. From that the trust grew and therefore as retained its adaptability, and its ability to evolve and cope with modern problems. Also the modern trust evolved from the Latin "ad opus" which was developed as a response of equity to the inadequacies of common law.

A purpose trust is generally distinguished from a private trust in that it has a purpose rather than beneficiaries. There are two main types of purpose trust: charitable and non-charitable. Trusts with a purely charitable purpose have long been recognised under English law.

For a number of reasons non-charitable purpose trusts cannot be readily created under English law. It is an appropriate point of departure to briefly consider these, as the enactments which provide for the formation of statutory purpose trusts, were developed because of the history of non recognition of non-charitable purpose trusts under English trust law.

The beneficiary is an essential part of the trust process. The beneficiary has both rights against the trustee and proprietary rights in the trust fund. An important point to note here, is that the rights of beneficiaries in express trusts see...