Charitable Trusts & The Doctrine of Cy Pres

In order to invoke the cy pres doctrine, the moving party must establish three elements to the Court.  First, they must show the Court that the Settlor of the trust manifested or expressed a general charitable intent in the trust instrument.  So, what constitutes general charitable intent?  The Settlor must have intended to devote the trust property to charitable purposes broadly, rather than to a specific charitable purpose that, if achievable, would cause the trust to fail entirely.  General charitable intent can be identified by the nature of the gift and the Settlor’s awareness of potential changes in circumstances.  Establishing a general charitable intent of the Settlor is crucial because it indicates that the Settlor would prefer that the trust would continue to serve charitable purposes even if the specific named charitable entity is not no longer in existence, or the specific purpose cannot be fulfilled.  

Second, the moving party in a cy pres action must show that the charitable distribution from the trust has become illegal, impossible, or impractical to fulfill.  If the charity or stated reason for the charitable gift lapses or is no longer in existence at the time of the distribution, it arguably fails.  Courts and lawmakers across the country generally favor charitable gifts, and the law has evolved over time to support charitable giving and the Courts tend to liberally construe charitable giving clauses in wills and trust instruments.

Third, it must be shown that the Settlor did not provide for an alternative disposition of the trust property in the event that the specific charitable trust distribution fails. If a trust simply names a charitable organization as beneficiary and does not name any alternates or does not articulate an alternate scenario if the intended bequest fails, then the Court must find a charity as near as possible to the named charity or otherwise equitably distribute assets according to the general intent of the trust instrument.