By nature, charitable trusts pose two difficulties: 1) indefiniteness of beneficiaries; and 2) objections based on the rule against perpetuities. SeeMiller v. Mercantile Safe Deposit & Trust Co., 224 Md. 380, 385-86 (1961). Section 14-301 was purposed to address these difficulties. See id. at 386 (“[T]he statute was intended to and did provide a method by which charitable bequests that had failed might be distributable “as nearly as possible” in a manner that would carry out the intention of the testator.”). Prior to this statutory enactment, the common law ruled over charitable trusts in Maryland. Under common law, an unincorporated devisee could not receive a testamentary gift because it was not an “artificial person created by the law, and its membership not being certain and definite, and the courts of this state having no jurisdiction to enforce charitable uses under the statute of 43 Elizabeth, or apart from its provisions.” Reisig v. Associated Jewish Charities, 182 Md. 432, 442 (1943) (citations omitted).
The law governing charitable trusts is as follows:
- Courts of equity have full jurisdiction to enforce trust for charitable purposes upon suit of the State by the Attorney General or suit of any person having an interest in enforcement of the trust.
- “Charitable purposes” includes all purposes within either the spirit or letter of the statute of 43 Elizabeth 4 (1601), commonly known as the statute of charitable uses.
- A charitable trust shall not be held invalid or unenforceable merely because the beneficiaries of the trust constitute an indefinite class.
Md. Code Ann., Est. & Trusts § 14-301. Significantly, the § 14-301 specifically adopts the statute of Elizabeth. The incorporation of the statute of Elizabeth is necessary because charitable trusts have indefinite beneficiaries.[1] The statute of Elizabeth enumerates some of the established purposes for which a charitable trust may be established, including: relief of the aged, relief of poverty, advancement of education, advancement of religion, promotion of health and other broad-based community purposes. The purpose requirement prohibits trusts for non-charitable uses. See, e.g.,Shenandoah Valley Nat’l Bank v. Taylor, 63 S.E.2d 786 (Va. 1951) (setting aside a trust that directed payments to school children but was not tied to advancement of education, alleviation of poverty, or any other recognized charitable purpose.) Section 14-301 also ensures that a charitable trust is not be invalidated simply because the beneficiaries are indefinite. See, e.g.,Rabinowitz v. Wollman, 174 Md. 6 (1938) (upholding as valid a testamentary gift to “such religious, charitable, scientific, literary or educational Hebrew Corporations or associations organized and operated exclusively for such purposes as may be selected by my Executors”).
[1] As legal scholars have noted, the indefiniteness of beneficiaries should not be an objection to a charitable trust but a requirement for a charitable trust. George G. Bogert, George T. Bogert & William K. Stevens, The Law of Trusts and Trustees § 363 (2d ed.1977).
