X. POWERS OF APPOINTMENT Flashcards
- Tom died in 1990, leaving a will that bequeathed property in trust: “income to my daughter Dana for life, and on her death to distribute the trust principal to such persons, including Dana’s estate, as she appoints by her last will. If Dana does not exercise this power of appointment, on Dana’s death the trustee shall distribute the trust principal to Dana’s descendants.” [Purpose of a power of appointment: permits the life beneficiary to designate the remaindermen.]
- [Feb. 1984] Dana has died, leaving a will that bequeaths her residuary estate “one-half to my husband Harry and one-half to my son Steve.”
Did the residuary clause in Dana’s will operate to exercise the testamentary power of appointment, when her will made no reference to the power of appointment?
50a, If the trust assets subject to the power of appointment included Greenacre and Dana’s will said “I devise Greenacre to my son Steve,”
49, Dana is the donee of a general testamentary power of appointment, because she is not limited in the class of beneficiaries to whom she can appoint; she can appoint the property to anyone, including herself, OR her creditors, OR her estate.
Dana’s descendants are takers in default of appointment, as they will take the property on Dana’s death if the power of appointment is not exercised.
50, no; will must expressly exercise the power; her descendant takes in default of appointment
50a. But the law recognizes exercise by implication.
this would exercise the power (as to Greenacre) by implication, as that is the only way that the provision in Dana’s will could be given effect.
- Mom’s will creates a trust: “Income to my daughter Beulah for life, and on her death principal to such of Beulah’s descendants as she shall appoint by her last will. In default of appointment, to Beulah’s children in equal shares.”
Beulah dies ten years later. Her will devises “all my property, including any property over which I may have a power of appointment, to my daughter Diane.”
Did this language in Beulah’s will (called a “blanket” exercise of the power) exercise the special testamentary power in favor of Diane?
who takes
Beulah has been given a life estate and a ____special____ testamentary power of appointment because she is limited in the class of persons (her descendants) to whom she can appoint. She cannot appoint to herself, or her creditors, or her estate.
no; To exercise a power of appointment, there must be a specific reference to the power. E.g., “with respect to the power of appointment given by my mother’s will, I hereby appoint…”
her children by default of appointment
