What Qualifies as a Charitable Purpose
Charitable trusts occupy a unique space in Arizona trust law. Unlike a typical family trust that names specific individuals as beneficiaries, a charitable trust exists to serve a broader public purpose. Arizona gives settlors wide latitude in defining that purpose.
A charitable trust may be created for the relief of poverty, the advancement of education, religion or science, the promotion of health, governmental or municipal purposes or other purposes, the achievement of which is beneficial to the community, or for the support of one or more organizations that have the purposes prescribed in this section exclusively.
A.R.S. § 14-10405(A)The list is broad by design. Education, science, health, poverty relief, and community benefit all qualify. A charitable trust can also be set up to support organizations that serve these purposes. This flexibility allows families to build charitable giving into their estate plan in a way that reflects their values.
When the Court Steps In
Sometimes a settlor creates a charitable trust with a general charitable intent but does not specify which organization or cause should benefit. When that happens, the court has authority to choose a purpose or beneficiary consistent with what the settlor would have wanted.
If the terms of a charitable trust do not indicate a particular charitable purpose or beneficiary, the court may select one or more charitable purposes or beneficiaries. The selection must be consistent with the settlor's intention to the extent it can be ascertained.
A.R.S. § 14-10405(B)Arizona also gives the settlor standing to enforce a charitable trust. This means the person who created the trust can go to court to make sure the trustee is using the funds as intended. That right of enforcement adds an important layer of accountability to charitable trust arrangements.
