Ark. Code Ann. § 28-73-413 (2020)
Cy pres
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Except as otherwise provided in subsection (b), if a particular charitable purpose becomes unlawful, impracticable, impossible to achieve, or wasteful:
- the trust does not fail, in whole or in part;
- the trust property does not revert to the settlor or the settlor's successors in interest; and
- a court may apply cy pres to modify or terminate the trust by directing that the trust property be applied or distributed, in whole or in part, in a manner consistent with the settlor's charitable purposes.
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A provision in the terms of a charitable trust that would result in distribution of the trust property to a noncharitable beneficiary prevails over the power of a court under subsection (a) to apply cy pres to modify or terminate the trust only if, when the provision takes effect:
- the trust property is to revert to the settlor and the settlor is still living; or
- less than thirty (30) years have elapsed since the date of the trust's creation.
History. Acts 2005, No. 1031, § 1.
Case Notes
Doctrine Applicable.
While the regional medical center was not the same entity as the hospital that the decedent left the remainder of his property to if the named beneficiaries predeceased him, the regional medical center was the appropriate cy pres beneficiary because the entity that operated the hospital was the intended object of the decedent's bequest and the decedent had the charitable intent to promote public health when he made the devise to the hospital. Thus, the circuit court did not err in deciding that the decedent's estate should be used to further the patient-care and community programs that a new clinic would provide the community, and it fashioned a use for the funds as near to the decedent's intent as possible under the circumstances. In re Estate of Alexander, 2017 Ark. App. 588, 533 S.W.3d 618 (2017).
Doctrine Inapplicable.
Circuit court erred in applying the cy pres doctrine to reform a testamentary trust because the testator created the trust for the administration of four life estates with the remainder to two churches, which vested on the testator's death, there was no provision that the devise was to serve a charitable purpose or that restricted the churches from using the proceeds for noncharitable purposes, and neither the trustee nor the churches was directed to ensure that the use of the property be for a purpose benefiting any charity. Covenant Presbytery v. First Baptist Church, 2016 Ark. 138, 489 S.W.3d 153 (2016).