Jump directly to the content

Enforcing a Charitable Trust

Court rules that a potential beneficiary to a charitable trust lack the legal authority to enforce the trust.

Key Point 6-07.05. Church board members may be personally liable for diverting designated funds or trust funds to some other purpose.

The Alabama Supreme Court ruled that a church lacked the legal authority to enforce a charitable trust in which it was named as a potential beneficiary. A decedent died in 1950, leaving a will which created a trust providing for the distribution of income to unnamed charitable, educational, and religious entities, in the trustee's discretion. A church and school sued the trustees on behalf of the class of all potential trust beneficiaries in an attempt to compel them to make distributions.

The court concluded that "identifiable and actual beneficiaries" of charitable trusts have a sufficient special interest in the enforcement of the trust that they can sue to enforce the trust terms. But in this case, the beneficiaries were merely potential beneficiaries and, ...

Log In For Full Access

Interested in becoming a member? Learn more.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

Related Topics:
Posted:
  • November 1, 2008

Related ResourcesView All

2020 Church & Clergy Tax Guide
2020 Church & Clergy Tax Guide
Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
Charitable Contributions Bulletin Inserts
Charitable Contributions Bulletin Inserts
Help your members give more by answering their charitable giving and tax law questions.
Best Practices for Receiving Charitable Contributions
Best Practices for Receiving Charitable Contributions
Practical help and clear understanding on issues surrounding charitable contributions.
Receipts for Donors
Receipts for Donors
16 letters and forms for providing receipts to donors for different donations.