Marquette Law Review

Volume 90
Article 7
Issue 1 Fall 2006

Reforming the Reform of the Cy Pres Doctrine: A

Proposal to Protect Testator Intent
Eric G. Pearson

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Repository Citation
Eric G. Pearson, Reforming the Reform of the Cy Pres Doctrine: A Proposal to Protect Testator Intent, 90 Marq. L. Rev. 127 (2006).
Available at: http://scholarship.law.marquette.edu/mulr/vol90/iss1/7

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 REFORMING THE REFORM OF THE CY PRES
DOCTRINE: A PROPOSAL TO PROTECT
TESTATOR INTENT

I. INTRODUCTION
Charities and charitable trusts play an important role in American
society by providing funds to many worthy causes.1 Throughout the
history of the United States, many of the country's most famous and
wealthiest citizens have used charitable trusts to donate part or all of
their wealth to needy causes in American society. 2 Carnegie, Duke,
Guggenheim, Kellogg, Ford, Hershey, Gates, and now Buffet 3 are a few
of many wealthy individuals who have donated significant fortunes to
charity over the last few centuries.'
The passage of time has the potential to render the trust provisions
of some of America's most famous charitable trusts ineffective and
inefficient.5 The cy pres doctrine, originally conceived in its present
form in the eleventh century, was equity's answer to the inherent
problems of an institution with perpetual existence.' Cy pres allows a
court to modify the dispositive purpose of a charitable trust, but courts
have continually applied the doctrine narrowly to preserve the settlor's
intent.7 Historically, the purpose of a charitable trust was difficult to

1. See, e.g., Thomas Parrish, The Foundation:"A Special American Institution," in THE
FUTURE OF FOUNDATIONS 7 (Fritz F. Heimann ed., 1973).
2. Id. at 14-16.
3. Carol J. Loomis, Warren Buffet Gives It Away, FORTUNE, July 10, 2006, at 57
(describing Warren Buffet's plan to give most of his $40 billion fortune to the Bill and
Melinda Gates Foundation).
4. Parrish, supra note 1, at 15; Jennifer L. Komoroski, Note, The Hershey Trust's Quest
to Diversify: Redefining the State Attorney General's Role When Charitable Trusts Wish to
Diversify, 45 WM. & MARY L. REV. 1769, 1772-73 (2004) (retracing the history and
importance of the charitable trust in American society).
5. Several notable and highly-publicized examples include the following: (1) the Buck
Trust, see, e.g., John G. Simon, American Philanthropyand the Buck Trust, 21 U.S.F. L. REV.
641 (1987); (2) the Barnes Foundation, see, e.g., Jeffrey Toobin, Battle for the Barnes, THE
NEW YORKER, Jan. 21, 2002, at 34; and (3) the Bishop Estate, see, e.g., Robert Mahealani M.
Seto & Lynne Marie Kohm, Of Princesses, Charities, Trustees, and Fairytales:A Lesson of the
Simple Wishes of Princess Bernice PauahiBishop, 21 U. HAW. L. REV. 393 (1999).
6. MARION R. FREMONT-SMITH, GOVERNING NONPROFIT ORGANIZATIONS 173
(2004).
7. The settlor is the individual who creates a charitable trust by giving property (referred
to as the trust corpus or trust res) in trust for a charitable purpose through a will or other
 MARQUETTE LAW REVIEW [90:127

change, but modern scholars, who have proponed a broadened cy pres

doctrine, have eroded the settlor's power to define a charitable purpose
capable of existing in perpetuity. 8 Influenced by prevailing theories, the
American Law Institute and the National Conference of Commissioners
on Uniform State Laws redrafted the sections on cy pres in the
Restatement (Third) of Trusts ("Restatement (Third)") and in the
Uniform Trust Code ("UTC"), respectively, to allow courts to exercise
cy pres in a broader range of circumstances. 9
Although the modern discourse surrounding the cy pres doctrine
argues that the narrow application of the doctrine can result in an
ineffective and an inefficient use of trust assets, this Comment makes
three proposals to ensure that future settlors can continue to rely upon
the judiciary to uphold their intent for many years into the future. First,
courts should apply the narrow interpretation found in established case
law to the terms impossible, impracticable, or illegal under the new UTC
and the Restatement (Third). Second, the term wastefulness, which the
drafters inserted in their latest revisions of the UTC and the
Restatement (Third), should apply only when the trust faces a surplus
that the trustees are unable to apply, in its entirety, to the original
charitable purpose. In such a scenario, a court should limit its
application of cy pres to only the surplus portion of the trust corpus-a
term for which this Comment offers a definition influenced by the law
and economics school of thought. Third, courts should destroy the now
meaningless dichotomy between the equitable deviation doctrine and
the cy pres doctrine to promote stability in the law and to protect the
testator's intent from a whimsical judge. The first two proposals ensure
that courts would preserve the narrow set of circumstances in which a
court can apply the cy pres doctrine, but all three proposals endeavor to
allow testators to effectuate their intent long after their deaths while still
addressing the economic efficiency concerns of modern scholars.
Part II examines a charitable trust's legal requirements and the
history of its development. Part III provides an elementary explanation
of the Rule Against Perpetuities and explains its significance to a
charitable trust. Part IV explores the cy pres doctrine, including the
legal requirements for its application and the history of its development.
Part V provides a brief explanation of the equitable deviation doctrine

governing instrument. See GEORGE GLEASON BOGERT & GEORGE TAYLOR BOGERT, THE
LAW OF TRUSTS AND TRUSTEES § 1 (rev. 2d ed. 1984). See discussion infra Parts ILA, IV.
8. FREMONT-SMITH, supra note 6, at 173-75.
9. See infra Part IV.B.
2006] THE CY PRES DOCTRINE

and its importance to this Comment's proposal for reform. Part VI

examines two noteworthy examples of recent crises involving charitable
trusts. Finally, Part VII examines the modern debate surrounding the
application of cy pres and makes three proposals for further reform of
the cy pres doctrine.

II. CHARITABLE TRUSTS

A. Legal Requirements
The requirements to create a charitable trust are primarily the same
as the requirements to create a private trust, with only two exceptions.'"
First, courts require a charitable trust to have an indefinite number of
beneficiaries." More precisely, courts require that the beneficiaries of a
charitable trust are undefined; a charitable trust may not have specific
beneficiaries.12 Second, the settlor must create a general charitable
purpose. 3 Justice Gray succinctly defined a valid charitable trust and its
acceptable purposes:

A charity, in the legal sense, may be more fully defined

as a gift, to be applied consistently with existing laws, for
the benefit of an indefinite number of persons, either by
bringing their minds or hearts under the influence of
education or religion, by relieving their bodies from
disease, suffering or constraint, by assisting them to
establish themselves in life, or by erecting or maintaining
public buildings or works 4
or otherwise lessening the
burdens of government.'

Essentially, a charitable trust requires the following: (1) a settlor

with intent to create a charitable trust; (2) the delivery of specific
property that becomes the trust corpus; (3) a charitable purpose; and (4)

10. BOGERT & BOGERT, supra note 7, § 323. The creation of a private trust has three
requirements: (1) intent that the property be held in benefit for one other than the settlor; (2)
at least one beneficiary; and (3) an interest in the property, which must be in existence or at
least ascertainable, that is to be held for the benefit of the beneficiary. Id. § 1. A trust will
not fail for the lack of a trustee because a court can appoint one. Id.
11. Id. § 363.
12. Id.
13. Id. § 362.
14. Jackson v. Phillips, 96 Mass. (14 Allen) 539, 556 (1867).
 MARQUETTE LAW REVIEW [90:127

an indefinite number of beneficiaries.15 The Restatement (Second) of

Trusts ("Restatement (Second)") defines a charitable trust as "a
fiduciary relationship with respect to property arising as a result of a
manifestation of an intention to create it, and subjecting the person by
whom the property is held to equitable duties to deal with the property
for a charitable purpose."16 The primary difference between a private
trust and a charitable trust is the size and nature of the class of
beneficiaries-charitable trusts consist of funds beneficial to a
community as a whole."
The purpose of a charitable trust may not be merely benevolent.18
The Restatement (Second) provides a widely recognized list of
acceptable charitable purposes based on the illustrative list of charitable
purposes found in the Statute of Elizabeth 9 :

Charitable purposes include[:]

(a) the relief of poverty;
(b) the advancement of education;
(c) the advancement of religion;
(d) the promotion of health;
(e) governmental or municipal purposes; [and]
(f) other purposes the accomplishment of which is
beneficial to the community."

Although the Restatement (Second) allows these enumerated purposes

of a charitable trust, a charitable trust's purpose may not be in breach of
public policy or facilitate the execution of a crime or of a tort.2
The charitable trust's most important attributes are the many
advantages that state and federal law afford to it. Unlike private trusts
in most states, charitable trusts receive an exemption from restrictive
property rules limiting the vesting of property interests, durational limits

15. EDITH L. FISCH ET AL., CHARITIES AND CHARITABLE FOUNDATIONS 174 (1974).
16. RESTATEMENT (SECOND) OFTRUSTS § 348 (1959).
17. Domenic P. Aiello & Tracy Adler Craig, Cy Pres: Reformation of the Charitable
Trust, 81 MASS. L. REV. 110, 111-12 (1996).
18. See, e.g., Shenandoah Valley Nat'l Bank of Winchester v. Taylor, 63 S.E.2d 786, 789-
90 (Va. 1951).
19. EDITH L. FISCH, THE CY PRES DOCTRINE IN THE UNITED STATES 10 (1950)
(quoting Statute of Charitable Uses, 1601, 43 Eliz. c. 4 (Eng.)). See infra note 31, quoting the
preamble to the Statute of Charitable Uses.
20. RESTATEMENT (SECOND) OF TRUSTS § 368 (1959); see also Taylor, 63 S.E.2d at 789.
21. BOGERT & BOGERT, supra note 7, § 361.
20061 THE CY PRES DOCTRINE

placed on trusts, and limits placed on the accumulation of trust income. 2

For example, a charitable trust may exist indefinitely because its
duration is not limited by the Rule Against Perpetuities.2 3 Charitable
trusts may continue their operation so long as they remain funded and
distribute their income to the intended beneficiaries. In addition to the
multiple state law benefits, federal and state tax laws create preferential
treatment for charitable trusts.24 Unlike a private trust, qualified
charitable trusts are exempt from state and federal income tax and from
the estate tax.25 In addition, most states do not impose property taxes
on the assets of charitable trusts.26 Most important to this Comment,
however, is the charitable trust's exemption from the Rule Against
Perpetuities, which allows a trust to operate indefinitely.27

B. History of Charitable Trusts

Although gifts to charity have existed in antiquity,' English Courts
of Chancery first created charitable trusts, which were enforceable in
equity.29 Charitable trusts were popular in England, but they were
commonly abused or mismanaged. ° As a result of widespread abuse,
Parliament enacted the Statute of Charitable Uses of 1601, which acted
as an enforcement mechanism to prevent the mismanagement of
charities.3 1 The Statute of Charitable Uses created a new remedy for the

22. Id. § 245.

23. Id.; see also id. § 342.
24. Id. § 245.
25. Id.
26. Id.
27. See infra Part III.
28. MARION R. FREMONT-SMITH, FOUNDATIONS AND GOVERNMENT 11 (1965)
(noting that the concept of charity and organizations for charitable purposes existed in many
early cultures). Examples of early charitable gifts include the following: the Ptolemies'
endowment for a library in Alexandria; Plato leaving funds for the support of his Academy;
and numerous private associations that supported the poor, education, hospitals, asylums, and
old people's homes in the early Roman Empire. Id.
29. Id. at 82.
30. BOGERT & BOGERT, supra note 7, § 321.
31. See JAMES C. BAUGHMAN, TRUSTEES, TRUSTEESHIP, AND THE PUBLIC GOOD 4
(1987); see also FISCH ET AL., supra note 15, at 17. The preamble to the Statute of Charitable
Uses, which was entitled "An Act to redress the misemployment of lands, goods and stocks of
money heretofore give to certain charitable uses," reads as follows:

Whereas lands, tenements, rents, annuities, profits, hereditaments, goods,

chattels, money and stocks of money have been heretofore given, limited,
appointed and assigned, as well by the Queen's most excellent Majesty, and
her most noble progenitors, as by sundry other well disposed persons; some
 MARQUETTE LAW REVIEW [90:127

misapplication of property held in a charitable trust; the statute did not

create the jurisdiction of the chancery court, which already existed prior
to the enactment of the Statute. 2 The Statute merely created a new
remedy to enforce charitable trusts by providing the chancellor with the
auxiliary power to investigate and to enforce breaches of charitable
trusts through a special commission.33 The statute did not create the
chancellor's jurisdiction over charities, and it did not supersede
3 or
supplant the existing remedy allowed by the chancery courts. 1
The use of charitable trusts and private charities crossed the Atlantic
Ocean with the colonization of America,35 but after the American
Revolution, the framers of the U.S. Constitution did not specifically
enumerate the enforcement of charitable trusts as one of the powers of
the federal government.3 6 Charitable trusts were left to the states, and
many states passed laws allowing for the creation of charitable trusts.37
Some states, however, passed laws to repeal all English statutes, and
they did not support charities or charitable trusts because of a desire to
completely rid themselves of all former vestiges of English rule.38 Seven
states and the District of Columbia rejected the doctrine of charitable

for relief of aged, impotent and poor people, some for maintenance of sick
and maimed soldiers and mariners, schools of learning, free schools, and
scholars in universities, some for repair of bridges, ports, havens,
causeways, churches, sea-banks and highways, some for education and
preferment of orphans, some for or towards relief, stock or maintenance of
houses of correction, some for marriages of poor maids, some for
supportation, aid and help of young tradesmen, handicraftmen and persons
decayed, and others for relief or redemption of prisoners, or captives, or for
aid or ease of any poor inhabitants concerning payments of fifteens, sitting
out of soldiers and other taxes; which lands, tenements . . . nevertheless
have not been employed according to the charitable intent of the givers and
founders thereof, by reason of frauds, breaches of trust, and negligence in
those that should pay, deliver and employ the same: for redress and remedy
whereof ....
FISCH, supra note 19, at 10-11.
32. FISCH, supra note 19, at 11 (noting that the enumeration of various charitable
purposes in the Statute of Charitable Uses led to the erroneous belief that the statute created
the jurisdiction of the chancery court over charitable trusts).
33. Id.
34. Id.
35. FISCH ET AL., supra note 15, at 20; FREMONT-SMITH, supra note 28, at 36.
36. BAUGHMAN, supra note 31, at 5.
37. See FISCH ET AL., supra note 15, at 20; see also FREMONT-SMITH, supra note 28, at
36-37 (observing that Massachusetts retained English common law and English statutes
through its state constitution and noting that Connecticut enacted specific legislation in 1702
to provide for the validity of charitable trusts).
38. FISCH ET AL., supra note 15, at 21; see also FREMONT-SMITH supra note 28, at 36-37.
2006] THE CYPRES DOCTRINE

trusts.39 For many years, the only method of providing for a charity in
these states was either to leave property to an existing charitable
corporation or to leave property to a trustee instructed to create a
charitable corporation within the period allowed by the Rule Against
Perpetuities. '
The development of the law surrounding charitable trusts in this
country has been retarded by the U.S. Supreme Court's 1819 decision in
Trustees of the Philadelphia Baptist Ass'n v. Hart's Executors, which
addressed the legality of a charitable trust from Virginia. 4 The Court
erroneously held that this particular charitable trust failed because the
Court believed that the legality of charitable trusts derived from the
Statute of Charitable Uses of 1601.2 Since Virginia had specifically
repealed all English statutes and acts of Parliament in 1792, Chief
Justice Marshall's opinion reasoned that the charitable trust was invalid
because Virginia repealed the Statute of Charitable Uses.43 Marshall's
opinion was based on the historical misconception that the Statute of
Charitable Uses created charitable trusts, a misconception based on
false historical evidence and dicta in certain English cases that suggested
that trusts without defined beneficiaries did not exist prior to the Statute
of Charitable Uses." The Supreme Court corrected the error it made in
Hart in a subsequent decision twenty-five years later, but Virginia,
Maryland, the District of Columbia, and West Virginia followed Hart
for nearly one-hundred years, and Hart influenced the development of
charitable trust law in New York, Michigan, Wisconsin, and
Minnesota.45

39. FREMONT-SMITH, supra note 28, at 37-38. The following seven states and the
District of Columbia rejected the doctrine of charitable trusts: Virginia, West Virginia,
Maryland, New York, Michigan, Wisconsin, and Minnesota. FISCH, supra note 19, at 13-55.
40. FREMONT-SMITH, supra note 28, at 37 (noting that the retarded development of the
charitable trust in the United States differed significantly from the development of charitable
trusts in England).
41. Phila. Baptist Ass'n v. Hart's Ex'rs, 17 U.S. (4 Wheat.) 1 (1819) (involving a
testamentary gift to an unincorporated Baptist association to help young men acquire an
education for ministry).
42. Id. at 8.
43. Id. Virginia, Maryland, and later, West Virginia followed Hart, and gifts for charity
were restricted to the use of charitable corporations for many years. See Gallego's Ex'rs v.
Att'y Gen., 30 Va. (3 Leigh) 450 (1832), overruled by Protestant Episcopal Educ. Soc'y v.
Churchman's Representatives, 80 Va. 718 (1885); Dashiell v. Att'y Gen., 5 H. & J. 392 (Md.
1822); Am. Bible Soc'y v. Pendleton, 7 W. Va. 79 (1873). Subsequent legislation validated the
use of charitable trusts in Maryland and West Virginia. FISCH, supranote 19, at 18-19, 21-22.
44. FREMONT-SMITH, supra note 28, at 37-38.
45. Id. at 38.
 MARQUETTE LAW REVIEW [90:127

The Supreme Court's decision in Hart inspired further historical

research into the origins of equity jurisdiction over charitable trusts.46
The result of this research definitively determined that charitable trusts
did not rely on the Statute of Charitable Uses for their validity. In
1844, the Court heard Vidal v. Girard's Executors, and it reversed its
holding from Hart.4' The Court held that it was mistaken in its earlier
holding in Hart.49 It found that Pennsylvania's repeal of the Statute of
Charitable Uses was immaterial because the legality of charitable trusts
stemmed from earlier English common law.5 ° Although Vidal
stimulated intense public interest in charitable trusts, the public interest
was not capable of changing the decisions of state courts and
legislatures, which continued to follow the Hart decision for many
decades."

III. THE RULE AGAINST PERPETUITIES

"No interest is good unless it must vest, if at all, not later than
twenty-one years after some life in being at the creation of the
interest. 52 The Rule Against Perpetuities limits the duration of most

46. Id.
47. Id.
48. Vidal v. Girard's Ex'rs, 43 U.S. (2 How.) 127 (1844) (involving the validity under
Pennsylvania law of a testamentary charitable trust from the will of Stephen Girard for the
establishment of a school or college for "poor white male orphans" in Philadelphia). The
Supreme Court was not finished with Stephen Girard's trust. It would come before the Court
again over a century later because the college's racial restrictions were a forbidden state
action under the Fourteenth Amendment Equal Protection Clause. See Pennsylvania v. Bd.
of Dirs., 353 U.S. 230 (1957).
49. Vidal, 43 U.S. (2 How.) at 196.
50. Id.; see also FREMONT-SMITH, supra note 28, at 38.
51. FREMONT-SMITH, supra note 28, at 38; HOWARD S. MILLER, THE LEGAL
FOUNDATIONS OF AMERICAN PHILANTHROPY 1776-1844, at 38-39 (1961). Miller noted that
the intense public interest in the Vidal case was probably due more to the famed counsel
before the Court as opposed to the substantive trust issues involved in the case. Horace
Binney, representing the City of Philadelphia, succeeded in convincing the Court that
Girard's charitable trust was enforceable, and he defeated Daniel Webster, who represented
the heirs of Stephen Girard. MILLER, supra, at 38.
52. JOHN CHIPMAN GRAY, THE RULE AGAINST PERPETUITIES § 201 (4th ed. 1942).
Although Gray condensed the Rule Against Perpetuities into one sentence after nearly 200
pages, the development of the rule took centuries to complete. The Rule is an excellent
example of judicial legislation, as the case-by-case development of the Rule took hundreds of
years. The origin of the Rule is unclear, but the purpose of the statute was to place a
limitation upon tying up land in perpetuity, which the Statute de Donis (1285) had previously
permitted. See Alex M. Johnson, Jr., Limiting Dead Hand Control of Charitable Trusts:
Expanding the Use of the Cy Pres Doctrine,21 U. HAW. L. REV. 353, 366 n.41 (1999).
2006] THE CY PRES DOCTRINE

trusts. 3 Critical to this Comment, however, is the understanding that

the law excludes charitable trusts from the Rule Against Perpetuities.
The intended purpose of the Rule is to limit "dead hand" control, to
promote the alienability of property, and to curtail trusts that allow
wealthy families to tie up their wealth for centuries. 4
The Rule Against Perpetuities achieves its purpose by "voiding
certain interests (typically future contingent interests and executory
interests but also interests created by option agreements) in land and
personalty that vest in interest too remotely."55 Essentially, interests
created in trusts that are not given to persons in existence at the time of
the creation of the trust (ascertainable persons) are subject to the Rule
56
Against Perpetuities. Courts created the Rule Against Perpetuities'
period-lives in being plus twenty-one years-to allow the settlor to
control the assets for, at most, two generations, assuming that
grandchildren are lives in being at the creation of the trust. 7 The Rule
will strike down any interest as invalid if it has the possibility of vesting
beyond the Rule Against Perpetuities' period. 8
All charitable trusts create contingent interests that are subject to
the Rule Against Perpetuities because charitable trusts create interests
in unascertained beneficiaries, who are not lives in being at the time of

53. GRAY, supra note 52, § 201.

54. Johnson, supra note 52, at 366 (noting that economic reasoning supports the
purposes of the cy pres doctrine).
55. Id. at 367.
56. For the sake of precision, Professor Johnson explains that even interests given to
ascertainable persons at the time of the creation of the trust may be subject to the Rule
Against Perpetuities. Id. at 367 n.44. If the interest has a condition attached, the Rule
Against Perpetuities may still apply, despite the fact that the beneficiary was ascertainable at
the time of the trust's creation. For example, consider the following transfer: "Blackacre to
Mary if and when the Cubs win the World Series." Mary's interest is a contingent interest
because the interest is dependent upon an event that may or may not happen-the Cubs
winning the World Series. In addition, Mary's contingent interest is transmissible inter vivos
or by will, and her interest reduces the alienability of the subject property because no one
would want to purchase a property when Mary's interest in the property may vest in the
event-however unlikely-that the Cubs win the World Series. Since Mary's interest may
vest beyond lives in being plus twenty-one years, the Rule Against Perpetuities will declare
Mary's interest void. Notably, Mary is the only relevant life in being, but she is not the
measuring life in this example because the interest passes to Mary or to her heirs if and when
the Cubs win the World Series, regardless of whether Mary is still alive at the time of the
Cubs' win. If the settlor further restricted Mary's interest by requiring her to be alive at the
time the Cubs win for the interest to vest, Mary's life would become the measuring life, and
the contingent interest would not run afoul of the Rule Against Perpetuities because the
interest does not have the opportunity to exceed the Rule Against Perpetuities period. Id.
57. See id. at 368.
58. See id.
 MARQUETTE LAW REVIEW [90:127

the creation of the trust. 9 If a settlor created the contingent interests in

6
a private trust, they would be subject to the Rule Against Perpetuities. 0
Because the interests would vest too remotely, the Rule would declare
the interests invalid.6' Since the Rule would effectively invalidate most
trusts for charitable purposes, the exclusion of a charitable trust from
the Rule Against Perpetuities is an important distinction from private
trusts. The law provides settlors of charitable trusts with a significant
benefit by allowing them to control the trust corpus well in excess of the
term that the property could be controlled in a similar private trust.
Many settlors consider the ability to control the property in perpetuity
an important attribute when they decide to utilize a charitable trust.

IV. THE CY PRES DOCTRINE

A. Legal Requirements
Although there are multiple definitions of the cy pres doctrine, most
authorities generally recognize the doctrine as a saving device that
courts may apply to charitable trusts when the exact intent of the settlor
cannot be completed exactly as directed. 62 The most cited and
commonly followed definition of cy pres today is found in the
Restatement (Second):

If property is given in trust to be applied to a particular

charitable purpose, and it is or becomes impossible or
impracticable or illegal to carry out the particular
purpose, and if the settlor manifested a more general
intention to devote the property to charitable purposes,
the trust will not fail but the court will direct the
application of the property to some charitable purpose
which falls within the general charitable intention of the
settlor.63

Consistent with the doctrine's purpose to approximate the settlor's

intent, the phrase cy pres developed from the Norman French phrase cy

59. Id. at 369.

60. Id.
61. Id.
62. FISCH, supra note 19, at 1.
63. RESTATEMENT (SECOND) OF TRUSTS § 399 (1959) (emphasis added).
20061 THE CY PRES DOCTRINE

pres comme possible, which means "as near as possible." '

For a court to apply cy pres to reform a charitable trust, the
following three elements must be met: (1) an applicant must show that
there is a valid charitable trust; (2) current or changed circumstances
must frustrate the settlor's specific charitable intent, requiring the use of
cy pres to fulfill the settlor's specific directions; and (3) the settlor must
have a "general charitable intent" that is not limited solely to the precise
purpose specified in the trust instrument.65 Although a few courts have
applied cy pres liberally, 66 most courts apply the cy pres doctrine
narrowly to the reformation of trusts.67 Presumably, many courts
reasoned that the intent of the settlor should be controlling, and they
were reluctant to modify trusts in a manner that was not consistent with
the instructions of the settlor. Some courts argue that a liberal
application of the cy pres doctrine would result in less charitable giving
because potential settlors would doubt that their charitable gift would
be carried out as they intended. 6
The first element-a valid charitable purpose-creates few problems
for courts. Most courts favor charitable distributions of property, and
they are willing to liberally interpret the settlor's intent to find a
charitable purpose. 69 In comparison to the other elements for the
application of cy pres, the first element rarely precludes the use of cy
pres. 70

64. FISCH, supra note 19, at 1. The best pronunciation of the phrase would be "see
pray," that being the proper French pronunciation. The Anglicized pronunciation would be
as if the phrase were spelled "si press." The common usage today is a mixture of the English
and French pronunciation, pronouncing the phrase as "si pray." BOGERT & BOGERT, supra
note 7, § 431.
65. RESTATEMENT (SECOND) OF TRUSTS § 399 (1957); see also FREMONT-SMITH, supra
note 6, at 173.
66. See, e.g., Gallaudet Univ. v. Nat'l Soc'y of Daughters of the Am. Revolution, 699
A.2d 531 (Md. Ct. Spec. App. 1997) (concluding that cy pres should apply to allow funds
designated for the support of a nursing home for DAR members, which was recently closed,
to be used instead for the support of all DAR members generally).
67. See, e.g., In re Estate of du Pont, 663 A.2d 470 (Del. Ch. 1994) (refusing to apply cy
pres to funds donated for the operation of a convalescent hospital in a specific location in
order to support another similar facility in a different location after the original hospital
ceased to operate due to a lack of need).
68. See, e.g., Bd. of Trs. of Am. Indian, Heye Found. v. Bd. of Trs. of Huntington Free
Library & Reading Room, 610 N.Y.S.2d 488, 501 (App. Div. 1994) (refusing to apply cy pres
where the trustees of a donor foundation petitioned the court to order the return of books
given to the defendant library who had subsequently donated the books to the Smithsonian
Institution, resulting in the inability of the donor's beneficiaries to access the books).
69. Johnson, supra note 52, at 371.
70. Id.
 MARQUETTE LAW REVIEW [90:127

The second element-changed circumstances resulting in the

frustration of a settlor's specific charitable intent-creates the greatest
impediment to the application of cy pres. 7' This requirement
necessitates a fact-specific inquiry by a court,72 but most courts have
been reluctant to discard a strict textual approach to this element of the
three-pronged test for cy pres." If the settlor's specific instructions in
the trust instrument have not become completely impossible or
impracticable, most courts are simply unwilling to alter the terms of the
trust. 74
The third element-a general charitable intent, as opposed to a
charitable intent for a specific purpose-creates few problems for most
courts. 75 Courts have always liberally construed this requirement, 76 and
today, the Restatement (Third)
77 and the UTC contain a presumption of a
general charitable intent.

B. History of the Cy Pres Doctrine

The doctrine of cy pres has existed nearly as long as the concept of
charity, but the doctrine arose so long ago that its true origin is obscure
today.78 The doctrine existed long before its application in the English
courts of chancery, and it existed long before the advent of Christianity
and the Church. 79 A case appears in the Digest of Justinian where
Modestinus, a celebrated jurist, applied the cy pres doctrine to a legacy
established in third century Rome.8 Although the precise reason for

71. Id.
72. See, e.g., In re Abrams, 574 N.Y.S.2d 651, 655 (Sup. Ct. 1991) (establishing whether a
trust's purpose has become impossible, impractical, or illegal to perform is a fact specific
inquiry).
73. Johnson, supra note 52, at 371.
74. Id.
75. Id. at 374.
76. Id.
77. UNIF. TRUST CODE § 413 cmt. (amended 2004 & 2005), 7C U.L.A. 509 (2006);
RESTATEMENT (THIRD) OF TRUSTS § 67 cmt. b (2003); see also FREMONT-SMITH, supra note
6, at 177.
78. FISCH, supra note 19, at 3.
79. Id.
80. DIG. 33.2.16 (Modestinus, Replies 9) (Alan Watson trans.). The testator left the
legacy for the benefit of a city to conduct yearly games. Since the games were illegal at the
time, Modestinus proposed the following solution:

[s]ince the testator wanted a spectacle to be celebrated in the town, but of

such a kind as could not legally be celebrated there, it was unfair that the
sum which the deceased had intended for the spectacle should fall to the
2006] THE CY PRES DOCTRINE

the adoption of cy pres by the English chancery courts during the

Middle Ages is unknown, the most plausible suggestion is that English
chancellors, who were ecclesiastics trained in Roman civil law,
resurrected the doctrine to save bequests for religious charitable
purposes, which thereby subjected the trust property to the control of
the Church." Fisch explained the use of cy pres as the chancery court's
personification of charity as a fictitious person with all the rights of a
real beneficiary but exempt from the Rule Against Perpetuities.82 Early
courts treated the settlor's specific object or charity as a mere means to
giving effect to a general charitable intent.8 3 Lord Eldon described this
attitude of the early courts:

[W]here a legacy is given so as to denote, that charity is

the legatee, the Court does not hold, that the mode is of
the substance of the legacy; but will effectuate the gift to
charity, as the substance; providing a mode for that
legatee to take, which is not provided for any other
legatee. 84

The cy pres doctrine is not merely limited to English common law; cy

pres also exists in French and Spanish civil law. 5
Today, almost all jurisdictions in the United States recognize the cy
86
pres
pres doctrine.
in the leadingMassachusetts judicially
case of Jackson recognized
v. Phillips.87
The doctrine ofofthe
themajority cy

profit of the heirs. Therefore, the heirs and the chief men of the town
should be summoned to discuss how the fideicommissum could be
transformed so that the testator's memory would be celebrated in some
other legal way.
Id.
81. FISCH, supra note 19, at 4 (citing Att'y Gen. v. Ministers and Elders of the Dutch
Reformed Protestant Church, 36 N.Y. 452, 457 (1867)).
82. Id. at 5.
83. Id.
84. Mills v. Farmer, (1815) 34 Eng. Rep. 595, 596 (K.B.). For more language to this
effect see Village of Hinsdale v. Chicago City Missionary Society, 30 N.E.2d 657, 664-65 (Ill.
1940).
85. FISCH, supra note 19, at 4.
86. FREMONT-SMITH, supra note 6, at 173; see also Roger G. Sisson, Comment, Relaxing
the Dead Hand's Grip: CharitableEfficiency and the Doctrineof Cy Pres,74 VA. L. REV. 635,
635 n.6 (1988) (noting that South Carolina does not recognize cy pres). According to
Fremont-Smith, only Alaska and North Dakota do not recognize the doctrine, and Hawaii
and Nevada have recognized the doctrine only in dicta. FREMONT-SMITH, supra note 6, at
173. South Carolina uses the deviation doctrine instead of the cy pres doctrine. Id.
87. Jackson v. Phillips, 96 Mass. (14 Allen) 539 (1867); see also FREMONT-SMITH, supra
 MARQUETTE LAW REVIEW [90:127

states that recognize the doctrine apply it when the purpose of a

particular charitable trust becomes impossible, impracticable, or
illegal.' Most courts utilize the three-part test to determine if the
application of cy pres is appropriate.89 These courts continue to apply cy
pres only when the settlor's specific intent has become literally
impossible or impracticable, despite the uneconomic consequences.'
Today, some courts have begun to apply the cy pres doctrine more
broadly. With the recent addition of the term wastefulness to the UTC9
and the Restatement (Third), 2 the drafters allow courts to consider the
economic inefficiencies of charitable trusts in need of reform. 93 The
UTC and the Restatement (Third) represent the broadest application of
the cy pres doctrine, but few states have adopted the broader
application of cy pres from the UTC or the Restatement (Third).94 Most

note 6, at 175.
88. FREMoNT-SMITH, supra note 6, at 178.
89. See Aiello & Craig, supra note 17, at 111.
90. FREMONT-SMITH, supra note 6, at 178.
91. UNIF. TRUST CODE § 413(a) (amended 2004 & 2005), 7C U.L.A. 509 (2006). The
UTC provides as follows:

(a) Except as otherwise provided in subsection (b), if a particular

charitable purpose becomes unlawful, impracticable, impossible to
achieve, or wasteful:
(1) the trust does not fail, in whole or in part;
(2) the trust property does not revert to the settlor or the settlor's
successors in interest; and
(3) the court may apply cy pres to modify or terminate the trust by
directing that the trust property be applied or distributed, in whole or
in part, in a manner consistent with the settlor's charitable purposes.
Id.
92. RESTATEMENT (THIRD) OF TRUSTS § 67 (2003). The latest revision of the
Restatement provides for the following:

Unless the terms of the trust provide otherwise, where property is placed in trust to
be applied to a designated charitable purpose and it is or becomes unlawful,
impossible, or impracticable to carry out that purpose, or to the extent it is or
becomes wasteful to apply all of the property to the designated purpose, the
charitable trust will not fail but the court will direct application of the property or
appropriate portion thereof to a charitable purpose that reasonably approximates
the designated purpose.
Id.
93. UNIF. TRUST CODE § 413(a); RESTATEMENT (THIRD) OF TRUSTS § 67 (2003).
94. Only thirteen states and the District of Columbia have adopted the UTC's expanded
use of the cy pres doctrine. See ARK. CODE ANN. § 28-73-413 (Supp. 2005); D.C. CODE § 19-
1304.13 (Supp. 2006); KAN. STAT. ANN. § 58a-413 (Supp. 2005); ME. REV. STAT. ANN. tit. 13,
§ 4107 (Supp. 2005); MO. ANN. STAT. § 456.4-413 (West Supp. 2006); NEB. REV. STAT. ANN.
2006] THE CY PRES DOCTRINE

states continue to literally interpret the terms impossible, impractical,or

illegal from the Restatement (Second).95

V. EQUITABLE DEVIATION

The theory of this Comment contrasts the doctrine of equitable

deviation and the cy pres doctrine. Equitable deviation applies when "it
appears to the court that compliance is impossible or illegal, or that
owing to circumstances not known to the settlor and not anticipated by
him compliance would defeat or substantially impair the
accomplishment of the purposes of the trust." 96 The important
distinction between the equitable deviation doctrine and the cy pres
doctrine is that equitable deviation applies only to the administrative
provisions of a trust, and cy pres applies only to the substantive
provisions of a trust.97 Despite this seemingly basic distinction, the issue
becomes far more complicated when applied to an actual trust. As one
commentator observed: "The terms 'substantive' and 'administrative'
are obviously conclusionary [sic] and give rise to confused and vague
court decisions, particularly when an administrative provision is of such
central importance in the trust instrument as to take on a substantive
nature."9 Often, the outcome of a petition for reformation depends on
whether a court finds the provision to be administrative under the
equitable deviation doctrine or substantive under the cy pres doctrine.
Courts tend to favor the use of the equitable deviation doctrine over
the use of cy pres because cy pres "reaches the central purpose of the
trust, and is therefore appropriately subject to greater restraint" than
the deviation doctrine, which merely changes the methods of the trust's
administration. 99 When a court reforms an administrative provision of a
trust, it "is merely exercising its general power over the administration
of trusts," but when a court applies cy pres, that "doctrine requires the
exercise of a more extensive power than the ordinary power of a court

§ 30-3839 (LexisNexis Supp. 2005); N.H. REV. STAT. ANN. § 564-B:4:413 (Supp. 2005); N.M.
STAT. ANN. § 46A-4-413 (LexisNexis Supp. 2003); N.C. GEN. STAT. § 36C-4-413 (2005); OR.
REV. STAT. § 130.210 (2005); TENN. CODE ANN. § 35-15-413 (Supp. 2005); UTAH CODE
ANN. § 75-7-413 (Supp. 2006); VA. CODE ANN. § 55-544.13 (Supp. 2006); WYO. STAT. ANN. §
4-10-414 (Supp. 2005).
95. FREMONT-SMITH, supra note 6, at 178.
96. RESTATEMENT (SECOND) OF TRUSTS § 381 (1959).
97. Id. § 381 cmt. a.
98. Joseph A. DiClerico, Jr., Cy Pres:A Proposalfor Change, 47 B.U. L. REV. 153, 154-
55 (1967).
99. Sisson, supra note 86, at 648.
 MARQUETTE LAW REVIEW [90:127

of equity in ordering deviation."'" Equitable deviation "does not touch

the question of the purpose or [the] object of the trust, nor vary the class
of beneficiaries, nor divert the fund from the charitable purpose
designated.' '0 1 As opposed to cy pres, equitable deviation merely allows
"the trustees to deviate from the mechanical means of administrationof
the trust."' ' Courts, therefore, are far more willing to utilize the
doctrine of equitable deviation to modify "administrative provisions"
that are often indistinguishable from substantive provisions that would
otherwise require the use of the more unwieldy cy pres doctrine.

VI. RECENT CASE LAW

A. The Barnes Foundation

The Barnes Foundation is an excellent example of the need for a
broadened cy pres doctrine. Unforeseen circumstances, which
developed over the course of decades after the death of the settlor, led
one of the world's most famous art collections to the verge of
bankruptcy. 3 Although the foundation's assets were worth several
billion dollars, the restrictions placed on the charitable trust by an
eccentric settlor led the trust to the brink of financial ruin before a court
allowed certain changes to the inefficient provisions of the trust
instrument."° A broadened cy pres doctrine would have enabled a
court-in these extreme circumstances-to modify the eccentric
restrictions created by Dr. Barnes.
Dr. Albert Barnes was a famous chemist in the early twentieth
century and the self-proclaimed inventor of Argyrol.' 5 Dr. Barnes
retired from his profession in the early twentieth century, and he spent
his time and his fortune acquiring an impressive collection of artwork.'O

100. Daloia v. Franciscan Health Sys. of Cent. Ohio, 679 N.E.2d 1084, 1092 (Ohio 1997)
(quoting Craft v. Shroyer, 74 N.E.2d 589, 598 (Ohio Ct. App. 1947)) (emphasis omitted).
101. In re Estate of Craig, 848 P.2d 313, 321 (Ariz. Ct. App. 1992) (quoting Craft, 74
N.E.2d at 598).
102. Anderson v. Wolford, 604 N.E.2d 659, 664-65 n.12 (Ind. Ct. App. 1992) (quoting
Sendak v. Trs. of Purdue Univ., 279 N.E.2d 840, 845 (1972)) (emphasis added).
103. Carol Vogel, Judge Rules the Barnes Can Move to Philadelphia,N.Y. TIMES, Dec.
14, 2004, at Al.
104. See id.
105. HOWARD GREENFELD, THE DEVIL AND DR. BARNES 16, 21-22 (1987); see also
Toobin, supra note 5, at 35. Argyrol became a highly profitable treatment for various
inflammatory infections, but Hermann Hille, Dr. Barnes's business partner, actually created
the Argyrol compound. GREENFELD, supra, at 16,19.
106. Toobin, supra note 5, at 35.
20061 THE CYPRES DOCTRINE

Art critics criticized Barnes's artistic taste during his lifetime, but the
Barnes collection-including 181 Renoirs, 69 C6zannes, 59 Matisses-is
now reputed by many to be "the greatest private art collection in
American history."' ' After the death of many of the 01 8
artists, experts
estimated the collection to be worth billions of dollars.
Dr. Barnes had been shunned by high society and art critics, who
criticized his purchases; therefore, he displayed his artwork in a museum
that was open only to "plain people, that is, men and women who gain
their livelihood by daily toil in shops, factories, schools, stores, and
similar places."'1' Dr. Barnes built his museum in rural Merion,
Pennsylvania, and he strictly limited the number of visitors to the
museum."' In addition, Dr. Barnes refused to allow the museum to
charge admission or to host any fundraising events in the gallery."' Dr.
Barnes also had peculiar ideas concerning art education and
aesthetics.12 When Dr. Barnes died in 1951, he famously stipulated that
the Barnes Foundation should never lend, move, or sell a single painting
in the entire collection. 3 At that time, a meager $9 million endowment
supported the Barnes Foundation, and when the last of Dr. Barnes's
trustees died in 1988, the new trustee, Lincoln University, petitioned a
court to authorize deviation from the rules set forth by Dr. Barnes."4
The Barnes Foundation possessed a legendary art collection, but Dr.
Barnes's restrictions, including the museum's inability to lend paintings
and its inability to attract a large number of patrons, severely limited the
museum's ability to produce revenue." 5 The trust instrument held one
of the world's most prized art collections captive in a rural Pennsylvania
town where the collection was inaccessible to most art connoisseurs, and
the collection remained in a rapidly deteriorating building." 6 The
trustees of the Barnes Foundation finally received monetary support
from three other foundations to move the collection to a new facility in
Philadelphia." '7 The trustees of the Barnes Foundation petitioned a

107. Id. at 34.

108. Id.
109. Id. at 35.
110. Vogel, supra note 103, at Al.
111. Toobin, supra note 5, at 35.
112. Id.
113. Vogel, supra note 103, at Al.
114. Toobin, supra note 5, at 36-37.
115. See Vogel, supra note 103, at Al.
116. Id.
117. Id. The Annenberg Foundation, the Lenfest Foundation, and the Pew Charitable
 MARQUETTE LAW REVIEW [90:127

court to apply cy pres, and the court applied the doctrine, holding that it
could see "no viable alternative" other than moving the museum."'

B. The Bishop Estate

The Bishop Estate is another recent and noteworthy example of the
need for a broadened cy pres doctrine in limited circumstances. The
Bishop Estate possesses far more assets than necessary for the trust to
achieve its charitable purpose. The use of a broadened cy pres doctrine
would have helped the trustees to broaden the charitable purpose of the
trust and efficiently use the enormous assets that the settlor placed in
the charitable trust.
Princess Bernice Pauahi Bishop was the last surviving descendant of
King Kamehameha I. 9 When Princess Bishop died in 1884, she
founded a charitable trust, which became known as the Bishop Estate,
for the benefit of two schools. 2 ' Article thirteen of Princess Bishop's
will directed the trustees of the Bishop Estate "to erect and maintain in
the Hawaiian Islands two schools, each for boarding and day scholars,
one for boys and one for girls, to be known as, and called the
Kamehameha Schools."' 12' The will did not explicitly limit admission to
only Hawaiians, but her trustees had the discretion to decide who could
attend the schools. 122 Princess Bishop's will suggests that she envisioned
the trust funding two trade schools, which would also emphasize moral
and religious training. 123 Princess Bishop gave her trustees the power to
make specific rules and regulations regarding the operation of the
schools, but she ultimately wanted to create two schools that would
produce "good and industrious men and women."'24
Princess Bishop funded the Bishop Estate with her massive real
estate holdings 1lz At its inception, the trust corpus was already
enormous. 16 It included land with an estimated value of $470,000 and

Trusts provided pledges totaling $150 million to finance the construction of a new location for
the Barnes in Philadelphia. Id.
118. In re Barnes Found., No. 58,788, 2004 WL 2903655, at *19 (Pa. Ct. Com. P1. Dec. 13,
2004).
119. SAMUEL P. KING & RANDALL W. ROTH, BROKEN TRUST 26-28 (2006).
120. Id. at 31-32.
121. Id. at 31.
122. Id. Nevertheless, the trustees have long understood that Princess Bishop implicitly
intended that the schools would benefit primarily native Hawaiian children. See id. at 32.
123. Id.
124. Id.
125. Id.
126. Id.
2006] THE CY PRES DOCTRINE

an annual income of $36,000.127 At its peak, the trust owned 440,184

acres in Hawaii. 28 By the 1990s, modern travel and technology had led
to a massive increase in Hawaiian real estate prices, and the trust corpus
had an estimated value of $10 billion.12 9 The Bishop Estate became the
largest charity in the country: at the time, larger than the combined
endowments for Harvard and Yale."3 ° Each trustee received statutory
trustee fees of nearly $1 million every year, and the five members of the
Hawaii Supreme Court retained the power to appoint the trustees,
which led to a corrupt relationship and to severe conflicts of interest
among the trustees. 3 ' In the early 1990s, the size of the trust corpus had
become so large that the Kamehameha schools could no longer spend
all of the trust's annual income. "2 Due, in part, to the shrinking native
Hawaiian population and due to the increasing land values in the
Hawaiian Islands, the trust assets now produced more income than the
school could spend on every student enrolled at the Kamehameha
schools. 133

VII. REFORMING THE CY PRES DOCTRINE

A. The Modern Debate Surroundingthe Reform of the Cy Pres Doctrine

The argument for a broadened cy pres implicates the traditional
controversy surrounding the proper amount of dead-hand control.
Proponents of a narrow cy pres support the right of the testator to
control his or her wealth after death. Conversely, the proponents of a
broadened cy pres subordinate the intent of the settlor to the current
needs of society and to the most efficient use of the trust corpus. The
drafters of the UTC and the Restatement (Third) have answered the
proponents of a broadened cy pres doctrine by adding the term
wastefulness to their respective cy pres provisions."' This Comment's
proposal recognizes the need for reform of the cy pres doctrine, but it
argues that the current reform should apply only to trusts that have

127. Id.
128. Id.
129. Id. at 1.
130. Id.
131. Id. Princess Bishop vested the power to choose trustees in the members of Hawaii's
Supreme Court because they also served as the probate court for the Islands in the late
nineteenth century. Id. at 65.
132. Id. at 1.
133. Id.
134. See supra notes 91-94 and accompanying text.
 MARQUETTE LAW REVIEW [90:127

developed significant surpluses, thus preserving the intent of the settlor

and the incentive to accumulate wealth during one's life. Although no
rational settlor would desire to see his assets squandered on a purpose
that had been rendered inconsequential by the passage of time, many
settlors would not wish to place their assets in the hands of a judge
armed with an expansive cy pres. An effective solution to the
modification of charitable trusts must continue to support the settlor's
intent.
The modern reform of the cy pres doctrine, which has broadened the
circumstances to which the doctrine might apply, has its foundation in
the law and economics school of thought. Richard Posner defined the
economic purpose of the cy pres doctrine in his Economic Analysis of
Law as follows:

Where the continued enforcement of conditions in a

charitable gift is no longer economically feasible, because
of illegality ... or opportunity costs.... the court, rather
than declaring the gift void and transferring the property
to the residuary legatees (if any can be identified), will
authorize the administrators of the charitable trust to
apply the assets to a related (cy pres) purpose within the
general scope of the donor's intent.

Posner envisions a cy pres doctrine that is broader than the current

law in most jurisdictions. 3 6 Only those states that have enacted the
latest revision of the UTC or the Restatement (Third) consider the
existence of high opportunity costs sufficient to modify the purpose of
the trust. 137 In economic terms, one could consider a settlor's inefficient
devise to charity as a negative externality placed upon society. 3 ' A
settlor suffers from two conditions that may restrict the efficiency of his
or her devise. First, the settlor may not act rationally because he or she
does not incur the full costs of his or her actions after death. Second,
the settlor of a charitable trust is incapable of rationally foreseeing

135. RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW § 18.4 (6th ed. 2003).
136. Id.
137. See supra notes 91-94 and accompanying text.
138. Negative externalities are costs individuals impose on third parties; therefore,
rational individuals do not take those costs into account in their decision-making process.
Since the costs imposed on third parties do not enter the traditional marginal benefit-
marginal cost calculus of rational actors, an individual may decide to engage in a socially
inefficient activity because some or all of the costs associated with the activity fall on third
parties. See, e.g., POSNER, supra note 135, § 3.10.
2006] THE CY PRES DOCTRINE

changed circumstances that may affect the operation of a trust.

Economics, therefore, suggests that a settlor should not be able to
control the trust corpus indefinitely when circumstances unknown to the
settlor could render the trust purpose inefficient. Modern scholars
argue that no rational settlor would believe that his or her charitable
purpose should continue to bind society hundreds of years into the
future. As John Stuart Mill noted, "no reasonable man, who gave his
money, when living, for the benefit of the community, would have
desired that his mode of benefiting the community should be adhered to
when a better could be found."' 39 Nevertheless, a settlor establishes a
charitable trust for a purpose, and no settlor would wish to see that
purpose destroyed by a court wielding an expansive cy pres.
The broadened use of the cy pres doctrine is subject to three
criticisms.14 First, philosophical precepts involving democracy and
individual rights dictate that a court should not be able to interfere with
an individual's right to control property after death.' This argument
suggests that the settlor can best determine the highest and best use of
the trust assets. 142 The case of Presidentand Fellows of Harvard College
v. Society for Promoting Theological Education exemplified this
ideology when the court refused to apply the cy pres doctrine to alter
the terms of a trust.4 3 Responding to the trustees' request to change the
trust terms to what the trustees believed was a more effective use of the
trust, the court declared:

A contrary decision would furnish a precedent dangerous

to the perpetuity and sacredness of all our great public
charities, leaving the question of the management and
supervision of our public charities to be the subject of
change with every fluctuation of popular opinion as to
what may be the more expedient and useful mode of
administering them.'"

139. 1 JOHN STUART MILL, DISSERTATIONS AND DISCUSSIONS: POLITICAL,

PHILOSOPHICAL, AND HISTORICAL 36 (1882).
140. See, e.g., Sisson, supra note 86, at 649-51.
141. Edith L. Fisch, The Cy Pres Doctrineand ChangingPhilosophies,51 MICH. L. REV.
375, 380-83 (1953).
142. Id. at 382.
143. President and Fellows of Harvard Coll. v. Soc'y for Promoting Theological Educ.,
69 Mass. (3 Gray) 280, 301 (1855).
144. Id.
 MARQUETTE LAW REVIEW [90:127

The second argument against a broadened cy pres suggests that failing

to respect testamentary schemes of settlors will result in fewer gifts to
charity.14'5 Third, courts may also impede philanthropic variety by
altering trusts that serve causes that may otherwise be ignored except by
those settlors with a special interest in them."4 Ultimately, settlors
desire to control their charitable dispositions after their deaths;
therefore, this Comment offers three proposals to ensure that the
modern reform of the cy pres doctrine does not destroy the incentives
that promote charitable giving and the accumulation of wealth.

B. Three Proposalsfor Change

This Comment makes three basic proposals for the reform of the cy
pres doctrine. It recognizes that a minority of states has adopted the
latest revision of the UTC or the Restatement (Third), and it argues that
courts in those states should continue to apply the cy pres doctrine
narrowly in order to provide further incentive for charitable giving.
While the drafters of the UTC and the Restatement (Third) address a
valid concern in the law of charitable trusts, courts should construe the
term wastefulness narrowly, lest its expansive use should destroy the
incentive for potential settlors to leave funds in charitable trusts.

1. A Narrow Interpretation of Impossible, Impracticable,and Illegal

First, this Comment proposes that the terms impossible,
impracticable, and illegal should continue to have the same literal
interpretation that courts have applied for decades. Although the true
meaning of those terms has always been diaphanous, courts have
literally construed the meaning of these words for decades. This
proposal, standing alone, is not revolutionary. The drafters of the UTC
and the Restatement (Third) likely intended that courts should continue
to narrowly apply these terms; otherwise, the drafters would have made
more extensive revisions to their cy pres provisions. However, the rigid
adherence to a literal interpretation of these terms is fundamentally
important to the incentive to accumulate wealth and to make charitable
gifts. A court that relaxes the interpretation of impossible,

145. See, e.g., ARTHUR HOBHOUSE, THE DEAD HAND: ADDRESSES ON THE SUBJECT
OF ENDOWMENTS AND SETTLEMENTS OF PROPERTY 224-25 (1880) (reciting the argument
but ultimately contending that the proponents of this argument lack evidence and validity);
John S. Bradway, Tendencies in the Application of the Cy Pres Doctrine, 5 TEMP. L.Q. 489,
527-28 (1931).
146. HOBHOUSE, supra note 145, at 224-26.
2006] THE CY PRES DOCTRINE

impracticable, or illegal-allowing for a modification of the trust

purpose even when the operation of the trust was not quite impossible-
deters a settlor from placing funds in a charitable trust. Settlors desire
to place funds in the hands of trustees to serve a specified charitable
purpose; they do not seek to put their assets in the hands of a court
capable of altering a trust according to society's or to an individual
judge's whimsy.

2. A Narrow Interpretation of Wastefulness

Second, this Comment proposes that the term wastefulness should
allow a court to utilize the cy pres doctrine only when the trust has
experienced significant growth after the death of the settlor, resulting in
a significant trust surplus. Because few states have adopted the latest
revision of the UTC and the Restatement (Third), few courts have been
presented with the opportunity to interpret the term, and a broad
application of wastefulness could prove damaging to the amount of
charitable giving effectuated through charitable trusts.
Wastefulness has the potential to become the broadest term included
in the application of the cy pres doctrine. In opposition to the other
terms that allow a court to apply cy pres and to modify a charitable
purpose, a court could declare almost any purpose wasteful. For
example, a conservative-minded settlor may choose to fund a charitable
trust for the purpose of educating students in the principles of free-
market economics. Education is a valid charitable purpose, and the
settlor could select a trustee or trustees sympathetic to his or her
political viewpoint to further his or her intent in accordance with the
charitable purpose. However, the attorney general, who has standing to
sue under all charitable trusts by utilizing the common law power of
parens patriae,14 may not be sympathetic to the hypothetical,
conservative settlor. The attorney general may bring suit and convince a
similarly-minded judge to declare that the expenditure of even one
dollar from the trust corpus is wasteful, allowing for the modification of
the fundamental trust purpose. While this hypothetical approaches
hyperbole, courts have the potential to utilize their broadened cy pres
powers in many other circumstances that are not so extreme, thus
creating an environment far less amicable to charitable giving.
Since courts may easily abuse the cy pres doctrine by declaring any
purpose wasteful, a court should limit its application of cy pres, when it

147. BOGERT & BOGERT, supra note 7, § 411.

 MARQUETTE LAW REVIEW [90:127

utilizes wastefulness, through a two-prong test. A court should deem a

charitable purpose wasteful if the following prongs are met: (1) the trust
corpus has increased substantially after the settlor's death, and (2) the
trustee could not reasonably expend the entire trust income on the
original charitable purpose. Although one could criticize this proposal
for merely replacing one diaphanous term, wastefulness, with two more
terms, substantially and reasonably,it should provide some guidance to a
court that seeks to preserve the settlor's intent.
In addition to the two-prong test, a court should further limit its cy
pres powers when invoking wastefulness by applying cy pres to only the
surplus portion of the trust. A court should preserve the original trust
corpus for the original charitable purpose, allowing the tesator's original
intent to remain intact. A simple number is not sufficient to quantify
the original trust corpus. A rational donor anticipates that his or her
trustee will invest the corpus in accordance with reasonable and prudent
standards required by a fiduciary duty. Therefore, the original trust
corpus, calculated when a court decides an action for cy pres, should
equal the amount that the original trust corpus would have amassed to
while holding a trustee to his or her fiduciary duty-whether or not the
trust corpus actually equals such an amount at the time of the action. A
court will further promote charitable giving and the incentive to
accumulate wealth by limiting its cy pres power to the surplus portion of
the trust when the application of the entire trust income to the original
charitable purpose has become wasteful.
3. Destroying the Cy Pres and Equitable Deviation Dichotomy
Third, this Comment adopts Johnson's proposal to collapse the
distinction between the cy pres doctrine and the equitable deviation
doctrine because courts are able to manipulate the equitable deviation
doctrine too easily."u The distinction between the two doctrines has
become meaningless, and courts commonly consider the outcome under
both doctrines prior to determining which doctrine to apply. 149 Johnson
argues that courts should develop firm and predictable rules, and since
courts no longer have a principled basis to distinguish the equitable
deviation doctrine, it should be absorbed by the cy pres doctrine,

148. Johnson, supra note 52, at 380. Johnson also argues that a narrow cy pres doctrine
should apply during the first twenty-one years after the testator's death, and a broadened cy
pres should apply thereafter. Id. at 381-86.
149. Id. (describing this process as "peek[ing]" at the outcome before applying either
doctrine).
20061 THE CY PRES DOCTRINE

resulting in a singular doctrine that a court may apply consistently. 5 '

This final proposal is necessary to effectuate the narrowing purpose
of the prior proposals because any court could propone a narrow
interpretation of the cy pres doctrine in theory but usurp the settlor's
rightful control by applying the equitable deviation doctrine in its stead.
A court will acutely diminish the incentive to accumulate wealth and the
promotion of charitable giving by failing to properly restrict its
application of the equitable deviation doctrine. Since the temptation to
misuse the doctrine has proved too great in the past, courts should be
deprived of the equitable deviation doctrine because the broadened cy
pres in the UTC and the latest Restatement are sufficient to promote
the effectiveness and the efficiency of charitable trusts in the face of
changing circumstances.

C. Application of the Three ProposedReforms of the Cy Pres Doctrine

The Barnes Foundation and the Bishop Estate are two examples of
the circumstances under which a court would be able to apply this
Comment's modified cy pres doctrine by declaring the charitable
purpose wasteful. The three proposals recognize that rational settlors
cannot foresee future circumstances that may render a charitable
purpose ineffective or inefficient, but the cy pres doctrine should apply
only in extreme circumstances when the current operation of the trust
has become wasteful. Both examples would satisfy the two-prong test
proposed in this Comment. The trust corpus of both trusts increased
substantially, and the growth in trust assets occurred after the death of
the settlor.
The second proposal of this Comment, therefore, would limit a
court's application of the cy pres doctrine to the surplus trust corpus-
calculated as the excess over the original trust corpus increased by an
expected rate of return-that a rational settlor would have been unlikely
to apply to the original trust purpose. The Barnes Foundation and the
Bishop Estate represent examples of charitable trusts where the settlor
was unlikely to anticipate the changed circumstances that would
significantly change their trusts after their death. Dr. Barnes could
hardly have anticipated the importance and the value of a world-
renowned art collection, which contemporary art critics had shunned
during his lifetime. Similarly, Princess Bishop could not have foreseen
the future of the Hawaiian Islands, the development of modern travel

150. Id.
 MARQUETTE LAW REVIEW [90:127

and tourism, and the massive increase in the trust corpus that occurred
after her death. In these circumstances, courts are presented with
extreme circumstances where the benefit to society of modifying the
trust is far greater than the harm to society of altering a testator's intent.
The proposals in this Comment attempt to attain a careful balance
between the circumstances under which society requires the
modification of a charitable trust and the circumstances under which a
court harms society by destroying the incentives that promote charitable
giving.

VIII. CONCLUSION
Charities have played an important role in American society, and
many worthy causes rely on their contributions. Courts have favored
charitable trusts by removing many of the typical restraints applicable to
private trusts. The favored status of the charitable trust, however, has
rendered some trusts ineffective and inefficient with the passage of time.
Modern science and technology, for example, have the ability to render
charitable purposes inefficient shortly after the settlor's death. When
courts developed the cy pres doctrine hundreds of years ago, settlors
never imagined that certain ailments or diseases would cease to exist in
the future. Today, modern science, for example, has the ability to
render an early-twentieth century trust, which the settlor established for
the purpose of benefiting individuals afflicted with polio, ineffective and
inefficient within a few decades. Modern scholars have seen the need
for change by broadening the latest model cy pres provisions. Despite
the need for change, courts must exhibit self-restraint with their
newfound ability to apply a broader cy pres doctrine.
To ensure that society continues to promote charitable giving and to
promote the accumulation of wealth during a settlor's lifetime, this
Comment makes three proposals to protect testator intent. The first
proposal merely protects the application of the current law. Courts
should continue to literally interpret the terms impossible, impracticable,
or illegal. The second proposal is more complex. Since a court could
broadly interpret wastefulness, thus allowing a court to apply cy pres in
an expansive range of circumstances, courts should exhibit judicial
restraint by limiting the application of cy pres to only the surplus trust
corpus of a charitable trust. Finally, the third proposal prevents a
determined court from avoiding the restrictions created by the
preceding proposals. The third proposal eliminates the equitable
deviation doctrine, requiring a court to apply cy pres to modify a trust
that is in need of reform. All three proposals endeavor to address the
20061 THE CY PRES DOCTRINE

concerns of modern scholars, but this Comment attempts to offer a

solution that continues to provide adequate incentives for potential
settlors to place their assets in trust to benefit a charitable cause.

ERIC G. PEARSON*

* The author would like to thank Professors Vada Waters Lindsey and Judith
McMullen for their encouragement and for their helpful advice on an earlier draft.
* * *