Enforcement of Charitable Trusts

Key point 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 standing to enforce a charitable trust that was created to distribute income to religious and charitable institutions. An elderly man died in 1950 leaving a will that created a charitable trust. The trust provided that, after the payment of nominal sums to family members, the bulk of the trust's income was to be distributed to local religious and charitable institutions. Fifty years later, a church and school filed a lawsuit seeking to have a court compel the enforcement of the trust. A trial court dismissed the lawsuit on the ground that the church and school lacked "standing" to enforce the trust. On appeal, the state supreme court affirmed the trial court's decision. It began its opinion by observing that historically ...