Trusts and Estates

Estate of O’Connor

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Cite as D071284
Filed August 29, 2018, Fourth District, Div. One

By Matthew R. Owens
Withers Bergman LLP
www.withersworldwide.com

Arthur and Hildis created a trust and named their children as remainder beneficiaries. Under the trust their son John held a power of appointment over his interest in the trust that, if not exercised, would pass to the other trust beneficiaries. In order to validly exercise the power of appointment it had to be exercised in “a will specifically referring to and exercising this general testamentary power of appointment.” John died in 2014, leaving a will under which he exercised his power of appointment in favor of his brother, Kevin, and named Kevin as executor. Two other trust beneficiaries, Brian and Astrid, contended John’s exercise of the power of appointment was invalid under Probate Code section 632 because it failed to satisfy the trust’s specific-reference requirement. Kevin petitioned the court to probate John’s will and sought to establish the validity of the power of appointment. The probate court granted the petition and found the reference in John’s will to the power of appointment was sufficiently specific to satisfy the trust’s terms and Section 632. Brian and Astrid appealed.

The appellate court affirmed. John’s will provided: “I exercise any Power of Appointment which I may have over that portion of the trust or trusts established by my parents for my benefit or any other trusts for which I have Power of Appointment I exercise [sic] in favor of my brother [Kevin].” This language satisfied the trust’s specific-reference requirement because it reflected John’s intentional and deliberate, not inadvertent, exercise of the particular power of appointment granted to him under the trust. The language John used in his will recited not only the existence of a power of appointment, but also the trust and the donors of the power, John’s parents. Section 632 requires either a reference to the trust or a reference to the power but it does not require both, and therefore the reference in John’s will to the power was sufficient under the terms of the trust and Section 632. It also satisfied the intent underlying Section 632’s specificity requirement because it ensured John made a conscious exercise of the particular power granted to him, and was not merely a “blanket” clause that would create the danger of an unintentional exercise of another power John might hold.

http://www.courts.ca.gov/opinions/documents/D071284.PDF


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