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What is the cy-pres doctrine?

On Behalf of | Feb 11, 2019 | Estate Planning |

During the course of your estate planning in California, you may wish to set up a trust that will benefit a particular cause or charitable organization after your death. This is a very generous gift and can ensure that your legacy lives on. However, because it is impossible to predict the future, circumstances may arise after you are gone that make it difficult or impossible to honor your intentions for the charitable trust exactly as written. In that instance, rather than allowing the trust to fail and the assets to go to waste, the court may apply the principle of the cy-pres doctrine.

According to the Internal Revenue Service, “cy-pres” comes from a French term meaning “as near as possible.” If it eventually becomes impossible or impracticable to carry out your charitable trust for its designated purpose, the court will revise the terms of the trust to benefit a charitable object that is similar to what you originally intended.

There are two examples of situations in which the cy-pres principle may apply. One may occur if you are too vague in naming beneficiaries, requesting that the assets benefit charitable causes rather than a specific organization. Another example would be a situation in which you did specify that a particular organization was to benefit from the trust, but at some point after your death, the organization ceases to exist.

For instance, imagine that you created a trust to benefit a children’s hospital, but sometime after your death, circumstances force the hospital to close down. By applying the cy-pres doctrine, the court could revise the trust to benefit another children’s hospital providing similar services rather than letting it go to waste because the designated beneficiary is no longer in existence.

The information in this article is not intended as legal advice but provided for educational purposes only.



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