The Rule Against Trusts for Private Purposes
1. How do we know its not a charitable purpose trust?
Charitable = any purpose that is beneficial to the community and on which, if funds
were available, it would not be improper to expend public money.
Flexible category with a shifting content.
“Public Benefit Test”:
Is it wide enough to count as “public”?
2. The rule against trusts for private purposes:
Private purpose trusts = void.
Effect = immediate resulting trust.
Re Endacott –
The testator left his residuary estate to the North Tawton Parish Council “for
the purpose of providing some useful memorial to myself.”
CA held that the gift failed as a private purpose trust and the rights went on
trust to the estate.
Lord Evershed MR:
“No principle perhaps has greater sanction or authority behind it than
the general proposition that a trust by English law, not being a
charitable trust, in order to be effective, must have ascertained or
ascertainable beneficiaries.”
3. Rationale for the rule:
Morice v Bishop of Durham –
Testatrix left rights to the Bishop of Durham on trust for “such objects of
benevolence and liberality as the Bishop in his own discretion should most
approve of.”
Objection = the trust did not have a “definite object”.
Known as the ‘beneficiary principle’.
A private trust must have beneficiaries, identified with sufficient
certainty to allow the trustees to do their job.
In the absence of anyone with an interest in the execution of the trust,
the trustees could do just as they pleased.
Re Astor’s Settlement Trusts –
Settlement to hold the shares of a company on trust for purpose of, inter alia,
the maintenance of good understanding, sympathy and cooperation between
nations, and the preservation of the independence and integrity of
newspapers.
Objection = the identified purposes were considered to be too uncertain.
The trustees could not do their duty unless the purposes were defined
with sufficient certainty.
4. Exceptions to the rule:
a. Deeply Rooted Anomalies:
Trusts for the maintenance of particular animals:
Re Dean – trust for maintenance of testator’s horses and hounds.
Trusts for erection and maintenance of monuments or graves:
Re Hooper
BUT – Re Endacott
Although the CA refused to overrule these judgements, it held that
they were not to be extended, not even to closely analogous
situations.
b. Execution of the purpose to the benefit of identifiable persons:
Goff J in Re Denley’s Will Trusts –
A company conveyed title to land to trustees to hold for a period
determined by lives “for the purpose of a recreation or sports ground
1. How do we know its not a charitable purpose trust?
Charitable = any purpose that is beneficial to the community and on which, if funds
were available, it would not be improper to expend public money.
Flexible category with a shifting content.
“Public Benefit Test”:
Is it wide enough to count as “public”?
2. The rule against trusts for private purposes:
Private purpose trusts = void.
Effect = immediate resulting trust.
Re Endacott –
The testator left his residuary estate to the North Tawton Parish Council “for
the purpose of providing some useful memorial to myself.”
CA held that the gift failed as a private purpose trust and the rights went on
trust to the estate.
Lord Evershed MR:
“No principle perhaps has greater sanction or authority behind it than
the general proposition that a trust by English law, not being a
charitable trust, in order to be effective, must have ascertained or
ascertainable beneficiaries.”
3. Rationale for the rule:
Morice v Bishop of Durham –
Testatrix left rights to the Bishop of Durham on trust for “such objects of
benevolence and liberality as the Bishop in his own discretion should most
approve of.”
Objection = the trust did not have a “definite object”.
Known as the ‘beneficiary principle’.
A private trust must have beneficiaries, identified with sufficient
certainty to allow the trustees to do their job.
In the absence of anyone with an interest in the execution of the trust,
the trustees could do just as they pleased.
Re Astor’s Settlement Trusts –
Settlement to hold the shares of a company on trust for purpose of, inter alia,
the maintenance of good understanding, sympathy and cooperation between
nations, and the preservation of the independence and integrity of
newspapers.
Objection = the identified purposes were considered to be too uncertain.
The trustees could not do their duty unless the purposes were defined
with sufficient certainty.
4. Exceptions to the rule:
a. Deeply Rooted Anomalies:
Trusts for the maintenance of particular animals:
Re Dean – trust for maintenance of testator’s horses and hounds.
Trusts for erection and maintenance of monuments or graves:
Re Hooper
BUT – Re Endacott
Although the CA refused to overrule these judgements, it held that
they were not to be extended, not even to closely analogous
situations.
b. Execution of the purpose to the benefit of identifiable persons:
Goff J in Re Denley’s Will Trusts –
A company conveyed title to land to trustees to hold for a period
determined by lives “for the purpose of a recreation or sports ground
