Alex M. Johnson, Jr.

Limiting Dead Hand Control of Charitable Trusts: Expanding the Use of the Cy Pres Doctrine

PUBLISHER
Hawaii Law Review
DATE
1999
 

Abstract

The KSBET presents a classic example of a trust in need of modification via the cy pres doctrine to conform to conditions that have changed since it was established by the will of Princess Bernice Pauahi Bishop over 114 years ago. The exemption of charitable trusts from the Rule Against Perpetuities, coupled with the settlor' s limited knowledge of societal changes that will or may occur in the future, present a myriad of situations requiring analysis of charitable trusts to ascertain if courts should deploy the cy pres doctrine to change the express terms or conditions of the charitable trust to reflect societal changes that have transpired. The KSBET provides a very clear example of a trust in need of modification pursuant to the cy pres doctrine.

This focus of this Article, however, is not simply on the traditional deployment of cy pres as it is currently used by the courts. Indeed, a majority of courts continue to subscribe to a traditionally narrow view of cy pres that requires successful supplicants to make three showings before cy pres will be deployed: 1) that the settlor has created a valid charitable trust; 2) that the purpose of the trust has become illegal, impossible, or impracticable to complete; and 3) that the settlor possessed a general, as opposed to.a particular or specific, charitable intent that would not be defeated or thwarted by changing the-terms or conditions of the trust if cy pres is granted and the express terms of the trust are modified. This narrow interpretation, I contend, has resulted in indeterminate outcomes, and has resulted in the suboptimal use of cy pres (when viewed from a societal perspective), relegating the use of charitable assets to archaic and unproductive purposes. 

The focus of this Article is on the use and misuse of the cy pres doctrine by the courts and, comparatively, the relatively liberal use of the related doctrine of deviation by courts reforming administrative provisions of charitable trusts. The thesis presented herein is that the distinction between administrative and substantive provisions of a trust are highly chimerical and illusory, and that courts can rather arbitrarily determine ex ante the outcome of a particular dispute or litigation by simply characterizing a proposed change in a trust's operation or management as administrative (calling for the liberal doctrine of deviation) or as substantive (calling for the much narrower doctrine of cy pres).

 

Citation

Alex M. Johnson Jr., Limiting Dead Hand Control of Charitable Trusts: Expanding the Use of the Cy Pres Doctrine, 21 Hawaii Law Review 353-391 (1999).