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Application of Ordinary Trust Principles to Charities

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In the application of the ordinary trust laws to a charitable trust, the ordinary principles of trust are relaxed in order to accommodate the concept that charitable trusts are for the public benefit. In other words, since public trust or charitable trust are not created for an individual, the certainty of object is not strictly enforced in the construction and validation of charitable trusts. Since no specific individual is named as a beneficiary, this means that there is no beneficiary capable of enforcing or ensuring that the trustees of the charitable trust comport with the terms of the trust or are accountable for trust property.   In this regard, the Attorney General represents the beneficiaries and in order to provide a legal mechanism by which the charitable trust is regulated and thereby capable of enforcement, the ordinary trust facilities with the appropriate modifications are desirable. Recognizing the distinction between the charitable trust and the ordinary trust and flexibility of trust laws, the following exemptions from ordinary trust laws apply to charities: The certainty of objects. The rule against perpetuities. The doctrine of the lapse in which case if a trust fails the trust property is automatically reverted to the settlor’ s estate. It appears entirely impossible to regulate the charitable property and the officers’ specific duties under the law of contract.   The law of contract, while a law of obligations, requires a reciprocal arrangement where both sides of the contract suffer a detriment and a benefit.   The arrangements provided for by virtue of charity confer benefits on the recipients of the trust property with no reciprocal duties.   Similarly, those who administer the charity’ s property have a duty with no guaranteed benefit to administer the funds in accordance with the wishes of the donors.   In this regard, the characteristics of the charitable arrangement are far too different from the law of contract and far too similar to the law of trust to ignore.  

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