Estate Planning Newsletter

• Court-Imposed Transfers: Constructive Trusts
  A constructive trust is a remedy imposed by a court when a person has wrongfully attained property in an inappropriate way. The court will undo the transaction and order that title to the property go to the rightful... Read more.
• Income Tax Limitations on the Charitable Deduction
  Taxpayers who make contributions to qualified charitable organizations are entitled to a tax benefit in the form of a charitable deduction on their income taxes. However, the issue becomes more complex when a non-U.S. citizen makes a... Read more.
• Estate Planning for Non-Citizen Spouses
  A QDOT is a specific type of marital deduction trust that is designed to ensure that non-citizen spouses will eventually pay any taxes that may be due upon distribution of the principal from the trust, even if the surviving spouse... Read more.
• Taxation of Long-Term Care Insurance
  People are living longer, but for many a reality of aging is that at some point they are unable to care for themselves. The costs of retirement homes and in-home care are rising, generating concerns for many on how to pay for the cost... Read more.

• Estate Planning for Single Parents
• Capacity is central to valid estate planning
• 4 Estate Planning Myths That Refuse To Die
• Five reasons you should have an updated will — and estate plan
• Astute Estate Planning For Art, Antiques And Valuable Collectibles

The Cy Pres Rule

If you create an estate planning document leaving property to a charity, but after your death the transfer cannot occur, the court may apply the cy pres rule.

The words “cy pres” are French for “as near.” If your charitable wishes cannot be achieved, the court uses this doctrine to attempt to fulfill your wishes as near to your original wishes as possible.

Why a Gift May Be Non-Transferable

Your charitable gift may not be transferable to your chosen charity because that charity:

• Refuses to accept it
• Could not be identified
• No longer exists on the date of your death

Additionally, a gift may not be possible due to the fact that you:

• Identified more than one charity in an ambiguous manner
• Failed to name a specific charity as recipient
• Failed to specify a charitable purpose

Under cy pres, when your charitable gift cannot be transferred to the organization specified in your trust, it may be given to a related charity that has a related charitable purpose.

Limited Application

The cy pres rule typically will not be applied unless there is no way your particular charitable purpose is possible. Courts are reluctant to second guess intent, so the rule may not be applied if you have not clearly articulated a charitable intent.

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