Protecting Settlor’s Charitable Intent

Eric G. Pearson has published his comment Reforming the Reform of the Cy Pres Doctrine: A Proposal to Protect Testator Intent in 90 Marq. L. Rev. 127 (2006).

Here is his conclusion:

Charities have played an important role in American society, and many worthy causes rely on their contributions. Courts have favored charitable trusts by removing many of the typical restraints applicable to private trusts. The favored status of the charitable trust, however, has rendered some trusts ineffective and inefficient with the passage of time. Modern science and technology, for example, have the ability to render charitable purposes inefficient shortly after the settlor’s death. When courts developed the cy pres doctrine hundreds of years ago, settlors never imagined that certain ailments or diseases would cease to exist in the future. Today, modern science, for example, has the ability to render an early-twentieth century trust, which the settlor established for the purpose of benefiting individuals afflicted with polio, ineffective and inefficient within a few decades. Modern scholars have seen the need for change by broadening the latest model cy pres provisions. Despite the need for change, courts must exhibit self-restraint with their newfound ability to apply a broader cy pres doctrine.

To ensure that society continues to promote charitable giving and to promote the accumulation of wealth during a settlor’s lifetime, this Comment makes three proposals to protect testator intent. The first proposal merely protects the application of the current law. Courts should continue to literally interpret the terms impossible, impracticable, or illegal. The second proposal is more complex. Since a court could broadly interpret wastefulness, thus allowing a court to apply cy pres in an expansive range of circumstances, courts should exhibit judicial restraint by limiting the application of cy pres to only the surplus trust corpus of a charitable trust. Finally, the third proposal prevents a determined court from avoiding the restrictions created by the preceding proposals. The third proposal eliminates the equitable deviation doctrine, requiring a court to apply cy pres to modify a trust that is in need of reform. All three proposals endeavor to address the concerns of modern scholars, but this Comment attempts to offer a solution that continues to provide adequate incentives for potential settlors to place their assets in trust to benefit a charitable cause.