One of the advantages of creating a charitable trust is that it allows you to continue to fund worthy causes in perpetuity. However, problems can arise specifically because of the enduring nature of a trust. Due to changes in circumstances over time, it may become impossible, impractical or even illegal to fulfill your stated intentions through your charitable trust.
According to National Paralegal College, the court may apply the cy pres doctrine in a situation like this. The term comes from French, and it means “as near as possible.” Therefore, if the court applies the cy pres doctrine, it may decide that the trust you established can benefit another charity or cause that is similar to the one you originally designated. There are two findings the court must make before it can apply the cy pres doctrine.
General charitable intent
The court must find that you had a general charitable purpose in mind when creating the trust rather than intending to limit your gift to one particular entity regardless of the circumstances. It is rare for courts to find that your intent was restrictive in its scope. However, if you were to include language that sets specific limitations as to the proper uses of your gift, the court would not be able to apply the cy pres doctrine.
Designated purpose frustrated or fulfilled
The purpose of your trust becomes frustrated when the charity no longer exists or it is no longer possible or practical to fund it. For example, if you were to create a trust to support your local community theater and it eventually burned down, that might be an example of frustration of your purpose. In a situation like this, the court may apply the cy pres doctrine to fund rebuilding efforts or a similar theater.
It is also possible that your designated purpose may reach fulfillment. For example, if you were to create a trust to fund research into a particular disease and researchers eventually find a cure, that represents the fulfillment of your purpose in creating the trust. If there are still funds left over, the court may apply the cy pres doctrine to fund research into a similar disease.
