What Are Trusts of Imperfect Obligation

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The Answer is Trusts of imperfect obligation, also known as honorary trusts or trusts of mere honor, are a type of trust that lacks a legally enforceable beneficiary. In a typical trust, there are three parties involved: the settlor (who creates the trust), the trustee (who manages the trust), and the beneficiary (who benefits from the trust). Trusts are usually created to provide a legal framework that ensures the trust's assets are managed and distributed according to the settlor's wishes.

However, in a trust of imperfect obligation, the intended beneficiary is not a person or a legally recognized entity but rather a purpose or an idea that is not enforceable by law. For example, a settlor might create a trust for the maintenance of a family grave, the care of a pet after the owner's death, or the promotion of a cause that does not qualify as a charitable purpose under the law.

Since there is no human beneficiary to enforce the trust, these trusts rely on the honor of the trustee to carry out the settlor's wishes. If the trustee fails to do so, there is often little legal recourse to compel them to act, as the courts generally do not enforce non-charitable purpose trusts. However, some jurisdictions have developed legal mechanisms to deal with such trusts, such as the appointment of an enforcer or the application of the cy-près doctrine, which allows the trust's purpose to be modified to a similar charitable purpose that can be legally enforced.

It is important to note that the legal status and treatment of trusts of imperfect obligation can vary significantly between different jurisdictions, and some legal systems may not recognize them at all. In jurisdictions where they are recognized, there may be specific rules and limitations, such as a time limit on the duration of the trust (e.g., the Rule Against Perpetuities).

What Are Trusts of Imperfect Obligation

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