Appellate Division Invokes Cy Pres Doctrine to Further Decedent’s Charitable Intent

Matter of Estate of Heinecke, No. A-3604-21, 2024 WL 1125186 (N.J. Super. Ct. App. Div. March 15, 2024)

This case centers around the modification of a will under the cy pres doctrine.

Barbara Heinecke (“Decedent”) died testate on April 9, 2021.  The relevant portion of her Last Will and Testament dated January 19, 2012 (“Will”) at paragraph six provided as follows (emphasis added):

I give [twenty-five percent] of my residuary estate (the THIRD SHARE) as follows:

In equal shares to each of the following charitable tax-exempt organizations:

  1. The American Humane Association …;
  2. The New Jersey Society for the Prevention of Cruelty to Animals presently of 1119 Livingston Avenue, New Brunswick, New Jersey 08901;
  3. The Christian Relief Services, …;
  4. The International Relief Fund, …;
  5. The National Wildlife Federation, …;
  6. The World Wildlife Federation, World Wildlife Fund, ….

I give [twenty-five percent] of my residuary estate (the FOURTH SHARE) as follows:

In equal shares to each of the following charitable tax-exempt organizations:

  1. [sic] Family Service of Burlington County, … and
  2. The Elephant Sanctuary in Tennessee ….

Id. at *1.

After the Decedent ’s death, the co-executors of the Decedent ’s estate filed a complaint for advice and direction regarding the disposition of funds bequeathed to the New Jersey Society for the Prevention of Cruelty to Animals (“NJSPCA”) and the International Relief Fund (“IRF”).  The co-executors alleged that both organizations were defunct and recommended that the court distribute their shares equally among the remaining charitable beneficiaries listed in the Will.  Id. at *3-4.

The IRF did not participate in the litigation.  NJSPCA, Inc.  appeared and filed a Certification of its counsel in lieu of an Answer.  Counsel for NJSPCA, Inc. attested that NJSPCA, Inc. was reincorporated in 2019 and all of the assets of the original entity — NJSPCA — were transferred to it, and further that NJSPCA, Inc. had a mission precisely consistent with that of the original entity except for the law enforcement component.  Counsel argued that NJSPCA, Inc. was the successor in interest to NJSPCA and that the court should apply the doctrine of cy pres to redirect the devise to the new entity — NJSPCA, Inc.

The Attorney General — appearing in its role as protector of the public’s interest and charitable gifts — objected,  citing numerous concerns and problems with the operation of NJSPCA, Inc. including, but not limited to, loss of its 501(c)(3) status for failing to file tax returns for three consecutive years, untimely responses to calls reporting animal cruelty, inadequate record keeping about enforcement activities, a lack of funding, excessive spending on legal fees, and deficiencies with filing with the State Division of Consumer Affairs.  Id. at *5-6.

The trial court heard oral argument.  The estate, echoing the arguments made by the Attorney General, highlighted its concerns about NJSPCA, Inc.’s financial circumstances, programs, and expenses.  In light of the issues raised by the estate and the Attorney General during oral argument, NJSPCA, Inc. requested additional time to respond, which the court granted.  Thereafter, NJSPCA, Inc. submitted various documents to support its position that the NJSPCA, Inc. was a legitimate charitable organization.  Specifically, counsel certified that that NJSPCA, Inc. was recognized by the State of New Jersey to be in good standing and current with required filings.  While admitting that the mission of the predecessor organization was primarily the advancement of animal welfare through investigation and enforcement of the animal cruelty laws, counsel attested that the work also included educating the public on issues related to animal welfare and cruelty.  Id. at * 6-8.

In response, the Attorney General filed two letter briefs opposing NJSPCA, Inc.’s application, stating that the documents provided had raised even more concerns.  Id. at *9.  The trial court then heard oral argument again and issued an Order granting the relief requested by the estate, with an accompanying written statement of reasons.  Id.

The trial court, applying the cy pres doctrine, ordered that the devises designated for the IRF and the NJSPCA were to be distributed in equal shares among the other charitable beneficiaries named in paragraph six (c) of the Will and granted the estate’s request for counsel fees and costs.  Id. at *11.  The trial court found that a charitable intent was evident in the Will, pointing to: section (c) of paragraph six, that designated twenty-five percent of the residue to specific charities, with many having environmental conservation focuses; and section (d) which designated an additional twenty-five percent to other named charities.  Because IRF appeared defunct and had not responded, the trial court found that the Decedent ’s gift to IRF had lapsed.  As to NJSPCA, Inc., counsel conceded that the original NJSPCA no longer existed and the question was whether the trial court should modify this specific bequest to be consistent with the Decedent ’s charitable goals and, if so, whether NJSPCA, Inc. had demonstrated entitlement to these funds.  Accordingly, the trial court redirected the devises intended for IRF and the NJSPCA to the remaining charities designated by the Decedent.  Id. at *12.

The appeal followed.

The Appellate Division affirmed in part and remanded in part.

The Appellate Division began its analysis with a review of the cy pres doctrine, as a judicial mechanism for the preservation of a charitable disposition when accomplishment of the gift becomes impossible, impractical or illegal.

Where the donor manifests a ‘general charitable intent,’ rather than allow an impossible gift to fail, the court may redirect the funds ‘to a charitable purpose as nearly as possible to the [original] particular purpose.’ A ‘general charitable intent … does not require an intention to benefit charity generally’ but ‘only a charitable purpose which is broader than the particular purpose the effectuation of which is impossible, impracticable or illegal.’ Stated differently, the question is whether the donor would ‘have wanted the trust funds devoted to a like charitable purpose, or would he [or she] have wanted them withdrawn from charitable channels.’ The absence of any provision directing the devise revert to the estate or other heirs in the event of its failure may signify a general charitable intent. [internal citations omitted].

Id. at *15.

Affirming the trial court, the Appellate Division was satisfied with the determination that the devise to the NJSPCA became impossible and was supported by substantial evidence in the record.  Id. at *17.  The organization had been dissolved by statute and no longer existed.  While the NJSPCA, Inc. may have shared the same name with the original organization, at its core it was a fundamentally different organization that did not investigate animal welfare or enforce animal cruelty law.  The redistribution of the devise to NJSPCA, Inc. would be inconsistent with the Decedent ’s expressed intent for all of the reasons expressed by the trial court.

However, the Appellate Division found that the decision to redistribute the devise to the American Humane Association, the Christian Relief Services, the National Wildlife Federation, and the World Wildlife Federation/World Wildlife Fund was not appropriate.  Instead, the Appellate Division opined that the investigation and enforcement of animal cruelty law was important to the Decedent and consistent with her intent as reflected in her devise to the NJSPCA; therefore, the redirection of the funds allocated to the NJSPCA to entities without a similar purpose did not effectuate her intent.  Similarly, the appeals court found that although IRF did not participate in the trial proceedings, the Decedent’s gift to IRF was intended to empower women and children, and promote ethics throughout Africa and Iraq.  Redistribution to the designated animal wildlife and Christian relief charities did not appear to effectuate that purpose. Id. at * 17-20.

Thus, on remand the Appellate Division directed the trial court to conduct further proceedings and make factual findings sufficient to effectuate the distribution of the devises to organizations with mission as similar as possible to the Decedent ’s particular purpose.  The Appellate Division instructed the trial court to “exhaustively explore charities and organizations to determine options that most closely resemble the NJSPCA’s and the IRF’s original purposes. and redirect the devises accordingly.” Id. at 20.