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Question 1
Zachary was a sports enthusiast. In high school, he played on the school's baseball team. To promote his interest, Zachary established a trust to specifically support the efforts of his former high school's baseball team. Due to budget cuts, five years after the trust was established (and two years after Zachary's death), the school eliminated the baseball team. Another high school on the other side of town still had an active baseball team. The court would:
Correct
Incorrect!
Correct In order for the cy pres doctrine to apply, the charitable purpose chosen by the settlor must be impossible to fulfill and there had to be a general charitable intention in the trust. Here, Zachary was very specific about his desire that the trust funds be used only to support the school's baseball team. As such, it is unlikely that he would approve of any of the alternatives. Accordingly, the trust would terminate and the remaining funds would revert to his heirs via a resulting trust.
Incorrect! In order for the cy pres doctrine to apply, the charitable purpose chosen by the settlor must be impossible to fulfill and there had to be a general charitable intention in the trust. Here, Zachary was very specific about his desire that the trust funds be used only to support the school's baseball team. As such, it is unlikely that he would approve of any of the alternatives. Accordingly, the trust would terminate and the remaining funds would revert to his heirs via a resulting trust.
Correct
Incorrect!
Question 2
Clifford was a resident of Marin County (the most affluent county in the San Francisco Bay Area), CA when he died. The trust he established directed that his assets be used to provide care for the needy in Marin County, in addition to other nonprofit charitable, religious or educational purposes in that county. A windfall was bestowed on the trust, causing its assets to mushroom to $300 million (from $9 million). Other counties petitioned the court to be able to tap into the surplus funds. The court would:
Correct
Incorrect!
Correct Cy pres applies only where the purpose of a trust has become illegal, impossible or permanently impracticable of performance and the testator manifested a general charitable intention. Here, Clifford had a specific purpose of helping Marin County charitable organizations. Those interests still exist; therefore, the trust's purpose is still viable. Accordingly, the court would deny the petitioners' request and the funds would continue to be used only in Marin County. See, e.g., In re Estate of Buck, 21 U.S.F.L. Rev. 691 (Cal. Sup. Ct. 1986).
Incorrect! Cy pres applies only where the purpose of a trust has become illegal, impossible or permanently impracticable of performance and the testator manifested a general charitable intention. Here, Clifford had a specific purpose of helping Marin County charitable organizations. Those interests still exist; therefore, the trust's purpose is still viable. Accordingly, the court would deny the petitioners' request and the funds would continue to be used only in Marin County. See, e.g., In re Estate of Buck, 21 U.S.F.L. Rev. 691 (Cal. Sup. Ct. 1986).