What is an Honorary Trust?

The so-called purpose trust in Anglo-American law refers to a trust in which there is no beneficiary or the beneficiary cannot be identified. It is also called an imperfect obligation trust or honorary trust, because the establishment of such a trust does not set legally enforceable obligations on the trustee, and can only rely on the trustee's Morality and reputation.

Purpose trust

Right!

The so-called purpose trust in Anglo-American law refers to a trust in which there is no beneficiary or the beneficiary cannot be identified. It is also called an imperfect obligation trust or honorary trust, because the establishment of such a trust does not set legally enforceable obligations on the trustee, and can only rely on the trustee's Morality and reputation.

Early English law did not recognize purpose trusts because they had no charitable purpose or private beneficiary, and no one could enforce the trust. One of the main theoretical bases against object-based trusts is the so-called beneficiary principle, which is also known as the no purpose trusts rule. This rule is related to the "certainty of ob-jects" in the trust's "threecertainties" requirement: if a trust has only an abstract purpose, it cannot determine a clear object, and No one can insist that the court order the trustee to implement the trust. It also means that only the beneficiaries can enforce the trust. This principle also runs parallel to the principle of relativity of the contract: only the right holders on the trust can enforce the trust. Similarly, in traditional U.S. trust law, a non-public interest trust that does not have a beneficiary is generally invalid, and a person who accepts the transfer of property (if the trust is valid, the trustee) can Use the property for the purpose determined by the client. However, if the property is not disposed of for this purpose, the property must be returned to the client (constituting a "resulting trust").

Anglo-American law has confirmed the purpose trusts through some jurisprudence, and many jurisdictions have recognized these purpose trusts through statutory law, and there is a tendency to actively identify the purpose trusts. For example, according to the Jersey Trust Law, which is well-known in the offshore trust market, if there is an enforcer that can supervise and enforce the trustee's performance of the trust terms, there is no non-profit purpose for the beneficiary. Trusts are also valid.

Technically, non-profit trusts are also purpose trusts, but we usually just call them

1 Zhao Lianhui. A Comparative Study of the Purpose Trust SystemTaking the Japanese "Trust Law" as a Reference. The Journal of Law [J], 2011, (8). ^[1]