Chapter 6 Self-Test Questions

How do the rules on perpetuity and vesting apply to charitable trusts?

Both the perpetuity rule and the vesting rule apply to charitable trusts.

Only the perpetuity rule applies to charitable trusts.

Only the vesting rule applies to charitable trusts.

Neither the perpetuity rule nor the vesting rule apply to charitable trusts.

In charitable trusts, who holds the beneficial interest in the trust property?

The public.

The Attorney General.

The Charity Commission.

There is no beneficial interest.

'Initially, if a purpose fell outside the Preamble to the Charitable Uses Act 1601, the courts would use the equitable principle of flexibility to find the purpose valid.'

True.

False.

'The object of a charity must satisfy at least one of the thirteen purposes provided by the Charities Act 2011. If an object falls outside these purposes, the courts will not recognize it as charitable'.

True.

False.

Does every charity need to prove that it provides a public benefit?

All charities must provide a public benefit.

There are some categories of charities where the public benefit is presumed.

There are some categories of charities where the requirement to provide a public benefit has been waived.

As long as the charitable purpose falls within the categories recognized in the statute, it will have met the public benefit requirement.

Why was the public benefit test not met in National Anti-Vivisection Society v IRC?
There might be more than one correct answer.

The charitable purpose was not beneficial.

The charity must have a purpose which is beneficial to humans as the public.

The detriment to the public from a ban on animal testing outweighed the benefit for the welfare of animals.

The main purpose of the charity was to campaign for a change of law.

A settlor constitutes a charitable trust for the benefit of her children.
Is the trust valid?

Whether the trust is for the benefit of the public depends on the number of children the settlor has.

The settlor is assisting state services by providing funds for their children such that there is a public benefit to public services.

The trust will be valid as long as it falls within one of the statutory categories of charitable purpose.

The trust is not valid.

'The definition of "public" is more liberally interpreted for charities for the relief of poverty due to the benefit to the state from poverty being relieved.'

True.

False.

Denise creates a charitable trust for the relief of poverty for her siblings. Why is this not a valid charity?

Because there is an insufficient public benefit.

Because there is a family connection between the creator of the charity and those benefiting from it.

Because there is no description of poor people.

It is a valid charity.

What is the 'personal nexus' test?

Under no circumstances can charities benefit individuals who have a personal relationship with the creator of the charity.

Charities cannot benefit a group of individuals where the inclusion in that group is dependent on a relationship with a particular person.

Charities must benefit people.

Charities cannot benefit people who live in close proximity to the creator of the charity.

Why was the gift in Gilmour v Coats held not to be a charitable trust?

There was no charitable purpose as the priory did not meet the definition of religion.

There was no benefit to the public as the nuns were cloistered.

There was only a limited benefit to the public by way of the nuns' prayers.

There was a benefit, but it was limited to the people in the area around the priory.

Why was the trust in McGovern v Attorney General held not to be a charitable trust?

There was no public benefit.

The trust had a political purpose.

The trust did not fall within one of the categories under the Charities Act 2006.

The purpose of the trust had failed and the property could not be applied cy-près.

Is it possible for charitable trusts to have a mixture of charitable and non-charitable purposes?
There might be more than one correct answer.

As long as the primary purpose is charitable, the trust will not be invalid.

It is not possible for a trust to have a mixture of charitable and non-charitable purposes.

The trust will be charitable if the non-charitable purposes are beneficial to the public.

The trust will be charitable if the money for the charitable and non-charitable purposes are kept separately.

In her will, A directs her executors to apply the residue of her estate for such charitable or benevolent purposes as they see fit.
Is the gift valid?

The gift is valid; it is presumed that the executors must apply the residue for charitable and benevolent purposes.

The gift is valid as long as the executors apply the residue for charitable purposes.

The gift is invalid because A must specify the charities in the will; it cannot be left to the executors' discretion.

The gift is invalid because of its construction.

'If there is a non-charitable purpose, whatever the circumstances, the entire trust will fail.'

True.

False.

In 2010, a testator declared a trust for the advancement of tennis in the local community and for the benefit of the testator's children. Is this a valid charitable trust?

It is a valid charitable trust because the non-charitable purpose (relating to the testator's children) is ancillary to the main charitable purpose.

It is a valid charitable trust because the non-charitable purpose can be severed from the charitable purpose.

It is not a valid charitable trust because the non-charitable purpose cannot be severed from the charitable purpose.

The trust can be declared retrospectively valid by the Charitable Trusts (Validation) Act.

A makes a bequest to a particular charitable institution. The institution has ceased to exist before the testator's death.
What happens to the gift?
There might be more than one correct answer.

There is an initial failure of the gift.

If the charitable institution was consolidated into others, then the gift will succeed.

If the gift was for the institution's charitable purpose, then the gift will succeed.

The gift will be applied automatically to a similar institution.

'If the charitable purpose fails before the commencement of the trust, the fund will automatically be applied cy-près.'

True.

False.

What is the consequence of an initial failure of charitable purpose when there is no general charitable intent?

The fund goes to the Crown.

The fund is held on resulting trust for the settlor or those entitled to the testator's residuary estate.

The fund is applied cy-près.

The original charitable purpose is altered.

A testator makes several gifts to charities with similar purposes. It turns out that one charity does not exist.
What happens to the gift?
There might be more than one correct answer.

There is an initial failure of the gift.

The gift will be applied cy-près.

The gift will go to the Crown.

The gift is held on resulting trust for the those entitled to the residuary estate.

A charitable purpose is subject to a condition that makes it impossible or impracticable to achieve the main purpose.
In what circumstances can the court sever the condition so that the main purpose can be achieved?

The court can never sever the condition.

The court will always sever the condition if it makes it impossible to achieve the charitable purpose.

The court will sever the condition as long as it is not essential to the fulfilment of the donor's charitable intent.

The court will sever the condition with the presumed consent of the donor.

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