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For-Profit Hospital Cannot Receive Funds From Charitable Trust

For-Profit Hospital Cannot Receive Funds From Charitable Trust

For-Profit Hospital Cannot Receive Funds From Charitable Trust

Sale of nonprofit hospital disqualifies gift and court must exercise cy pres doctrine
When Kathryn Seymour executed her Amended Trust Agreement, she provided that upon her death the residue of her estate would go 50% to St. John’s United Church of Christ in Massillon, OH, 40% to the Massillon community hospital, and 10% to the local branch of the Salvation Army. Before her death, however, the hospital was sold to a for-profit and became known as the Affinity Medical Center. The bank trustee asked the trial court for a declaratory judgment on the question of the rightful recipient of the 40% interest. The trial court concluded that the trust had a general charitable intent and that the funds could not be awarded to the for-profit. It divided the interest between the Health...

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