| The paper focuses on essential legal issues of Charitable Trusts, and advancessubstantial viewpoints concerning the main theories of Charitable Trusts on the basisof analyzing primary theories hereof to a considerable extent, which attributes toinstitutional construction of commonweal undertaking by the way of trust.Chapter one: General of trustOn the basis of special relationship of trust and common law, the chapter hereofintends to explain the trust under the context of civil law. Firstly, the paper analyzesthe specific historic background of trust concerning how to emerge from theperspective of English history as well as ethical tradition. It goes without saying thatcommon law and equity law give birth to embryo of trust, namely, Use. Due to thecivilian wisdom collectively, the Justices who have countless relationship with church,and the unique judicial system of Great Britain, the trust system comes into beingfinally. The paper focuses on the indigenization of trust system in the civil countrieswithout deviation from the essential valve of trust system thereof, and tries to classifythe system with the reflection of analyzing the distinct functions of trust andsummarizing their characteristics respectively so as to develop reasonable trust systemconsiderably.Secondly, the paper tends to analyze the trust relations in a great degree. With thereflection of holding the essence of trust authentically, the paper tries to distinguishthe legal relationship and fiduciary relationship, which has been considered as themost primary issue of trust theory. Normally, the fiduciary relationship is traditionalmanners of common law, and the legal relationship of trust is the specific embodimentof trust under the framework of civil law system. The legal relationship of trustreflects concrete relations regulated by legislations. Generally, the legal relationshipincludes three parties, that is, settler, trustee and beneficiary. The specific parties offiduciary relationship are settler and trustee, and trustee practices the obligation forbeneficiary. Therefore, the confusion of two sorts of relationship could touch the basisof trust system and would fail to explain various theoretical issues of trust.Thirdly, as the heart of trust relations, trust property is transferred from settler totrustee who has been authorized to hold, manage and dispose the property hereof forthe interest of beneficiary. In deed, the trust is a sort of systems concerning propertymanagement, so the trust relation could not be setup without trust propertyauthentically. It is a huge problem concerning how to ensure the independence of trustproperty in the civil law system which hasn't duel ownership to accommodate theequitable rules. Otherwise the trust would lose its systematic predominance andessence at all. Under the doctrine of one property bearing an ownershipcorrespondingly, the only means to settle the problem is to establish the consummateregistration system of trust property in civil law.In a word, the aim of the chapter lies in analyzing fundamental issues of trustsystem, with the consideration of understanding the system hereof definitely andsetting a good basis for following chapters.Chapter two: Charitable trust and social development The aim of this chapter lies in how to exert the positive functions of charitable trustgreatly by the channel of analyzing the essence of charitable trust and influence ofvarious social factors in a considerable degree. Firstly, the definition and property oftrust is the main topic. Strictly, commonweal isn't same with charity completely,because commonweal reflects the real aim of trust, while charity tends to definite thepractice of settler. Furthermore, charity is of property of internality and should bereflected by the effect of practice, namely, the commonweal which owns externalityexactly. There is no common definition of charity in common law system recently.Besides reflecting the individual practice of settler, charitable trust is also consideredas a sort of social practice specially when settler transfer personal property to giventrustee for beneficiary. Due to rationality of parties' practice, the paper tends toanalyze the internal as well as external factors which influence functions of charitabletrust from the perspective of the station of charitable trust in the whole social system.Charitable trust is the optimal choice for commonweal undertaking, especiallybecause it could concern several social values such as equality, order, justice etc. Incomparison with the consortium, charitable trust owns functional predominance inseveral aspects. Firstly, efficiency, namely, charitable trust could be setup andpreserved at low cost, and the property could keep increase during it continence.Secondly, security, settler could be keep incognito, and operational matter is pettyreasonable and convenient for supervision. Thirdly, innovation, this form of trust is offlexibility and agility to a great extent. In comparison with non-charitable trust,charitable trust concern various aspects of social common interests, therefore thecorresponding legislation would be more restrict, such as the systems of compulsiveregistration, permissive setup. However, charitable trust still keeps and reflects thebasic value of trust system, namely, the individual freedom.Furthermore, the paper analyzes the influence of religion to charitable trust. As forcharitable trust, religion is the most significant characteristic of civilization, andalways plays a role as the heart of civilization in the past and in recent. As originalform of trust, charitable trust comes from Britain and develops with deep brand ofreligion. The embryo of charitable trust is Use, which came from the estate donationof church. As the main origin of equality law, individual salvation and social salvationare basic aim of church law which is pretty similar to the value and social aim ofcharitable trust, though various religions have distinct social objects. Therefore,advocating the religious undertaking is one of fundamental aims of charitable trust.The author tends to analyze the orientation of charitable trust in the whole aspectsby the way of value analysis. The basic orientation of trust value is equality and order.There is no denying fact that social equality is the optimal value of society, and orderis considered to ensure this value. By the channel of functionalism, the balance ofwhole society means to make social order become perfect state comparatively, and agood social order is common pursuit of charitable trust and social commonweal.In common law countries, especially Britain and American, the system of charitabletrust is rather mature, and corresponding legislation as well as institutions are alsoconsummate and perfect greatly. Charitable trust in common law countries improveswith development of society and has a good social effect normally. As for civil law countries, for example Japan, charitable trust couldn't have great social influence dueto several factors such as social tradition, difficult conformity of institutions andshort-term period etc. The experience of charitable trust in Japan reveals the fact thatcorresponding measure and good environment is supposed to be more important thanthe setup of system comparatively. Moreover, propagandizing domination ofcharitable trust and enhancing the favorable measures could inspire people to take partin the commonweal undertaking by the way of trust.Chapter three: the establishment of charitable trustThe paper tries to discuss various factors influencing the establishment ofcharitable trust, and introduce legislative orientation of countries world-wide.First of all, the paper researches the influence and preferential tax for charitabletrust. Besides principles of benefit and capability, the new principle should beconfirmed as well, that is, the principle of helpfulness, which means correspondingpreferential tax should be fit with the degree of helpfulness where the practice oftaxpayer benefits the society. The basic theory of principle of benefit lies in the factthat taxpayer would benefit from public resources, while the foundation of principleof helpfulness lies in the fact that the practice of taxpayer could benefit the wholesociety. With the aim of public interest, charitable trust would increase publicresources and benefit social commonweal undertaking. Undoubtedly, charitable trustenables the authority to save the cost of management and administrative affairs by theway of putting fund and material to develop social commonweal undertaking directly.Therefore, the authority should endow charitable trust various favorable treatmentespecially the preferential tax policy, because tax policy would have direct influenceto the development of charitable trust considerably. Britain and American tax policy isrelatively reasonable and sound, which is of referential value for civil law system.One sort of trust should have definite trust aim which means the object of settlersetting up a trust. Trust aim is the cause of establishing trust and persuasion of settler,which is reckoned as the rule of practice for trustee and the reason for beneficiary toenjoin benefit from trust. The definition of trust aim concern the establishment of trust,that is, indefinite trust aim could result in the failure of establishment of trust. Becausecharitable trust should be supervised by the supervisor department of commonwealundertaking so as to ensure the practice of trustee to follow real purpose ofcommonweal, the specific aim of charitable trust maybe rather abstract and broad to aconsiderable extent. Both common law system and civil law system, the legislationtends to regulate the aim of charitable trust by the way of enumeration adding withgeneralization. From the perspective of legislation, the trust aim of public interest isthe key factor to define a charitable trust exactly. For public interest, the legislationcould generalize several basic conditions to restrict the non-private trait, such asvalidity, essentiality, reasonability etc.Charitable trust is a sort of trust established by manners of contract, will anddeclaration, and trust by the manners of contract and declaration is living trust. Anymanner of trust should make clear its commonweal aim of trust. Common law systemadopts Criterion doctrine, by which the applicant for establishment registration shouldmeet corresponding legal conditions without applying for special authorization of the authority. For civil law countries, the legislation adopts the permission doctrine, bywhich the authority would supervise the substantial issues of application and thenmake decision on whether to authorize applicants the right to registration or not.Normally, permission doctrine is unreasonable due to increasing cost of establishmentfor charitable trust.Chapter four: operation and supervisionFirstly, bearing the operation of charitable trust, trustee plays a significant role intrust in reality. On the basis of faith, settler transfers his property to trustee fordisposition, and trustee executes the practice for beneficiary under restriction ofspecific aim of commonweal. The choice of candidate, the qualification of trustee tomanage trust property and the character of faith would determine the success ofcharitable trust. Therefore, trustee should bear strict obligation of faith, namely,obligation of loyalty and caution. Specifically, obligation of loyalty refers to theadministrant should execute obligation from the most interest of beneficiary, andobligation of caution emphasizes that trustee should be a common wiser in a similarsurrounding to manage trust property cautiously and technically. In comparison,majority of civil law countries tend to define it as the obligation of virtuous manager,which has obvious deficiency such as abstractness, lack of specific operationalregulations and less strict requirement for trustee.Secondly, due to failure of establishment or aim of trust, the property ofnon-charitable trust might belong to settler. As for charitable trust, the legislationadopts the Cy-Près doctrine and regulates the property should be used for othercharity aim most similar to the original aim of settler. Considering the loss of publicinterest if trust aim is fail or inexistent, the Cy-Près doctrine tries to find othercommonweal aim most similar as a relief manner. The civil law countries just adoptthis doctrine with special condition of termination of trust and no beneficiary. TheCy-Près doctrine owns the function of salvation for commonweal undertaking. Underthis condition, the new trust aim should be of public interest and have optimalsimilarity with the original. Moreover, the property should be preserved forcommonweal. Applying this doctrine should fit three conditions, that is, obvious aimof public interest or the authorized commonweal organization, the failure of charitabletrust, and having common charity purpose if it is the first failure.Thirdly, as unique system of civil law, trust supervisor, namely trust manager, is thenominee of beneficiary to supervise trustee in special conditions. They are called astrust manager in Japan and Korea, but as trust supervisor in Taiwan and Mainland ofChina. In reality, the right of trust supervisor is more a sort of supervisal right than themanaging right, because trust supervisor doesn't own the right to manage exactly, andthe name of manager would invoke unnecessary mistake. The execution of trustsupervisor concerns the matter of trust, specifically, that relates the interest ofbeneficiary by the way of supervising trustee, and could ensure the power ofsupervisor as well as the independent right of operation for trustee. Generally, trustsupervisor should not interfere to the normal practice of trustee to manage and disposetrust property. Therefore, the authority of right and restriction of power is both ofgreat importance. Finally, not only common law system but civil law countries, the legislators haveregulated rather strict supervision rules. Because of distinct national system and legaltradition, they adopt different supervision modes recently. For example, British set upspecial institution, charity commission, to supervise trustee, while the prosecutingattorney executes supervision in USA. The common practice in civil law is toauthorize administer department of commonweal undertaking to supervise trustee, sothis mode is same with consortium considerably. The paper develops new viewpointsthat ideal supervision mode should have the doctrine of setup, the theory concerningsupervisor playing as protector of public interest, and should establish specificinstitution for supervision.Chapter five: Reality and ideal: construction of charitable trust in ChinaThe chapter focuses on the analysis of recent situation and cause of our charitabletrust system, and tends to develop reasonable suggestions on how to construct thislegal system in a significant degree.On the basis of relationship and comparison between charitable trust and fundfoundation, the paper tries to invest the most reasonable means for our commonwealundertakings to adopt finally. In reality, the social donation to the commonwealundertakings is more by the channel of fund foundation mainly than by the way ofcharitable trust owning the unique predominance exactly. It is common sense thatfund foundation is a sort of consortiums in civil law countries, while in common lawsystem, fund foundation is regarded owning two forms, namely, the non-profitedcorporate and charitable trust. In China, fund foundation, normally, is a kind ofconsortiums. The primary issues for our system lie in following aspects. Firstly, theattribute of donation is rather indefinite and misused. Secondly, the supervision ofrunning management isn't impelling exactly. Thirdly, the management system of fundfoundation in China is pretty unreasonable. In contrast, charitable trust owns severaladvantages as follow, such as convenient and flexible establishment, efficientmanagement which contributes to save management cost, reasonable supervisionsystem for scrimshankers, high qualification and strict obligation for trust manager topreserve the property etc.From the perspective of high education undertaking in China, the paper probes intothe possibility and reality of commonweal undertakings' construction by the channelof trust system in the whole, because character of charitable trust goes with commondoctrine of education undertaking correspondingly. The common doctrine adopted bymajority of countries worldwide means that the education chance should be providefor total social members to enjoy. The specific meaning for high educationundertaking to adopt the form of charitable trust lies in various aspects normally. Indetail, this form could be propitious to the reality of educational equal and systematicreform of educational management to ensure the self-determination of high schools.Moreover, the mature supervision system could boost activity of high school to avoidmisusing the right to self-determination. By the way of charitable trust, the societycould have pretty good chance to participate the high education undertakings.On the level of specific construction, the author advances following suggestions, that is, the centre government and provincial authority should play as the settler,council high school is trustee normally, and educational department should be trustsupervisor exactly. In a word, the successful construction of charitable trust in Chinashould lie in the systematic reform of high education undertaking.
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