## Facts

- The settlor created a revocable living trust providing for payment of debts, specific gifts, and distribution of the residuary among three named charitable institutions.
- The trust directed that 20% of the residuary be distributed to “St. Mary’s Roman Catholic School” in Oneonta, New York.
- At the settlor’s death, St. Mary’s School had been closed for several years, its property had been sold, and there was no local successor parochial school.
- The trustee sought instructions to treat the school’s share as a failed gift and to distribute that portion to the other two named residuary charitable beneficiaries.
- St. Mary’s Church and the Roman Catholic Diocese of Albany opposed, arguing the gift should be redirected under cy pres to a parish ministry and a diocesan scholarship program for Catholic education.
- The Surrogate’s Court directed distribution of the failed share to the remaining residuary charitable beneficiaries; the church and diocese appealed.

## Issues

1. When a specifically named charitable beneficiary no longer exists at the settlor’s death and has no successor, must the gift be redirected under cy pres, or treated as failed and distributed to the remaining residuary charitable beneficiaries?
2. Did the trust reflect a general charitable intent favoring Catholic education, or a specific intent to benefit particular Oneonta institutions as named?

## Decision

- The Appellate Division, Third Department affirmed the Surrogate’s Court’s order.
- The court held the gift to St. Mary’s School failed because the named institution did not exist at the settlor’s death and had no successor.
- The court declined to apply cy pres and rejected redirecting the gift to the church’s or diocese’s proposed Catholic purposes.
- The court approved distributing the failed share to the remaining named residuary charitable beneficiaries under governing residuary distribution rules.

## Legal Principles

- Cy pres requires proof of a general charitable intent; it is not applied where the instrument shows an intent to benefit specific named institutions rather than a broader charitable purpose.
- A testamentary or trust gift to a specifically named institution that no longer exists at the donor’s death may be treated as a failed gift absent evidence justifying cy pres.
- Where one of multiple residuary beneficiaries cannot take, the failed share may pass to the remaining residuary beneficiaries according to the trust’s structure and applicable statutory distribution rules.

## Conclusion

Because the trust’s charitable scheme was focused on particular Oneonta institutions and did not show a broader intent to support Catholic education generally, the closure of St. Mary’s School caused the gift to fail, and the 20% residuary share was properly distributed to the remaining named residuary charities rather than redirected under cy pres.


In re a Trust Created by Gurney, 152 A.D.3d 1122, 59 N.Y.S.3d 587 (N.Y. App. Div. 3d Dep’t 2017)