Publication Date

2009

Abstract

With its enactment in 2, Section 413 of the Uniform Trust Code (UTC) introduced the most recent, and important, revision to a court's cy pres power since the nineteenth century. Section 413 expands the court's power to redistribute the assets of failing charitable trusts by transforming one of the traditional elements of cy pres into a presumption, abandoning the traditional cy pres redistribution standard, and providing an additional justification for the exercise of the power. Although scholars have scrutinized other portions of the UTC, the UTC's reconfigured cy pres has failed to provoke scholarly discussion even though it has been adopted by twenty-one jurisdictions. Notably, the vacuum of scholarly examination of UTC Section 413 intersects what has been described as “the largest intergenerational wealth transfer in history.” Estimates suggest that charities alone stand to receive up to $24.8 trillion over the next several decades and some of those assets will undoubtedly be held in charitable trusts. Thus, the merger of UTC Section 413 with the massive wealth transfer over the next decades means that courts will wield increasing power to redistribute enormous sums of charitable resources as the objectives of some charitable trusts become obsolete in the future. This Article fills that scholarly void by subjecting the modifications to cy pres 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. The Article begins by outlining 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. The historical shift represented by UTC Section 413 tilts the theoretical balance of interests too far toward the public interest and fails to fulfill its underlying goal of promoting efficient use of scare resources. To counter these theoretical and efficiency concerns, the Article proposes replacing the UTC's presumption of general charitable intent with a presumption of specific charitable *138 intent. Although presuming specific charitable intent is likely to result in an increase in cy pres denials, 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. In the end, a presumption of specific charitable intent not only serves as a counterweight to the trend of increasing paternalism associated with charity law, but also ultimately benefits the public by reducing litigation costs.

Download

Share

COinS