Cy près in Rhode Island: Donor-Intent Fixed at Creation and “Bona Fide Hospital Care” as the Nearest Feasible Substitute

Supreme Court of Rhode Island (Feb. 20, 2026) — Bank of America, N.A., as Trustee of the Harold W. Wood and Gertrude B. Wood Trust, the Marion Law Trust, the John F. Preston Charitable Trust, the E. Russell Richardson Trust, and the William F. Sayles Endowment Fund v. Peter F. Neronha, Attorney General of the State of Rhode Island, et al.

I. Introduction

This consolidated appeal arose from Bank of America, N.A.’s verified petition to apply Rhode Island’s cy près statute, G.L. 1956 § 18-4-1, after the closure of The Memorial Hospital d/b/a The Memorial Hospital of Rhode Island (“Memorial Hospital”), the named charitable beneficiary of several older trusts. Respondents included the Rhode Island Attorney General (a mandatory participant under § 18-9-5) and health-system entities associated with Memorial Hospital’s former campus and operations (Care New England Health System (CNE), Memorial Hospital, and Kent County Hospital).

The core dispute was not whether cy près applied (the parties largely agreed the trusts’ literal purposes could not be carried out after Memorial Hospital ceased operating as a licensed hospital), but how to choose the “as near as may be” substitute. The trustee proposed splitting the former Memorial Hospital allocations between The Miriam Hospital Foundation and Progreso Latino, Inc. CNE-related respondents urged selection of Kent County Hospital (which continued outpatient services at the former Memorial campus). The trial justice rejected those proposals and selected The Miriam Hospital (“Miriam Hospital”) itself as substitute beneficiary, emphasizing “bona fide hospital care” as understood at the times the trusts were created.

On appeal, respondents argued the trial justice improperly anchored the analysis to historical understandings of “hospital care,” rather than adapting cy près to modern healthcare delivery. They also challenged the Wood Trust’s geographic limitation (Blackstone Valley) as inconsistent with selecting a Providence hospital.

II. Summary of the Opinion

The Supreme Court of Rhode Island affirmed. It held that, when crafting a cy près scheme, the court’s task is to approximate what the settlor would have intended at the time of trust creation had the settlor foreseen that the named charitable purpose/beneficiary would fail—not to re-engineer the gift to reflect decades-later evolutions in service delivery. On that record, the Court found no error in selecting Miriam Hospital as the closest substitute because it provides inpatient and emergency care akin to what Memorial Hospital provided when the trusts were established.

The Court also upheld the trial justice’s treatment of the Wood Trust’s Blackstone Valley preference, concluding that Miriam Hospital’s proximity and actual service to Blackstone Valley residents satisfied the dominant charitable aim, and that a rigid boundary would improperly risk frustrating the gift.

Clarification provided: The Court expressly stated that trust proceeds are to be used “within the parameters” described—“namely, the provision of inpatient care and emergency care.”

III. Analysis

A. Precedents Cited and Their Role

1. Rhode Island cy près foundations and charitable-trust policy

  • Pell v. Mercer, 14 R.I. 412 (1884): The Court leaned on Pell for bedrock principles—public policy disfavors the failure of charitable trusts; indefinite charitable purposes are upheld; and when a trust becomes ineffective due to changed circumstances, equity may “devise a scheme” and “reappl[y]” the gift to a new purpose “as nearly like to the old as possible.” The 2026 opinion uses Pell to contextualize cy près as a long-standing equitable power now codified in § 18-4-1.
  • Industrial National Bank of Rhode Island v. Glocester Manton Free Public Library of Glocester, 107 R.I. 161, 265 A.2d 724 (1970) and Nugent ex rel. Saint Dunstan's Day School v. Saint Dunstan's College of Sacred Music, 113 R.I. 666, 324 A.2d 654 (1974): These cases supply the doctrinal threshold: cy près is available when the donor’s dominant intent is “general” charitable intent rather than a narrowly “specific” intent tied to one precise mechanism or institution. The Court cited them to confirm the uncontroversial predicate here: once Memorial Hospital ceased operating as a hospital, cy près could be invoked because the settlors’ intent was charitable in a general sense (supporting hospital care/charity), not merely the corporate existence of Memorial Hospital itself.
  • Rhode Island Hospital Trust National Bank v. Israel, 119 R.I. 298, 377 A.2d 341 (1977): The Court used Israel for the operative mandate: substitute “another charitable organization which satisfies the original dispositive purpose as closely as possible.” It also drew from Israel on how courts handle competing candidates: ascertain the dominating purpose and select the institution that better fulfills it.

2. Determining intent: text first, then extrinsic evidence; the “time-of-creation” lens

  • Industrial National Bank of Rhode Island v. Guiteras, 107 R.I. 379, 267 A.2d 706 (1970): This opinion is the Court’s principal Rhode Island authority for the “counterfactual” inquiry in cy près: courts are often forced to “make a guess” not about what the donor actually intended regarding failure, but what the donor would have intended “if he had thought about the matter.” The 2026 Court emphasized the temporal anchor embedded in that formulation—what the donor would have intended at the time of making the gift, had failure been foreseen.
  • City of Providence v. Powers, 83 R.I. 512, 120 A.2d 811 (1956): The Court cited Powers to reinforce that charitable intent is gathered from the donor’s instrument “and not from later developments and changed circumstances.” This citation directly undercut respondents’ primary argument that modern healthcare delivery should drive the substitute selection.
  • Restatement (Second) Trusts § 399(d) (1959) (October 2024 Update): The Court quoted the Restatement’s framework, which allows consideration of circumstances indicating the settlor’s probable wishes at the time the trust was created if the particular purpose could not be carried out. The Restatement’s list (prior gifts, expressed charitable interests, affiliations, views) supports a historically grounded inquiry that may include extrinsic evidence—while still focusing on the settlor’s era and perspective.

3. “Hospital” and institutional functions (context for excluding non-hospital substitutes)

  • Michaud v. Michaud, 98 R.I. 95, 200 A.2d 7 (1964); Sullivan v. Dolan, 69 R.I. 492, 36 A.2d 98 (1944); Miriam Hospital v. Zoning Board of Review of City of Providence, 67 R.I. 295, 23 A.2d 191 (1941): The Court referenced these cases as part of the trial justice’s reasoning that “hospital care” historically did not subsume certain categories of treatment and that institutional lines mattered (including the historical separation of mental/behavioral treatment from general hospitals). In this case, those citations supported rejecting proposals that would deploy funds predominantly for mental and behavioral health services outside a licensed hospital structure.

4. Extra-jurisdictional cases urged by respondents—and why they did not move the Court

  • Town of Brookline v. Barnes, 97 N.E.2d 651 (Mass. 1951): Respondents invoked this case to argue cy près should flex with modern methods. The Rhode Island Court read it differently: the Massachusetts court pursued the testator’s dominant purpose (“aiding the sick of the town especially such of them as are poor”) and selected the more feasible plan, not simply the more modern one. That parallels Rhode Island’s “dominant purpose” approach and did not require embracing respondents’ modern-healthcare reframing here.
  • Matter of Estate of Vallery, 883 P.2d 24 (Colo. App. 1993): The Court distinguished it as a case where adherence to a literal restriction (“hospitalization costs”) would frustrate the broader charitable aim due to medical practice expansion. By contrast, selecting Miriam Hospital did not impose an impracticable limitation; it preserved the historic core (inpatient and emergency care) that the record associated with “hospital care” at the relevant times.
  • In re Estate of Elkins, 32 A.3d 768 (Pa. Super. Ct. 2011): The Court found it consistent rather than contrary: the Pennsylvania court chose an alternative that served the same community and performed functions “historically performed by hospitals.” Here, the Court likewise approved a substitute (Miriam Hospital) that actually provides the historically central hospital functions and serves former Memorial Hospital patients for emergency care.

5. Standard of review framing

  • Manchester v. Pereira, 926 A.2d 1005 (R.I. 2007): The Court reiterated deferential review of nonjury factual findings (clearly erroneous / misconceived or overlooked material evidence), and de novo review for legal questions. This mattered because respondents attempted to characterize the trial justice’s intent-finding and beneficiary selection as legal error, while the Court treated much of it as fact-bound, supported by credited testimony (notably, historical evidence of what hospitals did when the trusts were created).

B. The Court’s Legal Reasoning

1. The controlling cy près question: “as near as may be” to the settlor’s purpose

Section 18-4-1 directs the court to carry out the donor’s intent “as near as may be” when the original purpose “cannot be literally carried into effect.” The Court treated that statutory phrase as a discipline: it constrains judicial creativity and requires fidelity to the donor’s objective as it would have been understood when the gift was made.

2. “Time-of-creation” intent vs. “changed circumstances” in modern healthcare

The Court squarely rejected the premise that cy près selection should be driven by the contemporary evolution of healthcare delivery systems. It held that the trial justice correctly focused on what the settlors would have wanted at the time of creation if failure had been foreseeable. That lens permits awareness that Memorial Hospital closed, but it does not authorize redefining “hospital care” to track later institutional expansions (e.g., the rise of hospital-affiliated outpatient systems).

3. Why “bona fide hospital care” mattered in this record

The decision turned on evidence that, when these trusts were created (1930, 1941/1961 amendment, 1969/1971 amendment), hospitals were principally institutions for inpatient care and emergency services, and that “free beds” were mechanisms for gratuitous inpatient hospital treatment. Crediting expert testimony, the trial justice concluded that the closest substitute to Memorial Hospital’s historic charitable function was another licensed hospital providing inpatient and emergency care—i.e., Miriam Hospital.

4. Non-hospital recipients and behavioral-health-centered use as “not near enough”

The Court approved the trial justice’s reasoning that neither The Miriam Hospital Foundation nor Progreso Latino are hospitals, and that a proposal predominantly funding mental/behavioral health services did not match the settlors’ contemplated “hospital care” in the relevant era. Even if such services are vital today, cy près asks a narrower question: what best approximates the donor’s charitable purpose.

5. Geographic limitation in the Wood Trust: “predominant intent” over rigid boundary

The Wood Trust contemplated selecting “another charitable institution of a character similar to the original beneficiary located in the Blackstone Valley.” The Court upheld the conclusion that Miriam Hospital, though “just over the boundary,” was sufficiently proximate (approximately 2.7 miles from the Memorial campus) and, critically, actually served Blackstone Valley residents for emergency and inpatient care after Memorial’s closure. The Court accepted that strict adherence to a non-governmental regional boundary should not defeat the dominant purpose (gratuitous hospital care for that community) when a near substitute is available.

6. Use restriction clarified

Respondents sought clarification whether the funds could be used for “gratuitous hospital care” broadly (including modern outpatient modalities) or only for inpatient and emergency services. The Court answered: Miriam Hospital may use the proceeds as it sees fit “within the parameters” described—“namely, the provision of inpatient care and emergency care.”

C. Impact

1. A tightened, historically anchored cy près methodology in Rhode Island

The opinion strengthens a particular approach to cy près in Rhode Island: courts should approximate the donor’s hypothetical intent as of the gift’s creation, not update the gift to align with present-day service delivery. In practice, this can make substitute selection more institution-specific where the donor’s terminology (“hospital,” “free bed”) carried narrower historical meaning.

2. Consequences for healthcare-adjacent charitable trusts

  • Trusts naming hospitals—especially older gifts referencing “beds,” “wards,” or similar capacity measures—may be redirected preferentially to licensed hospitals providing inpatient and emergency services, even where outpatient systems now deliver much community care.
  • Proposals framed around social determinants of health, navigation, and behavioral health may face headwinds when the donor’s original “hospital” purpose is construed narrowly.

3. Geographic restrictions will be interpreted in service of dominant purpose

The Wood Trust analysis signals that geographic language will be treated as important but not necessarily absolute, especially where a near-by institution is demonstrably serving the intended population and a rigid interpretation could risk failure or misalignment with the dominant charitable aim.

4. Trustee recommendations: no required deference; process matters

Although not framed as a broad rule, the affirmed decision underscores that trial courts need not defer to trustees’ preferred substitutes and may scrutinize the trustee’s diligence (review of proposals, verification of scoring, inquiry into donor-specific evidence). This may incentivize more robust trustee records in cy près petitions.

IV. Complex Concepts Simplified

  • Cy près: A doctrine (and statutory power under § 18-4-1) allowing a court to redirect a charitable gift when the original purpose cannot be carried out, choosing a substitute that matches the donor’s purpose “as near as may be.”
  • General vs. specific charitable intent: If a donor’s intent is “general” (to support a type of charity, e.g., hospital care), the court can redirect when a particular named beneficiary fails. If intent is strictly “specific” (only that exact beneficiary or project), the gift may fail.
  • “Free bed”: Historically, a commitment that inpatient hospital care would be provided without charge to qualifying patients—more a charitable funding mechanism than a physical bed dedicated to one person.
  • “Scheme cy près”: The court-crafted plan that identifies the substitute beneficiary and sets the parameters for use consistent with donor intent.
  • Standard of review (clearly erroneous vs. de novo): Appellate courts usually defer to a trial judge’s fact findings in a bench trial unless clearly wrong, but review legal interpretations independently.

V. Conclusion

The Rhode Island Supreme Court affirmed a cy près scheme redirecting three charitable trusts from a closed hospital (Memorial Hospital) to a functioning hospital (Miriam Hospital). The decision’s central contribution is methodological: cy près approximation must be anchored to what the settlors would have intended at the time of creation, not to modern evolutions in healthcare delivery. Applying that lens, the Court endorsed “bona fide hospital care” as the closest analogue to the donors’ purpose and clarified that trust proceeds must be used for inpatient and emergency care. The opinion thus provides a significant guidepost for future Rhode Island cy près disputes involving legacy healthcare philanthropy, institutional substitutions, and the treatment of geographic limitations.