Case Law Update: Cy Pres
The grantor conveyed an undivided interest in land to a charity so long as the land was used as an “education preserve for flora and fauna” to which the public would have access and if not “so used,” to the state of Hawai’i for use as a public park. After many years of negotiation between the state, the charity, and the owners of the other undivided interests in the land (relatives of the grantor), the parties agreed that the charity and the private parties would convey some of the land to the state which would establish a protected watershed and release its interest in the remaining land. The charity would then sell its remaining interest to the other owners, and the proceeds would be held in a fund named for the grantor and used to fund the charity’s educational programs.
The charity filed a petition seeking approval of the land exchange which was supported by the attorney general and the private parties. The trial court denied the petition because the gift over to the state provides for an alternative if the purpose of the gift cannot be carried out. The Hawai’i intermediate appellate court reversed in an opinion that thoroughly reviews the use of cy pres. In In re Elizabeth J.K.L. Lucas Charitable Gift, 261 P.3d 800 (Haw. Ct. App. 2011), the court held that because the gift over was impracticable due to the fact that the state had decided that the land was not suitable for use as a public park, the land exchange and sale should be approved.
Special thanks to William P. LaPiana (Rita and Joseph Solomon Professor of Wills, Trusts,and Estates, New York Law School) for sending me this case law update.