N.Y. Estates, Powers & Trusts Law § 8-1.1: Disposition of property for charitable purposes

§ 8-1.1 Disposition of property for charitable purposes

(a) No disposition of property for religious, charitable, educational

or benevolent purposes, otherwise valid under the laws of this state, is

invalid by reason of the indefiniteness or uncertainty of the persons

designated as beneficiaries. If a trustee is named in the disposing

instrument, legal title to the property transferred for such a purpose

vests in such trustee; if no person is named as trustee, title vests in

the court having jurisdiction over the trust.

(b) No disposition of property made in a will, executed and attested

as prescribed by law, is invalid by reason of the incorporation by

reference in the will of any existing written resolution, declaration or

deed of trust, identified in such will and made or adopted by any

corporation authorized by law to execute or accept trusts, to assist,

encourage and promote the well-being and well-doing of mankind in

general or the inhabitants of any community in particular; provided that

a copy of such resolution, declaration or deed of trust, certified,

under its corporate seal, by the secretary or assistant secretary or the

cashier or assistant cashier of such corporation, is filed for record in

the office of the secretary of state and in the office of the clerk or

register of the county of the corporation's principal place of business,

in which the conveyances of real property are required by law to be

filed for record, the secretary of state and the officer in charge of

such record office being hereby authorized and directed to receive and

record such resolution, declaration or deed of trust upon payment of the

fees provided by law. Any such testamentary disposition to a corporation

for the religious, charitable, educational or benevolent purposes set

forth in such resolution, declaration or deed of trust is effective

although the terms, conditions and purposes of such disposition are

established only through such reference in the will.

(c) (1) The supreme court and, where the disposition is made by will,

the surrogate's court in which such will is probated have jurisdiction

over dispositions referred to and authorized by paragraphs (a) and (b),

and whenever it appears to such court that circumstances have so changed

since the execution of an instrument making a disposition for religious,

charitable, educational or benevolent purposes as to render

impracticable or impossible a literal compliance with the terms of such

disposition, the court may, on application of the trustee or of the

person having custody of the property subject to the disposition and on

such notice as the court may direct, make an order or decree directing

that such disposition be administered and applied in such manner as in

the judgment of the court will most effectively accomplish its general

purposes, free from any specific restriction, limitation or direction

contained therein; provided, however, that any such order or decree is

effective only with the consent of the creator of the disposition if he

is living.

(2) (i) The attorney general or any trustee or beneficiary of a

testamentary or lifetime trust wholly benefitting one or more charitable

beneficiaries may petition a court of competent jurisdiction, on notice

to the attorney general and all parties interested in the trust, seeking

a termination of such trust when the trust is comprised of assets, the

market value of which is one hundred thousand dollars or less and the

expense of administering the trust is uneconomic when considered

relative to income. When the court finds upon such application that

continuation of the trust is economically impracticable or is not in the

best interests of the beneficiaries, the court shall make an order or

decree terminating the trust and directing the distribution of the trust

assets to accomplish its charitable purposes, provided, however, that if

the trust is one for the benefit of a particular charitable beneficiary

or beneficiaries named therein, the court shall direct the distribution

of the trust assets to such named charitable beneficiary or

beneficiaries, and provided further that no such proceeding may be

instituted without the consent of the creator of the disposition if he

is living.

(ii) For purposes of this paragraph, the term "charitable beneficiary"

shall mean the beneficiary of a disposition for a religious, charitable,

educational or benevolent purpose.

(d) The power of the supreme court or the surrogate's court, as

provided in paragraph (c), to prevent the failure of, and to give effect

to dispositions for religious, charitable, educational or benevolent

purposes is not defeated by the circumstance that the beneficiary of any

such disposition does not exist or, if in existence, lacks capacity to

take such disposition at the time it would otherwise become effective,

whether or not the disposition creates an express trust to effectuate

its purposes.

(e) Any accumulation of income from property subject to a disposition

in trust for a religious, charitable, educational or benevolent purpose,

or otherwise acquired by such trust, shall in all respects, including

its reasonableness, amount and duration, be within the jurisdiction of

the supreme court or the surrogate's court, as the case may be. In

exercising such jurisdiction, (1) any accumulation of income which might

otherwise be applied for the purposes of the trust may be prohibited or

limited, despite a valid direction therefor in the trust instrument or

authority therefor under 8-1.7 and (2) such an accumulation may be

authorized by order of the court despite the absence of a direction

therefor in the trust instrument. This paragraph shall not restrict in

any manner the ability to release or modify restrictions relating to

institutional funds under section 555 of the not-for-profit corporation

law.

(f) The attorney general shall represent the beneficiaries of such

dispositions for religious, charitable, educational or benevolent

purposes and it shall be his duty to enforce the rights of such

beneficiaries by appropriate proceedings in the courts.

(g) The supreme court or the surrogate's court, as the case may be,

may authorize the trustee or any person holding title thereto to sell,

mortgage or lease any real property which is the subject of a

disposition for a religious, charitable, educational or benevolent

purpose, whenever it appears to the satisfaction of the court that such

real property, or any part thereof, has become or is likely to become

unproductive, has depreciated or is likely to depreciate in value, that

it is advisable to raise money to improve or erect buildings upon

property so held or that it is expedient for any other reason that such

real property be sold, mortgaged or leased. This paragraph shall not

restrict in any manner the powers or rights any trustee may have by law

or by the terms of any disposition of such real property. The

provisions of this paragraph shall not apply to any corporation which is

subject to sections 509 through 511 of the not-for-profit corporation

law.

(h) The supreme court or the surrogate's court shall not make an order

or decree under paragraph (g) unless it appears that eight days written

notice, stating the time and place of the application for such order or

decree, has been served upon the attorney general, who shall represent

the state, the beneficiaries of any trust and the persons who might

benefit from the religious, charitable, educational or benevolent

purpose for which the real property, which is the subject of the

application, is held. A like eight days notice of such application shall

be given to any adult within the state who has a vested or contingent

future estate in such real property and to any minor, incompetent,

conservatee or absentee who is interested in such property, in such

manner as the court may direct. Before making a final order or decree,

the court shall appoint a guardian ad litem for any minor who is not

represented by a guardian or parent, for any incompetent who is not

represented by a committee, and for any absentee.

(i) A sale, mortgage or lease made, as required by law, in accordance

with an order or decree of a court under this section is effective

against the state as representative of the beneficiaries of such trust

and persons who might benefit from the purposes for which such real

property is held, and against persons with a vested or contingent future

interest in such property and minors, incompetents, conservatees,

absentees and persons not in being who have an interest in such

property, as well as all other persons who, having been made parties to

such proceeding, consent to such order or decree. The purchaser,

mortgagee or lessee, or any person claiming under them, shall not be

responsible for the disposition of the proceeds of any such sale,

mortgage or lease.

(j) Whenever a voluntary association or committee has received, by

public subscription, a fund for a charitable or benevolent purpose from

more than one thousand contributors, a portion of which remains

unexpended after the expiration of five years from the time of its

receipt, and it appears that a literal compliance with the terms of the

subscription is impracticable, the supreme court may make an order

directing that such unexpended balance be transferred for administration

and application to such domestic corporation as in the judgment of the

court will most effectively accomplish the general purpose for which

such fund was collected, free from any restriction, limitation or

direction upon which the subscription was made; and on the transfer of

such fund to the corporation designated in the order, such voluntary

association, its officers and trustees, or such committee and its

officers shall be fully exonerated and discharged from all liability to

account for such fund. This paragraph shall not restrict in any manner

the ability to release or modify restrictions relating to institutional

funds under section 555 of the not-for-profit corporation law.

(k) An order shall be made under paragraph (j) on the application of

the association or the treasurer of the committee, having custody of the

unexpended balance, on twenty days personal notice to the attorney

general and notice by publication once a week for four consecutive weeks

in a newspaper of general circulation published in the county in which

the treasurer of such association or committee resides. If such

treasurer resides outside of the state, such notice shall be published

in the county in which at least ten per cent of the contributors of such

fund resided at the time of its receipt or in such other manner as the

court may direct to the contributors as a class, to ten specified

members of such class and to the trustees of such association or the

surviving members of such committee.

(l) Where public subscriptions for charitable or benevolent purposes

were made or begun prior to the year nineteen hundred twenty and the

total number of subscribers exceeded five hundred but were less than one

thousand, any unexpended balance of a fund obtained for such purpose

which, at the time this section takes effect, is in the custody of a

surviving member of a committee may be transferred for administration,

on the application of such surviving member, in accordance with the

procedure and with the effect set forth in paragraphs (j) and (k).