Legal Definitions - cy pres doctrine

The cy pres doctrine is a legal principle that allows courts to redirect charitable gifts or trusts when the original purpose or beneficiary cannot be fulfilled exactly as intended. The phrase "cy pres" comes from French and means "as near as possible." Instead of letting a charitable gift fail entirely, a court can apply this doctrine to find an alternative purpose or recipient that aligns as closely as possible with the donor's original charitable intent.

This doctrine ensures that the philanthropic spirit of a donor is honored even if unforeseen circumstances make the original plan impossible or impractical. It also applies in certain situations involving unclaimed funds from class action settlements, directing them to related charitable causes.

• Example 1: Obsolete Charitable Purpose

  A wealthy benefactor established a trust in the 1930s to fund research into a specific, now-rare tropical disease that was prevalent at the time. Decades later, medical advancements have largely eradicated the disease, and the original research institution has shifted its focus. If the trust's original terms are too narrow to allow for other uses, a court applying the cy pres doctrine might redirect the funds to a foundation researching other neglected tropical diseases or a broader infectious disease research center. This ensures the donor's general intent to combat disease through research is still fulfilled, even if the specific target has changed.

• Example 2: Non-Existent Charitable Beneficiary

  A will specifies that a substantial portion of an estate should go to "The Old Town Historical Society," a small, local organization dedicated to preserving the town's history. However, by the time the will is probated, the Old Town Historical Society has dissolved due to lack of funding and its collection has been absorbed by the larger, county-wide historical museum. Rather than letting the charitable bequest fail, a court could apply the cy pres doctrine to award the funds to the county historical museum, or perhaps to a newly formed local heritage group, as these entities are "as near as possible" to the original intent of supporting local historical preservation.

• Example 3: Unclaimed Class Action Settlement Funds

  A class action lawsuit against a major electronics manufacturer for selling defective smartwatches results in a large settlement fund. After all eligible class members who submitted claims have been paid, a significant amount of money remains unclaimed because many purchasers could not be located or did not come forward. Instead of returning the money to the manufacturer, a court might invoke the cy pres doctrine to distribute the remaining funds to a consumer protection advocacy group that educates the public about product safety and consumer rights, or to an organization that provides technology access to underserved communities. This ensures the funds benefit a cause related to the underlying harm of the lawsuit, even if not directly to individual class members.