Brief Fact Summary. Laura Long created a trust for her son, the appellate, Phillip W. Long that gave him the right to withdraw from the principal once in any year of up to four percent (4%) upon request to the trustee. The appellant, Victoria Long, sought to attach his interest in the trust to satisfy his obligation under a divorce decree.
Synopsis of Rule of Law. A creditor may acquire a power, compel its exercise, nor reach property covered by a power if the donee of the general power of appointment fails to exercise that power.
Issue. Whether a creditor can reach the assets subject to a general power of appointment, if that power has not yet been exercised?
Held. No. The bank may not reach the appellee’s interest in the trust because his interest is a power that he has not yet exercised. No title vests in the appellee until he exercises that power. Until then, the power is just an offer that a court of law cannot compel him to accept.
No particular form of words is necessary to create a power of appointment.View Full Point of Law