All About Estates

Perpetual Testamentary Charitable Trusts

When making charitable gifts by Will, many donors wish to ensure that their gift has a long-term meaningful impact that will enable charitable activities to be carried out long after their deaths.

Often donors believe that the best way to do this is to direct that the amount they are gifting be held in a charitable trust in perpetuity, with the income earned on the amount to be paid in support of charitable purposes on an annual basis.

However, if a donor makes such a gift in his Will, the estate trustees will be obligated to hold the capital of the charitable trust in perpetuity. Unless specifically provided for by the terms of the charitable trust, the estate trustees of the donor’s estate cannot unilaterally amend the provisions of the charitable trust to allow for the capital of the charitable trust to be distributed.  Instead, in such situations, an application to court to vary the provisions of the charitable trust will be necessary. 

Perpetual testamentary charitable gifts may be appropriate in certain circumstances, but a donor may wish to canvass potential charitable beneficiaries before making such a gift in order to ascertain what manner of testamentary gift would best suit their long-term needs.  Furthermore, donors may wish to consider adding some flexibility to the terms of the charitable trusts that they establish in their Wills in order to allow for ease of administration in the future when circumstances change.



About Laura West