Article On Using Cy Pres To Reform Charitable Gifts

Katie Magallanes recently published an article entitled, Beyond Donor Intent: Leveraging Cy Pres to Remedy Unintended Burdens Caused by Charitable Gifts, 40 ACTEC J. 407 (2014). Provided below is an excerpt from the article:

This article argues that state legislatures should expand UTC’s approach to cy pres and authorize courts to alter a qualifying charitable trust under a “reasonable donor” standard to eliminate speculation about whether the particular modification directly aligns to the donor’s original intent. Under this approach, when a charitable purpose becomes outmoded, and the instrument is silent of the issue, the public- rather than the settlor’s distant heirs- remains the sole beneficiary of the trust fund. Allowing courts to apply a reasonable donor standard will not deter giving because the law already ensures a trustee’s fidelity to the donor’s specific intent by requiring proof of impracticability or impossibility before altering the purpose of the trust under cy pres. Thus, when courts determine the appropriate remedy upon a finding of impracticability, they should abandon the search for the settlor’s implicit preferences concerning trust modification- preferences that are no less opaque than the presence or absence of general charitable intent- and instead impose a reasonable modification that balances the charities’ needs, the potential public benefit from the proposed change, and the likelihood that the change might deter future charitable giving.