Non-Charitable Purpose Trusts
Private Purpose Trusts and the Beneficiary Principle
A settlor may try to make a trust for a specific purpose. For example, they might leave £1 million ‘to use to promote good relations between France and England’.
These trusts are usually void because they offend the beneficiary principle. All trusts must have a beneficiary with an equitable interest in whose favour the court can order performance – Re Denley’s Trust Deed  1 Ch 373. Private purpose trusts also frequently run afoul of the perpetuity rules.
Exceptions to the Beneficiary Principle
Trusts for the erection or maintenance of tombs, graves and monuments: Mussett v Bingle  WB 170.
Trusts to maintain a specific animal or animals (such as ‘my two pet cats’): Re Dean (1889) 41 Ch D 552.
Trusts for the performance of private Catholic masses: Re Banfield  1 WLR 846. Trusts for public masses may be charitable: Re Hetherington  2 All ER 129.
Trusts for fox hunting (only if exempt from the ban under the Hunting Act 2004): Re Thompson  Ch 342.
These trusts are ‘trusts of imperfect obligation’: Tito v Waddell (No 2)  Ch 106. This is because, without a beneficiary, there is no one to enforce them. The trustees are not obliged to use the money for the trust purpose. However, they are prohibited from using it for any other purpose.
The prohibition on using the fund for other purposes can be enforced using a ‘Pettingall’ order: Pettingall v Pettingall (1842) 11 LJ Ch 176. Anyone with an interest in the fund can apply for this order. This is usually those who will receive the fund when the trust expires.
It is also possible to make a purpose trust and get around the beneficiary principle in the following ways:
- Make the gift to a company or unincorporated association whose object is achieving the particular purpose.
- Ensure the purpose is objectively intended to benefit an identifiable beneficiary. For example, the courts will construe ‘a trust to create a tennis court for my children to use’ as a trust for particular beneficiaries: the children – Re Bowes  1 Ch 507. Such trusts need to be careful to avoid falling afoul of the rule against inalienability of capital, however: Re Denley’s Trust Deed  Ch 534.
- If the purpose is charitable, the trust may be valid so long as it complies with certain rules.
Capriciousness and Certainty
Even if a private purpose trust falls under one of the exceptions, it may still fail if the purpose is capricious. A trust is capricious if it does not actually benefit anyone or does so completely arbitrarily.
For example, in Brown v Burdett (1882) 21 Ch D 667 a trust had the purpose of blocking up a house’s doors and windows for 20 years.
A private purpose trust will also fail if its purposes are too vague to be enforced: Re Astor’s Settlement Trusts  Ch 534.