The Basics Continued: What is a Charitable Trust
Yesterday, I published a blog post discussing purpose trusts. Among the various kinds of trusts, charitable trusts represent a distinct subset within purpose trusts. At its core, a charity is a trust established for a specific charitable objective. Like any other trust, a charitable trust must satisfy the “three certainties”:
- Certainty of Intention – There must be clear evidence that the individual intended to create a trust.
- Certainty of Subject Matter – The assets that will form the trust must be clearly identified or identifiable.
- Certainty of Objects – The beneficiaries or those who have an interest in the trust are clearly defined.
Additionally, a charitable trust must have a valid charitable purpose. Under common law, there are four recognized categories of charitable purposes:
- Relief of poverty
- Advancement of education
- Advancement of religion
- Other purposes beneficial to the community
If a trust falls within one of these categories and meets the three certainties, it will generally be recognized as a valid charitable trust.
Maurer Estate (Re), 2025 BCSC 1539
A recent ruling from the Supreme Court of British Columbia highlights the complexities that can arise when a will refers to an external document expressing the testator’s wishes for distributing their estate’s residue. In this case, the deceased left a will directing her trustee—a trust company—to divide the estate’s residue equally among 15 named charities, based on instructions set out in a separate Letter of Wishes.
The will included a fallback provision: if the Letter of Wishes could not be found among the deceased’s papers after her death, the remainder of the estate would be distributed to charitable and non-charitable organizations to which she had donated a specified amount in the preceding five years. A central legal issue was whether the Letter of Wishes could be incorporated into the will by virtue of representing the deceased’s testamentary intentions.
Timing and Testamentary Intention
When considering the application of section 58 of British Columbia’s Wills, Estates and Succession Act, the Courts must be satisfied that the testator’s intentions are “deliberate, fixed and final”. The Court agreed that the Letter of Wishes was deliberate, however, they were not “fixed and final” as the relevant date for determining such was the date of death, not the date the will was executed. The possibility of the Letter constituting a secret trust was also considered but rejected due to insufficient evidence regarding the timing of communication of the deceased’s intention.
The Role of Charitable Trusts
Ultimately, the Court found that the estate’s residue could be distributed to the charitable beneficiaries, listed in the Letter as all the requirements for a valid charitable trust had been satisfied.
Key Takeaways
This case demonstrates that courts may honour a deceased’s wishes when there is clear evidence of their intentions regarding the distribution of assets. Charitable trusts remain a viable legal mechanism to ensure those intentions are fulfilled, provided the necessary legal criteria are met.
For additional details about charitable trusts, please refer to our earlier article available here: https://hullandhull.com/2022/02/what-even-is-a-charity/