When Charitable Gifts Don't Go According To Plan

If you intend to make, or have already made, charitable gifts in your will, there is an interesting aspect of charitable giving that you may not have considered. What happens if the charity you named no longer exists, cannot receive the gift, or circumstances have changed such that your gift cannot be carried out as intended? In certain circumstances, the cy-près doctrine may preserve the gift and ensure that your charitable intentions are honoured.

What Does Cy-Près Mean and What is the Cy-Près Doctrine?

Cy-près is short for the medieval French phrase cy-près comme possible, meaning "as near as possible." The doctrine enables the court to prevent the failure of certain charitable gifts and permits the property to be applied for another charitable purpose that most closely resembles the donor's original intention.
 

When Can the Cy-Près Doctrine be Applied? 

The cy-près doctrine may be used by the court if:

1. the charitable gift in the will is impractical or impossible;
    
2. the testator manifested a general charitable intention in making the charitable gift in the will; and
    
3. the gift to the alternative institution or organization would be a gift resembling the initial purpose of the gift in the will.

The above applies where the impracticability or impossibility exists at the date of the testator's death. Different considerations apply where the charitable purpose becomes impracticable or impossible after the testator's death, which is beyond the scope of this blog.

A charitable gift may be impractical or impossible if, for example, the named charity no longer exists; the charity is incorrectly identified in the will; the charity's registration has been revoked by the Canada Revenue Agency; the charity is unable to accept the gift; or the charitable purpose can no longer reasonably be fulfilled.

In determining whether a testator had a general charitable intention, the court may consider factors such as:

• whether the gift was made without limitation to an institution that is admittedly charitable;
   
• whether the charitable gift formed part of the residue of the estate;
   
• whether adequate provision had already been made for family members or next of kin;
   
• whether there was an absence of a gift-over clause in the event the charitable gift failed; and
   
• whether the will contained gifts to multiple charitable organizations.

The Cy-près Doctrine in Practice  

For discussion: Allan et al. v. Thunder Bay Regional et al., 2024 ONSC 3260

Lawrence Iwachewski executed a will on February 5, 2001 (the "Will"), followed by a handwritten document dated December 10, 2019 (the "Codicil"). The Codicil had not been properly executed, and the court first considered whether it could nevertheless be validated under Ontario's substantial compliance provisions. The court ultimately concluded that the Codicil was valid.

Lawrence’s Will provided as follows: to ‘pay or transfer the remainder of the residue of my estate to those service organizations who are looking after and providing care to my mother immediately preceding her death, for their own use and benefit absolutely’. The Codicil added "Thunder Bay Regional Hospital" as a recipient of a charitable donation.

The court noted that when Lawrence executed his Will in 2001, Thunder Bay was served by the Port Arthur General Hospital on the north side of the city and the McKellar General Hospital on the south side, both serving the citizens of Thunder Bay. The Thunder Bay Regional Health Sciences Centre was opened in 2004 and replaced the older hospitals by the time the Codicil was made, but it was the Thunder Bay Regional Health Sciences Foundation, which was established subsequently, which supported and fund-raised for the hospital.

Further, the court concluded that, as Lawrence’s mother had died by the time he prepared the Codicil, Lawrence was referring to benefitting organizations that had provided care to his mother during her lifetime. 

The applicants submitted that Lawrence’s mother received care from multiple organizations, including Thunder Bay Regional Health Sciences Centre, and to track down the various other organizations that had assisted his mother would be onerous.

As well, Lawrence had indicated to multiple people, including just before his passing, that he wished to leave his estate to Thunder Bay Regional Health Sciences Centre and that he wished to have his gift recognized by a plaque on the wall.

The court determined that it was impracticable to carry out Lawrence’s intention to benefit all the organizations that had assisted his mother during her lifetime and that Lawrence had a general charitable intention to benefit Thunder Bay Regional Health Sciences Centre.

Applying the cy-près doctrine, the court ordered that the Thunder Bay Regional Health Sciences Foundation receive the residue of Lawrence's estate under the Will and Codicil.
 

Key Takeaways

The cy-près doctrine is a valuable tool that can prevent charitable gifts from failing when circumstances make it impossible or impracticable to carry out a testator's wishes exactly as expressed.

By allowing the court to redirect a gift to a charitable purpose that closely aligns with the donor's original intention, the doctrine helps ensure that charitable objectives are ultimately fulfilled.

Nevertheless, a cy-près application can involve additional costs and delays. To minimize the likelihood of such an application being required, will drafters should take care to accurately identify charitable beneficiaries and to include provisions to allow the executors to apply a charitable gift to another charity if, for example, the charity no longer exists, its name is changed, it amalgamated with another charity, or the gift cannot be carried out.

Individuals should also periodically review their will to ensure that the charities named remain in existence and that their testamentary wishes continue to reflect their intentions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.