Wills and Trusts Bar Practice Exam

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1 / 20

What happens when a stated charitable purpose can no longer be accomplished?

The trust automatically terminates

The trust is invalidated by law

The trust may be reformed under cy pres

When a stated charitable purpose can no longer be accomplished, the appropriate legal doctrine applied is cy pres, which allows for the reformation of a trust. This doctrine is rooted in the principle that a charitable trust should be allowed to fulfill its general purpose even if the specific objective originally outlined in the trust document is no longer achievable.

Under cy pres, a court can modify the terms of the trust to direct the assets towards a related charitable purpose that aligns closely with the original intent of the settlor. This ensures that the trust continues to benefit the community or fulfill philanthropic aims, rather than being rendered completely ineffective due to unforeseen circumstances that have made the original purpose unattainable.

Thus, in situations where the stated charitable purpose is no longer feasible, the correct response is to apply the cy pres doctrine to adjust the trust's terms and maintain its relevance and effectiveness in serving charitable causes.

The trust beneficiaries receive personal compensation

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