Legal Definitions - doctrine of approximation

The doctrine of approximation is a legal principle that allows a court to make minor adjustments to how a trust is managed. This power is exercised when the original instructions for the trust's administration have become impractical, impossible, or extremely difficult to follow precisely. The court's primary goal in applying this doctrine is to preserve the trust's overall viability and ensure that the fundamental intentions of the person who created the trust (the donor or settlor) can still be achieved, even if the exact methods originally specified cannot be.

Here are some examples of how the doctrine of approximation might apply:

• Investment Strategy Adaptation: Imagine a trust established in the 1960s that explicitly mandates all its funds be invested solely in "high-yield municipal bonds from the state's largest five cities." Over decades, due to changes in financial markets and municipal finance, such specific bonds become scarce, illiquid, or offer extremely poor returns, jeopardizing the trust's ability to generate sufficient income for its beneficiaries as intended.

  A court, applying the doctrine of approximation, might authorize the trustees to invest in a broader range of stable, income-generating municipal bonds or diversified investment-grade securities. This adjustment varies the details of the trust's administration (the specific investment vehicles) but preserves the trust by ensuring its financial health and carries out the donor's underlying intention to provide a steady income for beneficiaries, even though the original, precise method is no longer practical or beneficial.

• Maintenance of Specific Property: Consider a trust created to maintain a specific historic family estate as a residence for future generations, with detailed instructions for its upkeep using traditional, labor-intensive methods and rare, expensive materials. After a century, the estate has fallen into significant disrepair, and the cost of maintaining it exactly as specified has become astronomically high, consuming almost all the trust's assets and leaving little for other beneficiaries or even essential structural repairs.

  A court could invoke the doctrine of approximation to permit the trustees to modify the maintenance plan. This might involve using more modern, cost-effective materials that are aesthetically similar, or even allowing the sale of a non-essential portion of the property to fund critical repairs, provided the core purpose of providing a family residence is still met. The court would be varying the details of administration (how the house is maintained) to preserve the trust (preventing its financial collapse) and carry out the donor's underlying intention (providing a family home), even if not in the exact manner originally envisioned.

• Administrative Meeting Procedures: A charitable trust, established in the early 20th century, requires its five trustees to meet physically in a specific town hall on the first Monday of every quarter to discuss grant applications and approve disbursements. Today, the trustees live in different countries across multiple continents, and international travel for quarterly meetings is prohibitively expensive and environmentally unsustainable, draining funds that could otherwise go directly to the charity's beneficiaries.

  Using the doctrine of approximation, a court could authorize the trustees to hold their quarterly meetings virtually via secure video conferencing. This change alters the details of the trust's administration (the method and location of meetings) but preserves the trust's financial resources and carries out the donor's intention to have regular oversight and decision-making for the charitable grants, adapting to modern realities without undermining the trust's core purpose.