## Facts

- Robert Alexander graduated from the United States Coast Guard Academy (the Academy) and served 34 years in the Coast Guard, retiring as a captain.
- Alexander had a lifelong interest in physics and chemistry.
- At Alexander’s death, his only living relatives were half-nieces and half-nephews.
- Alexander’s will gave each of those relatives $50,000.
- The will left the remainder of his estate—worth more than $1 million—to the Academy.
- The will directed that the residue be used to create a scholarship trust fund named for Alexander and his older brother (also an Academy graduate).
- Under the will’s terms, the trust’s annual income was to be paid to the Academy graduate with the highest grade point average in chemistry and physics.
- The expected annual income of the trust ranged from about $65,000 to $130,000.
- The will did not contain a “gift over” specifying an alternate beneficiary if the trust failed.
- The Academy petitioned the court to modify the scholarship terms under the cy pres doctrine, asserting that awarding such a large sum to a single cadet would likely create unhealthy competition and conflict with the Academy’s emphasis on teamwork and public service, and would disadvantage cadets in other majors.
- Alexander’s relatives opposed the petition, arguing the scholarship terms could not be changed; if the trust could not be carried out as written, they contended the gift should fail and the funds should pass to them by intestacy.

## Issues

1. May a court apply the cy pres doctrine to modify the terms of a testamentary charitable scholarship trust when compliance with the literal terms is impracticable and the will shows a general charitable intent to benefit the Coast Guard Academy?

## Decision

- The court applied cy pres and permitted modification of the scholarship trust rather than letting the gift fail.
- The court found the bequest reflected a general charitable intent to benefit the Academy and its cadets (particularly in chemistry and physics), not a strictly limited intent that required one very large annual payment to a single recipient.
- Because the trust’s projected annual payout was unusually large for a single cadet and the Academy showed that administering the award as written would be impracticable in light of the Academy’s educational mission and environment, equitable modification was appropriate.
- The relatives’ request to treat the charitable gift as failed and distribute the property by intestacy was rejected.

## Legal Principles

- A charitable trust will not be allowed to fail when the donor shows a general charitable intent and the particular method specified in the instrument becomes illegal, impossible, or impracticable; instead, a court may order a use “as near as possible” to the donor’s charitable purpose (cy pres).
- In deciding whether cy pres applies, courts distinguish between (a) general charitable intent (a broad desire to benefit a charitable institution or purpose) and (b) a specific, narrow intent tied to a single, rigid method; cy pres is available when general charitable intent is found.
- The absence of an alternate taker (“gift over”) can support use of cy pres because it indicates the donor intended the property to remain devoted to charity rather than revert to heirs if the original plan cannot be carried out as written.
- When a charitable beneficiary shows that literal compliance would likely cause substantial practical problems inconsistent with the institution’s functioning, a court may approve a revised administration that keeps faith with the donor’s stated objective (here, scholarship support connected to chemistry and physics at the Academy).

## Conclusion

In *United States v. Cerio*, 831 F. Supp. 530 (E.D. Va. 1993), the court addressed a testamentary gift creating a large scholarship trust for the Coast Guard Academy and held that cy pres permitted modification of the trust’s literal terms because administering a single, very large annual award was impracticable and the will demonstrated a general charitable intent to benefit the Academy rather than to require one inflexible scholarship format; accordingly, the charitable gift did not fail into intestacy for the testator’s relatives.


United States v. Cerio, 831 F. Supp. 530 (1993)