Troublesome Trust Topics State Bar Of Texas Governance of Nonprofit - PowerPoint PPT Presentation

Troublesome Trust Topics State Bar Of Texas Governance of Nonprofit Organizations Course August 13-14, 2015 | Austin, Texas Presented by: Darren B. Moore and David M. Rosenberg

a charitable trust? What is

Is a Nonprofit Corporation Effectively a Charitable Trust ?

Is a Nonprofit Corporation Effectively a Charitable Trust ?

Equitable Equitable Deviation Deviation How is a charitable trust modified?

Trustees, Beneficiaries, and the OAG Getting the modification party started… Getting the modification party started…

Determining Jurisdiction: Property Code vs. Probate Code

terminate a charitable trust or distribute its assets to other than charitable donees | depart from the objects of the charitable trust stated in the instrument creating the trust, including a proceeding in which the doctrine of cy pres is invoked | construe, nullify, or impair the provisions of the testamentary or other instrument creating or affecting a charitable trust | contest or set aside the probate of an alleged will under which money, property, or another thing of value is given for charitable purposes | allow a charitable trust to contest or set aside the probate of an alleged will | determine matters relating to the probate and administration of an estate involving a charitable trust | obtain a declaratory judgment involving a charitable trust

Judicial Modification Standards 163.007 112.054 • Impracticable • Fulfilled • Unlawful (use of fund • Illegal only) • Impossible to fulfill • Impossible to achieve • Circumstances not known/anticipated by settlor (use of fund only) • Necessary/appropriate to prevent waste/avoid • Circumstances not impairment of trust’s administration (only as to anticipated by donor; will administrative/non-dispositive terms) further purposes of fund • Necessary/appropriate to achieve settlor’s tax (management/investment objectives; not contrary to settlor’s intentions only) • Not inconsistent with material purposes of trust • Wasteful (consent/deemed consent of beneficiaries) • Impairs management or • Terminate trust where continuance of trust not investment of fund necessary to achieve any material purpose of (management/investment trust (consent/deemed consent of beneficiaries) only)

When is modification (really) (really) justified?

When, Why, and How to Convert Nonprofit Charitable Corporation Trust

The information set forth in this presentation should not be considered legal advice, because every fact pattern is unique. The information set forth herein is solely for purposes of discussion and to guide practitioners in their thinking regarding the issues addressed herein. Non-lawyers are advised to consult an attorney before undertaking any issues addressed herein.