Charitable trusts are designed to exist in perpetuity, but over time, their original purpose can become outdated, impractical, or impossible to fulfil. A bequest may be made to a charity that no longer exists, or the social circumstances that the trust was designed to address may have fundamentally changed. In these situations, trustees have a duty to ensure the trust’s assets continue to be used effectively for charity, which often requires a formal variation of the trust’s terms.
Our Expertise in Charitable Trust Variation
- Cy-près Schemes & Statutory Variation: The French term ‘cy-près’ means ‘as near as possible’. Our firm is highly experienced in preparing applications to the Supreme Court for cy-près schemes, which allow a trust’s purpose to be altered to one that is as near as possible to the founder’s original charitable intent. In South Australia, this equitable doctrine is supplemented by a broader statutory power under section 69B of the Trustee Act 1936 (SA), which permits the Court to approve a scheme for the alteration of a charitable trust beyond the strict criteria of impossibility or impracticability.
- Navigating the Supreme Court Process: An application to vary a charitable trust is a complex legal process that requires meticulous preparation of evidence and a formal application to the Supreme Court. The process also requires that notice be given to the Attorney-General, who acts as the protector of charities and will often have a representative appear at the hearing. Our lawyers guide clients through every step of this process.
- Demonstrating the Spirit of the Trust: A successful application depends on demonstrating to the Court that the proposed new purpose aligns with the ‘spirit of the trust’. The Court will consider how closely the new purpose relates to the original objects and whether the proposed scheme is a ‘practical and effective’ means of allowing for the trust’s continued operation. We have a deep understanding of the factors the Court considers and how to present a compelling case that honours the founder’s underlying intentions.
