Settlor (aka trustor, donor, transferor, grantor, testator):
Declaration of trust:
Inter vivos trust:
Power of appointment:
In the previous chapter on private trusts, one of the requirements for the validity of a private trust was it had to have at least one identifiable beneficiary. In contrast, a charitable trust must benefit either society or a sufficiently broad segment of the population—an indefinite number of potential beneficiaries.
As a public trust, a charitable trust must have six distinct elements to be valid:
- an intention of the settlor to create a trust;
- a trustee to administer the trust;
- a res or subject matter;
- a charitable purpose expressly designated;
- a definite class to be benefited; and
- indefinite beneficiaries (within the defined class) who actually receive the benefit.
Another difference between charitable trusts and other trusts is that the Attorney General (instead of individual beneficiaries) in the trust’s jurisdiction is the person who has the authority to enforce the charitable trust on behalf of the community.
EXAMPLE: Archibald established a trust “to educate some boy or girl in science or art.” Since there is only the possibility of one beneficiary, this trust does not meet a public purpose (indefinite number of beneficiaries) and would fail as a charitable trust. See, e.g.,
In re Estate of Huebner, 127 Cal. App. 244 (1932).
This example represents an outdated view of how many beneficiaries must be benefited before the charitable trust remains valid. Today, a high degree of indefiniteness is not essential to a charitable trust. Rather, a single recipient or class of definitely ascertainable people who would benefit directly from the trust does not invalidate the trust if:
- the recipient will be selected from a definite group (i.e., all high school seniors of a particular state); and
- the recipient’s being so benefited would be sufficiently in the general public interest that the community as a whole could be said to be the ultimate beneficiary of the trust.
EXAMPLE: Archibald established a trust for the education of “a child . . . preferably one who is handicapped.” This has been upheld as a charitable purpose. See, e.g.,
Chapman’s Estate, 39 Pa. D. & C.2d 701 (1965).
A charitable trust is created in the same manner as a private express trust:
- declaration of trust;
- transfer in trust (either inter vivos or by will);
- exercise of power of appointment; and