Michigan state law has successfully applied the cy pres doctrine to charitable trusts and living wills over the decades. This doctrine, whose name is taken from a French term that means "so near" or "as close as possible," provides a method for the court to salvage a charitable trust whose mission has been fulfilled or has become impossible to fill.
Sometimes a charitable trust loses the subject of its bequest and must either find a new target or be dissolved. In such a case the court may find a new subject that is as close as possible to the original intention of the trust.
Michigan law requires that the trust instrument express a general interest in the furtherance of charity in order to apply the cy pres doctrine. The specific desire to benefit a specific institution may not be enough to continue the trust. For example, the desire to bequeath money to sick children at a specific hospital may be considered eligible for cy pres reassignment, as the intention was to give the money to the children and the choice of hospital is not the crux of the issue. However, if the trust was designed to give money to a specific hospital and that hospital ends operations, then it would not be necessarily to reassign the charitable funds. The hospital was the specific target of the gift, and there is no reason to continue to give funds after the hospital ceases to exist.
The trustees of a trust will often have to deal with circumstances the benefactor never foresaw or intended. Although the cy pres doctrine grants latitude to properly interpret the wishes of the departed, it might require substantial legal effort to reorganize a charitable trust. The guidance of an estate planning attorney may be of help to those who wish to maintain, update or terminate a trust.
Source: IRS, "E. THE CY PRES DOCTRINE: STATE LAW AND DISSOLUTION OF CHARITIES ", November 04, 2014