Nature of the Case
To access this section all you need to do is click here and register.
Facts
Robert and Betty were the owners of the McDowell Cattle Company. In 2001, they drafted wills and revocable trusts with nearly identical language. Robert's trust provided in relevant part: (d) Upon the death of my wife in the event my wife shall survive me, the then principal of Trust 'A' shall be distributed to or held in trust for the benefit of such one or more of my issue, the spouses of any such issue, and tax-exempt charitable organizations, in such shares and proportions and subject to such powers, terms and conditions, as my wife shall appoint by will and any principal of Trust 'A' not appointed effectively by my wife shall continue to be administered as Trust 'A' pursuant to the following provisions of this instrument. Robert died before Betty. Betty executed a new will. In this will, she provided: I hereby exercise any power of appointment given to me under the . . . Robert L. McDowell Revocable Trust . . . (including Trust 'A' . . .), and direct that all such property over which I have a power of appointment, together with all of my property, whether real or personal, is hereby devised to the Trustee or Trustees of the [Betty Jane McDowell Revocable Trust], to be administered by the Trustee as part of the property of said . . . Trust, and to be held or distributed according to the terms thereof . . . . They had two children who survived them: P and D. P received nothing under the terms of Betty's trust but was a potential beneficiary under Robert's trust. P filed suit requesting instructions and a declaration of rights. D alleged that the power of appointment exercised under Betty's Will is invalid and ineffective as the Betty Jane McDowell Revocable Trust is not a person or beneficiary to which the assets of Trust A could be transferred. P claimed the assets of Trust A should instead be distributed pursuant to the terms of Robert's trust, which provided that any residue was to be distributed in equal shares to P and D. D also sought instructions and a declaration of rights of the beneficiaries under Robert's trust. D denied that the power of appointment exercised by Betty was invalid. D's counterclaim requested that the court enter an order (1) finding that Betty's exercise of the power of appointment was valid and enforceable, (2) approving the actions taken by the trustee of Robert's trust in 'distributing the remaining principal of [Trust A] to the Trustee of Betty's Trust in accordance with Betty's exercise of the power of appointment,' and (3) requiring the trustee of Robert's Trust 'to promptly distribute the remainder of the principal of [Trust A] in accordance with Betty's exercise of the power of appointment . . . to the Trustee of Betty's Trust . . . .' The court determined Betty's exercise of the power of appointment exceeded the scope of the limited power granted. It ordered the trustee of Robert's trust to recover all assets of Trust A and to distribute them in accordance with the terms of Robert's trust. D appealed.
Support@ bsmsphd.com
Casebriefs Co