Thursday, April 28, 2011
Alberto B. Lopez (Professor of Law, Salmon P. Chase College of Law, Northern Kentucky University) recently published his article entitled A Revaluation of Cy Pres Redux, 78 U. Cin. L. Rev. 1307 (2010). An excerpt from the introduction is below:
Although cy pres doctrine has remained relatively staid over time, the doctrine received a legislative makeover during the latter twentieth century that has continued into the twenty-first century. The most recent revision to the doctrine of cy pres is contained in the Uniform Trust Code (UTC). The UTC transforms one of the traditional elements of cy pres--finding general charitable intent--into a presumption that can be rebutted by the party opposing the application of the doctrine. Furthermore, the UTC abandons the traditional “as near as possible” standard for redistributing cy pres assets and provides an additional ground to justify the exercise of cy pres. These changes not only represent the most recent reconfiguration of the doctrine, but also the most important modifications of cy pres since the early twentieth century. As evidence of its importance, the UTC has been adopted in twenty-one jurisdictions and bills proposing its adoption are making the legislative rounds in several states. If the trend continues, the UTC's version of cy pres will soon become a majority rule.
A wave of commentary has been aimed at portions of the UTC involving subjects such as special and supplemental needs trusts and the information available to beneficiaries, but the UTC's cy pres has barely elicited a whisper from commentators. The paucity of cy pres analysis under the UTC stands in stark contrast to the criticism directed at the versions of cy pres contained in the Restatement (First and Second) of Trusts. Scholars have long argued for an expansion of cy pres to prevent spending charitable dollars on antiquated charitable objectives simply out of respect for the dead hand. If silence can be equated with approval, the scholarly community welcomes the liberalization of cy pres represented by the changes to the power under the UTC.
This Article fills that scholarly void by subjecting the modifications to cy pres doctrine introduced by the UTC to a critical evaluation and offers a view of the UTC's cy pres that is contrary to its perceived acceptance. Part II traces the evolution of cy pres in England and the United States through the promulgation of the UTC to highlight the substantial differences between the UTC's cy pres and its traditional ancestor. Part III of this Article demonstrates that the departure from history cleaved by UTC Section 413 tilts the theoretical balance of interests associated with cy pres too far toward the public interest and fails to fulfill its underlying goal of promoting efficient use of scare resources. To counter the theoretical and efficiency concerns associated with the UTC's cy pres, Part IV proposes replacing the UTC's presumption of general charitable intent with a presumption of specific charitable intent. Although presuming specific charitable intent is likely to result in an increase in cy pres denials, Part V argues that presuming specific charitable intent benefits charity generally by increasing the number of charities that will receive assets via cy pres without any loss in efficiency. The Article concludes that a presumption of specific charitable intent not only serves as a counterweight to the increasing paternalism of charity law, but also ultimately benefits the public by reducing ambiguity in the law, thereby saving litigation costs.