Beneficiary principle

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The principle that, for a trust to be valid, there must be some person or persons with standing to enforce the trust in the courts. The beneficiary principle is often invoked to explain why English law does not, on the whole, allow the creation of a private purpose trust.

A trust of imperfect obligation is one that is expressed in such a way that it imposes an obligation on the trustee to carry out a purpose, but which can also be construed as a trust to benefit one or more individuals. Such a trust is not an exception to the beneficiary principle.

However, trusts that are valid under the principle of Re Denley (1969) are exceptions to the beneficiary principle. The courts enforce such trusts because there are indirect beneficiaries who possess a sufficient interest to have standing to enforce the trust.

See also certainty of objects.





UK LAW
Trust Law