Which outcome occurs when a charitable trust fails?

Which outcome occurs when a charitable trust fails?

• A. Return to settlor
• B. Escheat to state
• C. Perpetual survival
• D. Cy pres modification

Answer: (A)

When a charitable trust cannot be carried out at all, the property is returned to the settlor. The donor’s transfer was for a charitable purpose, and if no valid charitable beneficiary remains, there’s no public-spirited use to preserve. Returning the assets to the donor honors the original intent by restoring ownership to the person who created the gift. Cy pres comes into play only when there is still a charitable purpose that can be satisfied by redirecting the gift to a similar charity; it’s not the default when the trust’s entire charitable purpose has failed. Escheat to the state and perpetual survival aren’t the automatic outcomes in this situation.

When a charitable trust cannot be carried out at all, the property is returned to the settlor. The donor’s transfer was for a charitable purpose, and if no valid charitable beneficiary remains, there’s no public-spirited use to preserve. Returning the assets to the donor honors the original intent by restoring ownership to the person who created the gift. Cy pres comes into play only when there is still a charitable purpose that can be satisfied by redirecting the gift to a similar charity; it’s not the default when the trust’s entire charitable purpose has failed. Escheat to the state and perpetual survival aren’t the automatic outcomes in this situation.