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An overview of the "cy-pres doctrine" and charitable trusts

Many people in New Jersey are finding out that it can be very beneficial to establish a charitable trust as part of an estate plan. These types of trusts allow a person or family to make sure that a significant part of their assets are designated to help a cause in which they believe deeply. However, as with many things in life, sometimes the purpose of these trusts can be frustrated in some way. In estate planning law, issues with charitable trusts can sometimes invoke what is known as the "cy-pres doctrine."

So, what is this legal doctrine and how does it impact charitable trusts? Well, in essence, this is a doctrine which allows the funds or assets in the charitable trust to still be used by the designated charity if the original purpose of the trust is no longer possible to complete. Say, for instance, that a charitable trust is established with the general intent to help the charity, but with the hope that the funds would be used for the specific purpose of funding the construction of a particular building for the charity in question. But, it is later learned that the building in question cannot be constructed for some reason. The cy-pres doctrine still allows the use of those funds by the charity for other reasons, as long as the purpose is as "nearly like" the original intent as possible.

There are two findings that must be made in court in order for the cy-pres doctrine to apply. First, it must be shown that the original intent of the charitable trust can no longer be completed. Next, it must be shown that the intent of the charitable trust was general, as opposed to specific, in nature.

Along with the cy-pres doctrine, there are a lot of legal issues that can pop up when New Jersey residents are thinking about their estate plans. Those who have specific goals in mind will want to make sure that they get the right information.

Source: nationalparalegal.edu, "Modification of Charitable Trusts-The Cy Pres Doctrine," Accessed April 30, 2017

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