Legal Definitions - cy pres: charitable trusts

The legal doctrine of cy pres applies to charitable trusts and literally means "as near as possible." It is invoked when the original, specific charitable purpose of a trust becomes impossible, impractical, or illegal to fulfill.

Instead of allowing the trust to fail and its assets to revert to the settlor's estate (or be distributed otherwise), a court can modify the trust's purpose. The court will direct the funds to a new charitable use that is "as near as possible" to the original intent of the person who created the trust (the settlor), thereby preserving the charitable nature of the gift.

Here are some examples illustrating how cy pres might be applied:

• Example 1: Obsolete Purpose

  A wealthy individual establishes a trust in 1930 to fund annual scholarships for students pursuing a degree in "telegraphy and Morse code operation." By the 21st century, telegraphy is an obsolete profession, and no educational institutions offer such a degree.

  How cy pres applies: A court, applying cy pres, would likely redirect the scholarship funds to support students studying modern communication technologies, such as computer science, telecommunications engineering, or digital media. This new purpose is "as near as possible" to the settlor's original intent of promoting education in cutting-edge communication methods, even though the specific technology has changed.

• Example 2: Non-existent Beneficiary Institution

  A will creates a charitable trust to provide ongoing financial support for "The St. Augustine Orphanage for Boys," a specific institution that existed at the time the will was written in 1960. Decades later, due to changes in child welfare policies, The St. Augustine Orphanage for Boys has closed, and its facilities have been repurposed into a community center.

  How cy pres applies: A court would use cy pres to identify a new beneficiary. It might direct the trust funds to another local organization that provides care, education, or support for disadvantaged children, or perhaps to a program within the former orphanage's building that still serves youth, thereby honoring the settlor's general charitable intent to help vulnerable boys, even though the specific institution no longer exists.

• Example 3: Impractical Method or Asset

  A trust is established in the early 1900s to maintain a specific "public watering trough for horses" in the center of a growing town. Over time, horses are replaced by automobiles, and the watering trough becomes an unused, potentially hazardous obstruction in a busy intersection.

  How cy pres applies: A court could apply cy pres to modify the trust's purpose. Instead of maintaining an obsolete watering trough, the funds might be used to maintain a public park fountain, contribute to urban green spaces, or support public art installations in the town square. This keeps the spirit of providing a public amenity and beautifying the town, which was the broader charitable intent behind the original, more specific purpose.