Sometimes the generous purposes for which a trust is created are no longer possible or practical. For instance, a testamentary trust may be created to support a particular congregation but as is often the case, however, that congregation may eventually close or merge with another church.[1] When that happens, trustees are often placed in difficult situations as they may no longer be able to effectively carry out their fiduciary duties. Thankfully, trustees and churches are not left without recourse in this situation—enter the doctrine of Cy Pres, which takes its name from the French phrase “cy près comme possible” meaning “as near as possible.”[2]
Although the doctrine has ancient roots it has received only modest academic attention modernly.[3] Yet, there is some evidence to suggest that courts are increasingly more likely than ever to apply this doctrine.[4] Generally, courts will do what they can to ensure that a trust will not fail for lack of a valid purpose.[5] Courts may therefore apply the doctrine of cy pres assuming certain conditions have been met.[6] These conditions include: 1) the existence of a valid charitable trust, 2) that is established to be impossible or impractical, and 3) the existence of “general” charitable intent.[7] Modern courts appear to be flexible in their application of the doctrine and have loosened their interpretation of these conditions.[8] Once cy pres is deemed appropriate courts will allow the terms of a trust to be modified so that funds may be directed to a purpose that closely approximates the intention of the trust settlor.[9]
For churches and other entities managing trusts for purposes that may be obsolete, applying to the court to amend a trust’s purpose through the application of cy pres can be an effective way to ensure that generous gifts for religious or charitable purposes do not go to waste. If you are a trustee or beneficiary of a religious or charitable trust, the attorneys at Dalton & Tomich would be happy to speak with you to ensure that your strategic objectives are properly met.
[1] See, e.g., In re Dillenback’s Will, 74 N.Y.S.2d 473 (Sur. Ct. 1947).
[2] Christopher J. Ryan, Jr., An Historical and Empirical Analysis of the Cy-Près Doctrine, 48 ACTEC L.J. 289, 290 (2023).
[3] Id. at 291.
[4] Id.
[5] See In re Rood’s Estate, 200 N.W.2d 728, 738 (Mich. App. 1972).
[6] Restatement (Second) of Trusts § 399 (1959) (explaining the conditions for applying Cy Pres, “[i]f property is given in trust to be applied to a particular charitable purpose, and it is or becomes impossible or impracticable or illegal to carry out the particular purpose, and if the settlor manifested a more general intention to devote the property to charitable purposes, the trust will not fail but the court will direct the application of the property to some charitable purpose which falls within the general charitable intention of the settlor.”).
[7] In re Rood’s Estate, 200 N.W.2d at 735.
[8] See Ryan, supra note 2, at 305; see also Evelyn Brody, The Legal Framework for Restricted Gifts: The Cy Pres Doctrine and Corporate Charities 5 (2004) (“[a]lthough the trend is not universal, recent years have brought a broadening of the circumstances under which these doctrines are applied and modification granted.”).
[9] Restatement (Second) of Trusts § 399 (1959).
