Cy pres concept: when is it used in charitable trusts?

Cy pres concept: when is it used in charitable trusts?

• A. Cy pres allows courts to modify charitable trusts to approximate the settlor’s intent when the original objective cannot be achieved.
• B. Cy pres terminates a charitable trust automatically after a set period.
• C. Cy pres transfers assets to non-charitable beneficiaries when the charity fails.
• D. Cy pres doubles the distributions to beneficiaries.

Answer: (A)

Cy pres is about preserving charitable intent when the original objective can’t be achieved. When circumstances change and a charitable gift can’t carry out its stated purpose, a court steps in to modify the trust so the funds still serve a charitable aim that is as close as possible to what the settlor intended. It keeps the gift within the realm of charity rather than ending the trust or transferring funds to private beneficiaries, and it isn’t about simply boosting distributions. For example, if a designated program becomes impossible, cy pres allows redirecting the funds to a similar charitable program serving a comparable community need.

Cy pres is about preserving charitable intent when the original objective can’t be achieved. When circumstances change and a charitable gift can’t carry out its stated purpose, a court steps in to modify the trust so the funds still serve a charitable aim that is as close as possible to what the settlor intended. It keeps the gift within the realm of charity rather than ending the trust or transferring funds to private beneficiaries, and it isn’t about simply boosting distributions. For example, if a designated program becomes impossible, cy pres allows redirecting the funds to a similar charitable program serving a comparable community need.