Questions About Equity and Trust Law - Assignment Example

The first question is whether the f200,000 that Frederick willed to provide grants to encourage traditional methods of boat building in Seahaven would qualify as a charitable trust. There are two major prongs that must be satisfied – that it is for the public benefit, and that it is “within the spirit and intendment of the preamble of the Charitable Uses Act of 1601.”1 The first prong, that it is for the public benefit, is satisfied if the bequest benefits the community as opposed to individuals.2 Moreover, the public benefit must be an actual benefit.3 The gift should benefit a large section of society, or the public at large, at least not be “numerically negligible”, and there should not be a personal bond between the donor and the beneficiaries.4 This gift was for the encouragement of traditional methods of boat building in Seahaven. It might pass the public benefit test, as the boat building company that was founded by the Frederick was “the only major source of employment in his hometown of Seahaven.” Therefore, money that is put towards traditional methods of boat building might benefit the community, in that it would teach people in the community how to build traditional boats. This would, in turn, be helpful to the community because it would help people acquire the skills that would be necessary to seek employment, and, as this is the only major employer in the community, these are skills that are clearly valuable to have. On the other hand, by the facts that are presented and the wording of the trust, it might not be for the public benefit. It is difficult to tell if traditional boats are the focus of what Sailboats, Ltd. makes. Frederick was a yachtsman, so it is possible that his company focused on making yachts, as opposed to traditional boats. Therefore, if this is the case, then there would be no public benefit to the gift, because the only public benefit would be that it would prepare individuals for employment with the only employer in town. If the company does not make traditional boats, then this skill would be useless to the community. Further, the trust states that the trustee is to “look favourably on applications from employees and ex-employees of Sailboats, Ltd.” This language stops short of stating that the trust is only for the employees and ex-employees of Sailboats, Ltd., therefore this clause should not affect the analysis of whether or not the gift is for the public benefit. If the trust did state that the employees and ex-employees were the beneficiaries of the trust, this would probably automatically defeat the trust, as their cannot be a personal bond between the donor and the beneficiary. The next analysis is whether or not the trust is within the spirit of the 1601 Act. One of the uses in the 1601 Act is the schools of learning.5 It is unclear by this gift if it is meant for educating people on making these traditional boats, or for some other purpose – such as setting up museums featuring these traditional boats or some other purpose regarding traditional boats. The wording is vague, so it cannot be assumed that educating people in making the boats was the intention of the bequest. Therefore, it cannot be said that schools of learning is the intention of the bequest. Another category that the bequest could fall under would be the either the advancement of culture or heritage; or the advancement of amateur sports. These are both categories that were added in the Charities Act 2006.6 It could be said that the promotion of traditional boat making is an advancement of culture or heritage, if traditional boats are considered to be a major part of the Seahaven heritage or culture. Considering that the Sailboats Ltd. is the only major employer in the town, it would be safe to assume that this town is a town that is centered around boats and is most likely on a large body of water. Therefore, traditional boats are probably a major part of the towns heritage and culture, and the bequest could satisfy this category. The other category could be the advancement of amateur sports. This is a possibility if the bequest is geared towards building these boats so that perhaps these boats could be entered into some type of competition. However, this is not clear by the wording of the bequest if this is the focus. But if traditional boats are traditionally a part of sporting competitions in the area, this is one possibility. It seems as if this bequest will not considered to be a charitable bequest. It might benefit the public at large, in that it give individuals the skills that will help them find employment with the only major employer, if Sailboats Ltd. makes traditional boats. However, if Sailboats Ltd. does not specialize in making traditional boats, this bequest would not really benefit them because it would not help them develop necessary skills to get a job with Sailboats Ltd. In fact, by the name, it would seem as Sailboats Ltd. probably does not specialize in traditional boats. If this is the case, then it would defeat the charitable purpose of the bequest. Moreover, whether or not the bequest promotes a charitable cause, such as enhancing culture or heritage or encouraging amateur sports, is an open question. Therefore, whether or not the bequest is charitable is iffy at best, and more information would be needed to determine this. b) The same analysis will be applied as to whether the grants for the working people who are vegetarians qualifies as a charitable bequest. The first prong of the analysis is whether or not this bequest benefits the public. Once again, this gift would meet this criteria if it benefits the community as opposed to individuals.7 Moreover, the public benefit must be an actual benefit.8 The gift should benefit a large section of society, or the public at large, at least not be “numerically negligible”, and there should not be a personal bond between the donor and the beneficiaries.9 The question that must be answered is whether the numbers of vegetarians is “negligible,” or if the bequest benefits the public at large or a large section of society. This is an interesting question. On the one hand, vegetarians probably make up a small segment of most populations, especially considering that this is probably a seaside town, and a big part of seaside towns is often seafood, therefore it is debatable whether or not vegetarians make up a large part of the population. So, the question of how many vegetarians are in the town must be answered before it can be determined if this is a charitable bequest. Moreover, the bequest is further limited to “working people in Seahaven who are vegetarians.” Considering that there is only one major employer in town, that being the Sailboats, Ltd., the population who will benefit is limited even further. This diminishes the prospects that this bequest will be considered charitable even more. The other prong is whether the bequest is for a charitable purpose. In addition to the traditional charitable purposes of education, relief of poverty and advancement of education,10there are other purposes that are considered charitable under the Charities Act 2006. The three that may be considered are the advancement of health or the saving of lives; the advancement of environmental protection or improvement and the advancement of animal welfare.11 And, it might be considered to be charitable under the advancement of education category as well. Whether or not it is considered to be advancement of education would depend upon whether “the subject matter of the proposed research is a useful study and it is contemplated that the knowledge acquired as a result of the research will be disseminated to others.”12 So, it must be determined if the study of seaweed as a dietary foundation is useful and will be disseminated to others. The first prong might be satisfied – seaweed is a novel idea for a dietary foundation, and, if seaweed proves to have many health benefits then this would definitely benefit the public at large. If the seaweed diet is effective for weight loss, this would also benefit the public at large and would prove to be a useful study. Therefore, it would be useful to study the health benefits of seaweed, as these benefits are not necessarily universally known at this time and a diet based upon seaweed just might prove to the next hot thing. Also, if the first prong is satisfied, then the court will assume the second prong – that the results will be disseminated to others.13 However, even if the court does not assume this, it still would probably meet this test, as, if the diet proves effective, this will definitely be disseminated into the general public and the general public will benefit from this. The other charitable purposes that might fit are the advancement of health or the saving of lives, environmental protection or improvement and animal welfare. The advancement of health and saving of lives seems most promising here. This is because, as stated before, seaweed might have many health benefits that are unknown and might be helpful in weight loss. If this is so, then a diet based upon seaweed could definitely be considered to be in the interest of health advancement. The other two categories are related – environmental protection and animal welfare. As the bequest benefits vegetarians, then this indirectly affects animal welfare as it encourages a lifestyle that does not include meat-eating. Many vegetarians are vegetarian precisely because they care about animal welfare, therefore a promotion of this lifestyle will lead to less animal killing and this benefits animals. It is also considered by many to be environmentally sound, because one of the concerns that vegetarians have is that animals eat many of the crops and vegetation that could be used to feed the world, and animals contribute to pollution. Therefore, if the world cuts down on meat consumption, this would be helpful for environment, as there will be more sustainable crops that can be consumed by humans, as opposed to animals, and that there would be less pollution as well. In conclusion, it would seem that this gift would be for a charitable purpose – either for education, health promotion, protection of the environment or animal welfare. However, the fact that it benefits a limited population – working vegetarians in the small town of Seahaven – argues against this bequest being charitable. c) This last bequest probably would not be charitable. Although it does have a charitable purpose – preservation of fish stocks would definitely be considered to be benefiting animal welfare, and probably would be considered protection of the environment, therefore the purpose is charitable, it would fail because of impossibility. The cypres doctrine states that if a bequest is impossible at the outset, then “the settlers original trust will not be created.”14 In this case, this order would be impossible to carry out. There is no possible way that “the worlds fish stocks” can be preserved, considering that there are billions of fish in the world. The bequest does not narrow the definition of the word “fish” whatsoever, so one would have to conclude that the intention would be to preserve the billions of fish in the ocean, streams and lakes around the world. This is not just impracticable but impossible. Therefore, this particular bequest will fail under the cypres doctrine, and the original trust will not be created. Sources Used Charitable Uses Act 1601. Charities Act 2006. Kitching,A. “Charitable Purpose, Advocacy and the Income Tax Act”, Parliamentary Information and Research Service, February 2006 Malik, N. “Defining Charity and Charitable Purposes in the United Kingdom”, The International Journal of Not-For-Profit Law, vol. 11, Issue 1, November 2008, p. 3. Martin, F. “Charities for the Benefit of Employees: Why Trusts for the Benefit of Employees Fail the Public Benefit Test.” Accessed 7 August 2010 Read More