Definition
The term honorary trust refers to an arrangement that does not identify a human being or charitable organization as a beneficiary. Honorary trusts are typically established to care for a pet or the maintenance of an asset.
Explanation
Honorary trusts derive their name from the fact the wishes of the donor do not include a beneficiary that can legally enforce the terms of the agreement. These types of trusts rely on the "honor" of the trustee; they are not enforceable by statute. However, if the trustee does not fulfill their obligation to the donor, and they possess assets of the donor, then the donor's heirs have a right to the assets. This is referred to as a resulting trust.
Jurisdictions that allow for honorary trusts typically specify they can be used for two purposes: the care for the donor's pet, and to provide for the maintenance of an asset like a cemetery plot. For example, an honorary trust may provide funds for the care of graves, the building of a monument, the care of a pet (such as a dog, cat, or horse), and even the saying of mass in church.
Even in jurisdictions that allow honorary trusts, the purpose of the trust cannot be whimsical or unstructured. It must be established for a very specific, and legal, purpose and the duration of the trust must have a limit.
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