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Charitable Trusts

Charitable trusts serve crucial societal functions, typically categorized into five main purposes: relief of poverty, advancement of education, promotion of health, support of religion, and municipal purposes. Beneficiaries must be part of a sufficiently large class for community enforcement. Key legal considerations include the determination of purpose, tax benefits, and the role of attorneys general in enforcement. Notably, some states, like Texas, lack mortmain provisions, while the 14th Amendment raises questions about the constitutionality of certain limitations. Understanding these facets is essential for effective charitable planning.

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Charitable Trusts

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  1. Charitable Trusts

  2. Introduction – Basic Purposes • Basic categories of charitable purposes: • Relief of poverty • Advancement of education • Advancement of religion • Promotion of health • Government or municipal purposes

  3. Size of charitable class • General rule = sufficiently large or indefinite class of beneficiaries so community is interested in enforcement of trust. • But, see notes 1-3, p. 105.

  4. Mortmain Provisions • Statute which limits gifts to charity under specified circumstances. • Often held to be unconstitutional under 14th Amendment’s equal protection clause. • Texas does not have one.

  5. Determination of Charitable Purpose • Altruistic motive • Who determines? • Court, or • Settlor?

  6. Standard • “Generally accepted” • Marsh – p. 106 • Advancement of ideas • Held by many? • Unique to settlor? • Whims? • Religious purposes

  7. Other Charitable Trust Issues • Tax benefits • Successor trustees (§ 113.083(b)) • Enforcement by attorney general • Cy pres to prevent lapse • RAP not applicable • Split interest trusts

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