Charitable trusts/cy pres Flashcards
A charitable trust must have a
charitable putpose such as: education or the relief of poverty
Charitable trusts unlike private trusts cannot have
ascertainable beneficiaries
Bc a charitable trust does not have ascrtainable beneficiaries
the state attourney general is the traditional enforcer of fiduciary adn other trust law duties
Charitable trusts can be modified through
deviation and through the cy pres doctrine
A charitable org must serve
a charitable purpose
UPC 405 Charitable purposes
A charitable trust must be created for
types of charitable purposes
- The relief of poverty,
- advancement of education or religion
- promotion of health
- govermental or municiple puposes
- other purposes the achievement of which is beneficial to the community
UPC 405 Charitable purposes
If the terms of a charitable trust do not indicate a particular charitable purpose
the court may select one or more charitable purposes or beneficiaries
- the selection must be consistant with the settlors intention ot the extent it can be asertained
UPC 405 Charitable purposes
The settlor of a charitable trust, among others, may maintain a
proceeding to enforce the trust
Charitable trusts must be for the benefit of a
public, group, community
When a trust or gift needs modification
it is the job of the
trustee to pursue judicial modification
The cy pres doctrine allows the courts and trusts to
accomidate the shifting condition od longlived charitable trusts and gifts under certain conditions
UPC’s cy pres rules provide for modification when a charitable purpose becomes
unlawful, impractiable, impossible to achieve, or wasteful
UPC 413 Cy Pres
Except as otherwise provided in b, if a particular charitable purpose becomes unlawful, inpractiabe, impossible to achieve, or wasteful:
- the trust does not fail, in whole or in part
- the trust property does not revert to the settlor or the settlors successors in interest, and
- the court may apply cy pres to modify or terminate the trust by directing that the trust property be applied or distributed, in whole or in part, in a manner consistent with teh settlors charitable purposes
Courts will grant cy pres modification requests based on impossibility when it is
litterly impossible to carry out the terms of the trust or gift
charitable trusts
UTC has a presumtion of
charitable intent
Impracitability
Cy pres may be applied, even if it is possible to carry out the particular purpose of the settlor, if
to do so would bot be accomplish the settlors charitable objective or would not do so in a reasonble way
ex. terms cannot be carried out without substantial burdern to the institution or substantial impairment of the charitable purpose
A party seeking cy pres relief can establish impracicability only if it demonstrates that it would be
unreasonably difficult, and that it is not viable or feasible, to carry out the current terms and conditions of the trust
cy pres may be appropriate when it becomes wasteful to
apply all of the property to the designated purpose,
cy pres
wasteful means
there is either too little or too much money in the trust for the assets to be used efficiently
Ct can apply cy pres when testator had a
specific charitable intent not general charitable intent
Charitable trusts
UPC presumes what type of intent
general intent
When a chairitable trust how do you modify
look to cy pres first
When a trust leave remainder to chairty
it is a charitable trust
If chairtable trust becomes unlawful, unpractiable, etc. the trust does not
fail
ct can use cy pres to modify
