Trusts: Charitable Purposes, Cy Pres

Question 1

Charitable Trust Beneficiaries

Answer 1

Must have a sufficiently large or changing group of beneficiaries so that the actual beneficiary is the public or community at large.

Indefinite beneficiary required, not a specific individual

Question 2

Charitable Purpose

Answer 2

The court has the discretion to determine whether a charitable purpose exists (considers the totality of the facts to determine whether a charitable purpose exists).

However, certain purposes are immediately recognized as charitable:
- Education,
- Poverty,
- Health,
- Government,
- Religion

Question 3

When can you Apply Cy Pres

Answer 3

1. Charitable trust
2. Purpose accomplished, impractical or impossible
3. GENERAL charitable intent (broadly interpreted intent- court can admit extrinsic evidence to determine this)

Question 4

Cy Pres Definition

Answer 4

Apply when charitable trust’s purpose has been accomplished or becomes impossible or impractical to carry out.

If the court determines the trustor had a GENERAL CHARITABLE INTENT, the court CAN apply the doctrine of cy pres to alter the charitable purpose or beneficiary to remain as true to the trustor’s original goal as possible.

If the court finds that the trustor has a SPECIFIC CHARITABLE INTENT, the court likely cannot apply Cy Pres (trust property will return to the trustor’s estate.)

Remember: Cy pres permits the court to modify the
charitable purpose but does not require the court to
do so