How the Cy Pres doctrine may help to save charitable trusts

In California, some people would like to leave money to charities in their estate plans. They are able to do so by establishing charitable trusts. These are trusts that have charitable purposes in order to benefit the public good in some way. Examples of charitable purposes might include education, religion, poverty relief, to benefit cities and others.

While charitable trusts are designed to provide benefits for lengthy periods of time, there are some cases in which it is no longer possible to fulfill the purpose of the trust. This might occur if a trust names a specific educational institution as its trust beneficiary, and the institution later closes its doors. In order to prevent this problem, the Cy Pres doctrine allows the court to modify trusts so that they can continue to fulfill their charitable purposes.

If a charitable trust does not include a provision that states what should happen if the trust's purpose can no longer be fulfilled, the court can make changes to the trust in order to substitute a closely related charitable beneficiary. For example, if a trust was established to benefit a specific Baptist college that closes, a court might name a new Baptist college as the trust's beneficiary.

Individuals who would like to establish charitable trusts to fulfill specific charitable purposes might benefit by seeking guidance from an experienced estate planning lawyer. The attorney may help to set up the trusts so that they can continue to offer benefits for generations. He or she may also talk to their client about addressing situations in which their stated charitable purposes can no longer be fulfilled. Including such a provision may allow the grantors to control where their money will go if it becomes impossible to continue fulfilling the trust's state

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On behalf of The Elder and Disability Law Firm, APC posted in trusts & trust administration on Monday, July 8, ...
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