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Charitable Trusts and the Ancient Doctrine of Cy-Pres
Often, people own property and assets that they want to ensure will be put to use to benefit others. A charitable trust allows them to create a way to do just that. With a charitable trust, trustees are empowered to achieve the owner’s intent over certain property and assets towards the purpose of the owner’s choosing.
Instances arise, however, where the original purpose of a charitable trust can no longer be achieved because its purpose becomes impossible or illegal. Since the original property owner and person who created the trust (the settlor) is often deceased, it is impossible to know how the settlor would have wanted the property to be utilized under different circumstances. Fortunately, the law has a created a doctrine to resolve this problem: the doctrine of cy-pres.
During the Spanish Inquisition, Jews were given a choice of conversion or death. Since Judaism was long tolerated in Spain and Portugal, Jews were well established and some had even set up trusts. One Jewish elder had long before the Spanish Inquisition set up a trust with the purpose of educating Jewish children. With the fulfillment of the trust’s purpose becoming impossible (with the illegality of Judaism), Spain’s authorities leaned on the doctrine of cy-pres. That is, they tried to ascertain the next closest legal purpose for how the trust’s assets could be used. They chose to use the trust to educate children in Catholicism instead – frustrating the trust’s original purpose, but in the dark days of the Inquisition, this was probably considered an equitable result.
In more recent times, the doctrine of cy-pres, which roughly translated from the Norman-French means “as near as possible,” has been used for more noble reasons. For example, Maryland’s highest court, the Court of Appeals, in 2002 used the doctrine of cy-pres where a trust formed in the 1940s sought only to benefit medical patients that were white. The court refused to enforce the trust’s racial discrimination, striking it from the trust’s purpose and operation. See Home for Incurables of Baltimore City v. University of Maryland Medical System Corp., 369 Md. 67 (2002).
Some commentators have even noted that the doctrine of cy-pres originated in some form under the Roman law. When the original purpose of a trust gets frustrated, authorities need to decide legally the purpose the money should serve. This has happened for as long as charitable trust, or some form therefor, existed – even in ancient times. Today, in Maryland, the doctrine of cy-pres is ingrained in the law via statute, granting the courts the power to administer a charitable trust whose purpose has become either illegal or impossible – further proof that this ancient legal doctrine lives on. Md. Ann. Code, Estates & Trusts, § 14-302.
Fred Antenberg is an attorney in Columbia, Maryland who handles issues related to wills and charitable trusts in Howard County, Maryland and surrounding counties. Call Fred at 410-730-4404.