Tennessee § 35-15-405 - Charitable purposes — Enforcement.

§ 35-15-405. Charitable purposes — Enforcement.

A charitable trust may be created for the relief of poverty, the advancement of education or religion, the promotion of health, governmental or municipal purposes, or other purposes the achievement of which is beneficial to the community. If the terms of a charitable trust do not indicate a particular charitable purpose or beneficiary, the court may select one (1) or more charitable purposes or beneficiaries. The selection must be consistent with the settlor's intention to the extent it can be ascertained. The settlor of a charitable trust, among others, may maintain a proceeding to enforce the trust. Acts 2004, ch. 537, § 27. Textbooks. Tennessee Jurisprudence. 6 Tenn. Juris., Charities, §§ 11, 22. Section Comment. Unless provided otherwise hereinafter, any reference to “section,” “subsection” or “subdivision” means all, or such portion of, T.C.A. § 35-15-405 . Under the Tennessee Uniform Trust Code, the law relative to charitable trusts diverges somewhat from the Uniform Trust Code and the restatements. To the extent this section or other provisions of the law concerning charitable trusts under the Tennessee Uniform Trust Code is in conflict with the Uniform Trust Code, any restatement or any other foreign law, such foreign law is not precedential or controlling and is rejected by the Tennessee Uniform Trust Code. The required purposes of a charitable trust specified in subsection (a) restate the well-established categories of charitable purposes listed in Restatement (Third) of Trusts § 28 (Tentative Draft No. 3, approved 2001), and Restatement (Second) of Trusts § 368 (1959), which ultimately derive from the Statute of Charitable Uses, 43 Eliz. I, c.4 (1601). The directive to the courts to validate purposes the achievement of which are beneficial to the community has proved to be remarkably adaptable over the centuries. Charitable trusts are subject to the restriction in T.C.A. § 35-15-404 that a charitable trust purpose must be legal. Unlike the Uniform Trust Code, T.C.A. § 35-15-404 does not require that a trust purpose not be contrary to public policy. See the section comment to T.C.A. § 35-15-404 for the effect of this under the Tennessee Uniform Trust Code. Under subsection (b), a trust that states a general charitable purpose does not fail if the settlor neglected to specify a particular charitable purpose or organization to receive distributions. The court may instead validate the trust by specifying particular charitable purposes or recipients, or delegate to the trustee the framing of an appropriate scheme. See Restatement (Second) of Trusts § 397 cmt. d (1959). Subsection (b) of this section is a corollary to T.C.A. § 35-15-413 , which states the doctrine of cy pres. But note that, a courts ability to apply cy pres under T.C.A. § 35-15-413 is subject to a stricter standard that that afforded by the Uniform Trust Code. Under T.C.A. § 35-15-413, a trust failing to state a general charitable purpose does not fail upon failure of the particular means specified in the terms of the trust. However, the court must instead apply the trust property in a manner that fulfills as nearly as possible the settlor’s charitable intent and purposes to the extent they can be ascertained. On the other hand, the Uniform Trust Code only requires that the court apply the trust property in a manner consistent with the settlor’s charitable purposes to the extent they can be ascertained. The language of the Tennessee Uniform Trust Code contained in T.C.A. § 35-15-413 is designed to restrict, to the greatest extent possible, the likelihood that application of trust property strays far from a settlor’s intent, to the extent it can be ascertained, and therefore results in an application in favor of some watered down, vague and general charitable purpose. See section comment T.C.A. § 35-15-413 for a further discussion. Subsection (b) does not apply to the long-established estate planning technique of delegating to the trustee the selection of the charitable purposes or recipients. In that case, judicial intervention to supply particular terms is not necessary to validate the creation of the trust. The necessary terms instead will be supplied by the trustee. See Restatement (Second) of Trusts § 396 (1959). Judicial intervention under subsection (b) will become necessary only if the trustee fails to make a selection. See Restatement (Second) of Trusts § 397 cmt. d (1959). Pursuant to subsection T.C.A. § 35-15-110 , the charitable organizations selected by the trustee would not have the rights of qualified beneficiaries under the Tennessee Uniform Trust Code because they are not expressly designated to receive distributions under the terms of the trust. However, it is possible that a trust advisor or trust protector might have such rights, as well as the right to enforce the trust. Contrary to Restatement (Second) of Trusts § 391 (1959), subsection (c) grants a settlor standing to maintain an action to enforce a charitable trust. The grant of standing to the settlor does not negate the right of the state attorney general to enforce either the trust and relevant interests thereto. For the law on the enforcement of charitable trusts, see Susan N. Gary, Regulating the Management of Charities: Trust Law, Corporate Law, and Tax Law, 21 U. Hawaii L. Rev. 593 (1999) . Under the Tennessee Uniform Trust Code, a trust advisor or trust protector, given the power to do so, may also seek to enforce a charitable trust or for the application of cy pres.