What type of trust is created when a trust stipulates payments to children upon graduation or to a university?

The trust described in the scenario is designed to provide payments to children upon graduation or to a university, which indicates that it serves a charitable purpose. A valid charitable trust is established specifically for the benefit of a charity, and in this case, the payments directed towards a university can be seen as fulfilling that purpose. Charitable trusts are subject to specific rules that ensure they operate in furtherance of charitable goals, and they enjoy certain tax benefits under the law.

Additionally, the focus on education, whether through disbursement to children for educational milestones like graduation or directly to a university, aligns well with the traditional objectives of charitable giving. This creates a pathway for the trust to be classified as a charitable trust, as it contributes to public welfare and education.

In regards to understanding the other options, a valid spendthrift trust typically restricts the beneficiary’s ability to transfer their interest in the trust, which doesn't apply here, as the trust is focused on providing payments for specific educational achievements. A revocable trust allows the grantor to alter or dissolve the trust during their lifetime, but that is irrelevant when considering the nature of the payments stipulated. An invalid trust would not meet the legal requirements to be recognized, which is not aligned with the scenario given that