What Is the Consequence for Trusts for Imperfect Obligation as a Result

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The Answer is In the case of Re Endacott (1960) Ch 232, the court dealt with the issue of non-charitable purpose trusts, which are a type of trust for imperfect obligation. These are trusts that are not for the benefit of specific individuals (as in private trusts) nor for charitable purposes (as in charitable trusts). Instead, they are set up for purposes that are not recognized as charitable under the law and do not benefit identifiable individuals.

The consequence of the decision in Re Endacott is significant for the understanding and application of non-charitable purpose trusts. In this case, a testator left a bequest for the purpose of providing "some useful memorial to myself." The court had to determine whether this constituted a valid trust.

The court held that the trust failed because it was neither for identifiable individuals nor for a charitable purpose. The decision reinforced the principle that, in general, non-charitable purpose trusts are not enforceable because they lack a clear beneficiary who could enforce the trust. This is known as the "beneficiary principle," which requires that for a trust to be valid, there must be identifiable beneficiaries who can enforce the trustee's duties.

The Re Endacott case is often cited for the proposition that non-charitable purpose trusts are generally void unless they fall within certain exceptions. These exceptions include:

1. Trusts for the maintenance of specific animals (pet trusts).
2. Trusts for the erection or maintenance of graves or monuments.
3. Trusts for the saying of private masses (though these are limited in scope).
4. The "masses" exception has been extended in some cases to include trusts for religious services.

However, even these exceptions are subject to limitations, such as the "rule against perpetuities," which requires that the trust must not last indefinitely and must be wound up within a certain period (traditionally 21 years after the death of a life in being at the time of the trust's creation).

The Re Endacott decision thus serves as a reminder of the strict requirements for creating valid trusts and the difficulties associated with enforcing non-charitable purpose trusts that do not benefit identifiable individuals or recognized charitable purposes. It also highlights the narrow scope of exceptions to the beneficiary principle, which allows for only a limited range of non-charitable purpose trusts to be considered valid.

What Is the Consequence for Trusts for Imperfect Obligation as a Result

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