Rhode Island Supreme Court Provides Critical Guidance on Cy Pres Doctrine for Charitable Trusts

Bank of America, N.A. v. Attorney General, 2026 WL 478704 (R.I. Feb. 20, 2026)

The Rhode Island Supreme Court recently Court: Rhode Island Supreme Court
Date: February 20, 2026 — Bank of America, N.A. v. Attorney General, 2026 WL 478704

Summary of Relevant Facts

Bank of America served as trustee of three charitable trusts created between 1930 and 1969, all designating Memorial Hospital of Pawtucket as the beneficiary for purposes of providing charitable hospital care. Memorial Hospital ceased operations in 2018 following its acquisition by Care New England Health System. With the designated beneficiary no longer in existence, Bank of America was left unable to carry out the trusts' charitable purposes as written. The Miriam Hospital, incorporated in 1926, is a bona fide hospital located only 2.7 miles from the Memorial Hospital campus that provides the same type of inpatient and emergency care services that Memorial Hospital historically provided.

Procedural Background

Bank of America filed a miscellaneous petition in the Rhode Island courts seeking judicial direction on the disposition of trust funds under the cy pres doctrine. Multiple competing proposals were submitted. Bank of America recommended a joint designation of The Miriam Hospital Foundation and Progreso Latino. Care New England and Kent County Hospital proposed themselves. The Rhode Island Attorney General opposed all proposals. A seven-day bench trial was conducted in July 2023. The trial justice designated Miriam Hospital as the sole alternative beneficiary. The matter was appealed to the Rhode Island Supreme Court.

Main Controversies

The case raised four significant issues:

1. Whether the historical meaning of the settlors' charitable intent at the time the trusts were created — rather than modern circumstances — should control the cy pres analysis.

2. Whether Bank of America, as trustee, performed adequate due diligence in evaluating potential alternative beneficiaries before making its recommendation.

3. Which alternative beneficiary most closely matched the original charitable purpose of the trusts.

4. What role the Attorney General plays in cy pres proceedings involving charitable trusts.

Position of the Parties

Bank of America (Trustee/Petitioner): Recommended a joint designation of The Miriam Hospital Foundation and Progreso Latino as alternative beneficiaries, reflecting a broader interpretation of charitable purpose encompassing both traditional hospital care and community health services.

Care New England and Kent County Hospital: Proposed themselves as the appropriate alternative beneficiaries, arguing their organizations could carry forward the charitable hospital care mission.

Rhode Island Attorney General: Opposed all proposed designations, participating as an interested party with standing to represent the public interest in the administration of charitable trusts.

Miriam Hospital (Ultimately Designated): Presented itself as the closest alternative to Memorial Hospital based on its proximity (2.7 miles), its long operational history (incorporated 1926), and the fact that it provides the same type of inpatient and emergency care services.

Holding

Affirmed. The Rhode Island Supreme Court upheld the trial justice's designation of Miriam Hospital as the sole alternative beneficiary under the cy pres doctrine.

Reasons for the Decision

On the controlling framework, the court held that when applying cy pres, the trial justice must determine what the settlors would have wished at the time the trusts were created, not what modern circumstances might suggest. The trial justice properly focused on the historical meaning of "hospital care" when the trusts were executed — namely, inpatient care and emergency services.

On trustee due diligence, the court affirmed the trial justice's finding that Bank of America failed to perform adequate due diligence before recommending its preferred alternative beneficiaries. Corporate trustees petitioning for cy pres relief bear a responsibility to conduct and document thorough evaluations of potential alternatives.

On the selection of Miriam Hospital, the court affirmed that Miriam Hospital was the appropriate alternative beneficiary because its current operations most closely mirror Memorial Hospital's services at the time the trusts were created. Key factors included: Miriam Hospital is a bona fide hospital providing inpatient and emergency care; it has been in continuous operation since 1926, predating all three trusts; and it is located only 2.7 miles from the Memorial Hospital campus.

On the Attorney General's role, the court confirmed the AG's standing as an interested party in charitable trust proceedings, while making clear that the AG's recommendations are advisory and not binding on the court.

This case summary is provided for educational and informational purposes only. It should not be construed as legal advice. a significant opinion addressing the cy pres doctrine in the context of charitable trusts whose designated beneficiary hospital ceased operations. The decision provides critical guidance for trustees, estate planners, and charitable organizations navigating the complex process of redirecting trust funds when a charitable purpose becomes impossible to fulfill.

Background

Bank of America, as trustee of three charitable trusts created between 1930 and 1969, petitioned for cy pres relief after Memorial Hospital of Pawtucket ceased operations in 2018. All three trusts designated Memorial Hospital as beneficiary for charitable hospital care purposes. Following the closure after acquisition by Care New England Health System, Bank of America filed a miscellaneous petition seeking court direction on the disposition of trust funds.

Multiple competing proposals were submitted. Bank of America recommended a joint designation of The Miriam Hospital Foundation and Progreso Latino. Care New England and Kent County Hospital proposed themselves. The Rhode Island Attorney General opposed all proposals. After a seven-day bench trial in July 2023, the trial justice designated Miriam Hospital as the sole alternative beneficiary.

The Court's Analysis

The Rhode Island Supreme Court unanimously affirmed, articulating several key principles:

Historical Context Controls. The court held that when applying cy pres, the trial justice must determine what the settlor would have wished at the time the trust was created, not what modern circumstances might suggest. The trial justice properly focused on the historical meaning of hospital care when the trusts were executed, namely inpatient care and emergency services.

Trustee Due Diligence Matters. The court noted that the trial justice properly declined to follow Bank of America's recommendation after finding the trustee had failed to perform adequate due diligence in evaluating potential alternative beneficiaries.

Closest Alternative Beneficiary. The court affirmed Miriam Hospital as the appropriate alternative beneficiary because it is a bona fide hospital providing the same type of inpatient and emergency care services that Memorial Hospital historically provided. Miriam Hospital was incorporated in 1926 and is located only 2.7 miles from the Memorial Hospital campus.

Attorney General Standing. The court confirmed the AG's standing as an interested party in charitable trust proceedings, while making clear that the AG's recommendations are advisory and not binding on the court.

Practical Implications

This decision carries several important lessons. First, when drafting charitable trusts, practitioners should include broad enough language to accommodate changes in how charitable purposes are fulfilled. Second, corporate trustees petitioning for cy pres relief must conduct and document thorough due diligence before recommending alternative beneficiaries. Third, courts will prioritize organizations whose current operations most closely mirror the original beneficiary's services at the time the trust was created. Finally, the geographic proximity of a proposed alternative beneficiary remains a relevant factor.