When people are planning their estates, some may want to either set up a charitable foundation or create a trust for charitable purposes. Courts will generally not hold these types of trusts to be invalid if they are unclear or if the charitable beneficiary is uncertain. Instead, if there is a question, courts will try to enforce the purpose of the trust as closely as possible.
Certain rules apply to trusts that were created on or before April 15, 1927, or by a grantor who died on or before such date. If property or assets were place in such a trust that set out a specific charitable or benevolent purpose, the property or assets may only be used for the purposes that were defined. If there is a subsequent dispute, the current trustee is able to petition the court and request that the court make a determination of the rights of the grantor’s heirs and the grantees.In the event that the circumstances have changed since that trust was created to a degree that administering it would be impossible as written, the court may order that it be administered in a manner that most closely fits the grantor’s intent and purposes.
Charitable trusts are often established in order to benefit a preferred charity, cause or educational institution. A distribution from such a trust may end up being litigated by the grantor’s heirs that would otherwise stand to inherit the property.
It is important to draft the charitable trust documents clearly so there is little room for misinterpretation. People should also regularly review their trust documents to make certain that events have not occurred that make it difficult or impossible to carry out their wishes. An estate planning attorney may help create a trust in a manner to ensure that the grantor’s wishes are carried out.
Source: 2014 Minnesota Statutes, “501B.31 Charitable Trusts”, accessed on Jan. 27, 2015