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Effect of cy-près Principle on Trust Law - O’Keeffe and Stiglitz’s Inheritance -

  • Legal Theory & Practice Review
  • Abbr : LTPR
  • 2020, 8(1), pp.73-94
  • Publisher : The Korea Society for Legal Theory and Practice Inc.
  • Research Area : Social Science > Law
  • Received : February 7, 2020
  • Accepted : February 23, 2020
  • Published : February 28, 2020

Jongho Kim 1

1호서대학교

Candidate

ABSTRACT

The cy-près principle is the first legal rule to appear in equity courts. French legal terminology literally means ‘close or access’ and can be translated to ‘as much as possible.’ This principle originated in the Charity Trust Act but was applied in the context of reconciliation or agreements in the US class action. The cy-près Principles, applied in England and Wales, have limited the severity of the rule that, in certain circumstances, permanent transfers are made to any situation where property disposed for the benefit of someone other than a legal heir is forfeited. Then the restriction on permanent transfer was abolished, and modern application of the cy-près Principle occurred mainly with regard to charities. For this principle, which is permitted under Anglo-Saxon law, is the most important principle in maintaining general public purposes, not private interests in trust relations. The Charity Committee of England and Wales has the legal authority to apply the cy-près Principles on behalf of charities if no custodian remains on behalf of the charity or if the necessary delegation cannot be agreed. This power extends to corporate charities or non-corporated associations to which the common law rules do not apply. The cy-près Principle does not apply if the charity has the alternative authority to reassign trust assets under the by-laws. In the jurisdictions (or in relation to the UK’s foreign charity assets) that the UK retained the cy-près Principles but did not have the same identity as the UK and Wales Charitable Commissions, the Charity Committee later relied upon the cy-près Principles entered into an agreement. In the United States, there is a Uniform Trust Code (“UTC”), a model code that can be used to resolve disputes in various jurisdictions. UTC explains that cy-près applies only to charitable trusts for which the original specific trust objectives are impossible or impractical, and that the trust conditions do not specify what should happen in such circumstances. In part, UTC applies the cy pres principle to be consistent with “the purpose of the Setter’s Charity, in order to modify or terminate the trust,” where a particular charity becomes illegal, impracticable, unattainable or wasted. However, UTC does not allow the court to apply the cy-près Principle to courts, including charities, if the provisions of the terms of the charitable trust allow the trust property to be distributed to beneficiaries of the trust. It also cannot be used to violate the rules of perpetuity. UTC also includes the cy-près principle on trusts where charity is no longer possible. The court stipulates that if an amendment or termination further develops the purpose of the trust due to circumstances beyond the court’s expectations, the court may amend the administrative or dispositional conditions of the trust or terminate the trust. This study examined the effect of the cy-près principle on the Trust Act in cases where the O’Keeffe and Stiglitz heritage was established as a trust, but later changes were made to breach trust term.

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