Remedies

Question 1

Cy Pres

Answer 1

If the original charitable trust fails for illegality, impracticability, or impossibility, a court may modify it under the Cy Pres doctrine to seek an alternative charitable purpose. The settlor’s intent controls.

To determine whether it should modify the trust, a court will analyze the grantor’s primary purpose.

If there is a SPECIFIC INTENT/PURPOSE, the court may NOT modify the trust and the trust will be terminated and become a resulting trust.

If there is GENERAL INTENT, the court WILL substitute a similar charity. The court may re-write a provision and find a charitable purpose as near as possible to the original purpose. The modern approach is to presume a general intent if the settlor’s intent is unknown.

Question 2

Failure of Trustee Duty

Answer 2

Whenever there is a breach of the trustee’s duties, the beneficiaries have several remedies. They may:

1) Ratify the transaction and waive the breach
2) Surcharge the trustee by suing for any resulting loss
3) Trace and recover the property and/or
4) Seek to discharge the trustee and replace him with another.

Lost profits, lost interests, and other losses resulting from a breach of trust are the responsibility of the trustee, and beneficiaries may sue the trustee and seek damages or removal of the trustee for breach.

Question 3

Failure of Trustee Duty - Trustee sells property

Answer 3

A beneficiary may TRACE AND RECOVER property that was sold in breach of a duty except when the purchaser is a bona fide purchaser without notice of the breach.

Question 4

Dependent Relevant Revocation (DRR)

Answer 4

DRR applies when a testator revokes a will under the mistaken belief that another disposition of property will be effective, and but for the mistake would not made the revocation. In California, The doctrine applies to revocations by subsequent instrument or physical act. When the testator gives more than the original bequest, the court can infer that there was at least an intent to give the lower amount.