It is possible to set up a trust for charitable purposes. Charitable trusts are quite common, but certain requirements must be met.
Purpose of a Charitable Gift
Reasons for charitable gifts funded hrough a trust include the desire to:
- Help relieve poverty
- Help the elderly
- Advance a religion
- Benefit educational establishments
- Aid with the construction or maintenance of public property (such as a park)
- Prevent animal cruelty
How Are Beneficiaries Designated?
In general, beneficiaries of charitable gifts must have a broader scope:
- Cannot be specifically named people
- Can be a class of persons
- May be institutions
In some cases, a charitable gift may be given to a non-charitable organization. However, there must be a charitable intent; otherwise the trust is invalid as a charitable trust.
Supervision & Regulation
In some states, the office of the Attorney General oversees charitable trust activity. The Attorney General's duties in this regard include:
- Maintaining a register of charitable corporations, trustees, and trusts
- Investigating transactions relating to charitable trusts
- Enforcing charitable trusts
- Recovering property on behalf of a charitable trust
Cy Pres Doctrine
If your charitable wishes cannot be fulfilled for some reason, the appropriate court will attempt to carry out your wishes by giving the property to an organization with a related charitable purpose. For example, a charitable trust set up to eradicate polio may instead be given to aid a pediatric foundation.
© 2013 NextClient.com, Inc. All rights reserved.