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Question 1
Ilene established a trust to care for the elderly. In addition, the trust required her to become the director of the foundation. This is an example of
Correct
Incorrect!
Correct
Incorrect!
Correct If conditions attached to the charitable interest require that the property also be devoted to a noncharitable purpose, the trust is not charitable. Here, Ilene put in a condition that said the trust had to hire her as the director, certainly a noncharitable purpose. As such, the trust fails as a valid charitable trust.
Incorrect! If conditions attached to the charitable interest require that the property also be devoted to a noncharitable purpose, the trust is not charitable. Here, Ilene put in a condition that said the trust had to hire her as the director, certainly a noncharitable purpose. As such, the trust fails as a valid charitable trust.
Question 2
Darren established a trust at Davis Business Institute, a for-profit technology institute in Dallas, "to educate graduates of any Dallas high school in computer science, accounting or business." This is a valid charitable trust.
Correct
Incorrect!
Correct Educationally-oriented trusts that benefit indefinite members of the public are considered charitable. The education label for a trust, however, is narrowly tailored to only include non-profit institutions. Here, Davis Business Institute is a for-profit school. As such, the trust fails as a charitable trust.
Incorrect! Educationally-oriented trusts that benefit indefinite members of the public are considered charitable. The education label for a trust, however, is narrowly tailored to only include non-profit institutions. Here, Davis Business Institute is a for-profit school. As such, the trust fails as a charitable trust.
Question 3
Becky took a personal interest in her state's attempt in redistricting. As such, she established a trust to educate the people of her state on the merits of redistricting. This was a grassroots effort, enlisting the help of a variety of community activists to pass out flyers and make speeches at community gatherings. This is a valid charitable trust.
Correct Generally, trusts that promote improvement in laws are considered charitable trusts, as long as their primary purpose is not lobbying. Here, Becky was engaged in a grassroots effort in her community to change the state's law on congressional districts. Since she was not involved in lobbying, this trust would be considered charitable.
Incorrect! Generally, trusts that promote improvement in laws are considered charitable trusts, as long as their primary purpose is not lobbying. Here, Becky was engaged in a grassroots effort in her community to change the state's law on congressional districts. Since she was not involved in lobbying, this trust would be considered charitable.
Correct
Incorrect!
Question 4
Katrina, a follower of the Dalai Lama, established a trust to promote the dissemination of his teachings throughout the U.S. This is an example of:
Correct
Incorrect!
Correct
Incorrect!
Correct
Incorrect!
Correct Charitable trusts do not have to be limited to a single purpose to be valid. Sometimes the permitted purposes overlap. Here, Katrina is promoting an educational function by teaching others about Buddhism. In addition, the trust serves a religious purpose by promoting Buddhism. As such, the trust is valid as either an educational or religious charitable trust.
Incorrect! Charitable trusts do not have to be limited to a single purpose to be valid. Sometimes the permitted purposes overlap. Here, Katrina is promoting an educational function by teaching others about Buddhism. In addition, the trust serves a religious purpose by promoting Buddhism. As such, the trust is valid as either an educational or religious charitable trust.
Question 5
Kevin, who is an atheist, established a trust to promote atheism. This is an example of:
Correct
Incorrect!
Correct Generally, religious trusts promote the belief in some Supreme Being. Here, since Kevin is an atheist, his trust would not qualify as promoting religion. Rather, since he is educating people on his beliefs, the trust may be sustainable as one for education.
Incorrect! Generally, religious trusts promote the belief in some Supreme Being. Here, since Kevin is an atheist, his trust would not qualify as promoting religion. Rather, since he is educating people on his beliefs, the trust may be sustainable as one for education.
Correct
Incorrect!
Question 6
Brooke created a trust to pay funds "on the last school days of each calendar year before Christmas and Easter, in as many equal parts as there are children in the first, second and third grades of the Wilson Elementary School, to be used by each child in the furtherance of his or her education." This is an example of:
Correct
Incorrect!
Correct A charitable trust must have a permitted purpose, such as the relief of poverty, the advancement of education or religion. The court found that the timing of the payments were at a time when the children were least likely to be thinking about education. As such, this would not be a valid educational trust. See, e.g., Shenandoah Valley National Bank v. Taylor, 63 S.E.2d 786 (1951).
Incorrect! A charitable trust must have a permitted purpose, such as the relief of poverty, the advancement of education or religion. The court found that the timing of the payments were at a time when the children were least likely to be thinking about education. As such, this would not be a valid educational trust. See, e.g., Shenandoah Valley National Bank v. Taylor, 63 S.E.2d 786 (1951).
Correct
Incorrect!
Question 7
Abe established a trust in his hometown "to provide a sewage disposal plant." This is a valid purpose for a charitable trust.
Correct The cure of disease and promotion of health are per se charitable purposes. Here, Abe sought to improve his town's health by providing funds for a sewage disposal plant. Accordingly, this trust has a valid charitable purpose.
Incorrect! The cure of disease and promotion of health are per se charitable purposes. Here, Abe sought to improve his town's health by providing funds for a sewage disposal plant. Accordingly, this trust has a valid charitable purpose.