Brief Fact Summary. Isabella Dexter created a will that disposed all of her property to the issue of her sister who predeceased her. Dexter also held a power of appointment over her father’s trust. However, Dexter did not specifically exercise a power of appointment to her father’s trust before her death.
Synopsis of Rule of Law. A general power is closer to a property interest while a special power is one where a person decided who will share in the trust property. A person having a general power of appointment is not expected to distinguish his own property from the property subject to the appointment.
Since the decision in Amory v. Meredith, 7 Allen, 397, it has been a settled canon of construction that a general residuary clause will operate as an execution of a general testamentary power unless a contrary intent is shown by the will.View Full Point of Law
Issue. Whether a testator exercises a power of appointment over a trust in her will if she does not express nor implies intent to exercise that power?
Held. Yes. The testator exercised her power of appointment even though she did not express a specific intent to exercise the power because the power was general. The holder of a general power of appointment is not expected to distinguish between the property subject to the power and her own property. The testator’s power was general because she treated the trust property as her own during her lifetime. She had the use and enjoyment of the appointive property that was initially placed in her trust share. Also, she relinquished the right to add the trust property to her estate and gave away part of her power.
Discussion. Where a beneficiary of a trust is deemed to have been given a general power of appointment, they are not required to distinguish between the trust property and their own property in to order to exercise the power.