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Keywords

appealprobatetrustwilldue processcommon law
statuteappealwillleasestatute of limitations

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Sefton v. Sefton, 206 Cal.App.4th 875, 142 Cal.Rptr.3d 174, 12 Cal. Daily Op. Serv. 6047, 2012 Daily Journal D.A.R. 7243

Facts

J.W. Sefton, Jr. executed his will in 1955 and passed away in 1966, leaving a trust for his son, Thomas W. Sefton (Father), with a portion of the remainder estate going to Father's 'then living issue.' The language in the will was interpreted under common law as granting a non-exclusive power of appointment, requiring Father to distribute a substantial share to each of his children. However, after Father's death in 2006, he excluded his son Thomas W. Sefton, Jr. (Thomas Jr.) from any inheritance, leading Thomas Jr. to file a probate petition seeking a determination of his entitlement to a portion of the trust estate.

Grandfather's Will further stated, 'I have three grandchildren, children of my said son, Thomas Wolcott Sefton, namely, THOMAS W. SEFTON, JR., LAURIE MARILYN SEFTON and HARLEY KNOX SEFTON.'

Issue

Whether the law in effect at the time Grandfather executed his will, which required a non-exclusive power of appointment, or the law in effect at the time Father executed his will, which allowed for an exclusive power of appointment, governs the distribution of the trust estate.

The issue raised by this appeal is whether the law in effect at the time Grandfather executed his will, and at the time he passed away, controls, requiring that Father give each of his living issue, including Thomas Jr., at least a 'substantial' share of his estate or is the law in effect at the time Father executed his will and passed away controlling, thus allowing Father to completely exclude one or more of his living issue.

Rule

The court applied the principle that the law in effect at the time of the creation of a power of appointment governs its interpretation, particularly when the power was created before the enactment of the CPAA, which changed the presumption from non-exclusive to exclusive.

Section 601 provides: 'If the law existing at the time of the creation of a power of appointment and the law existing at the time of the release or exercise of the power of appointment or at the time of the assertion of a right given by this part differ, the law existing at the time of the release, exercise, or assertion of a right controls.'

Analysis

The court determined that the language of the will and the intent of the testator, as expressed in the will, must be given effect. It found that the power of appointment created by Grandfather's will was non-exclusive under the law at the time it was executed, meaning that Father could not exclude Thomas Jr. from receiving a substantial share of the estate. The court emphasized that applying the CPAA retroactively would violate due process and undermine the testator's intent.

We conclude that under the paramount rule regarding interpretation of wills that is to give effect to the intent of the testator, the language of section 601 that '[n]othing in this section makes invalid a power of appointment created before July 1, 1970, that was valid under the law in existence at the time it was created,' and concerns over the constitutionality of applying section 652 retroactively, under Grandfather's Will the power of appointment was 'nonexclusive' and Father could not exclude Thomas Jr. from at least a 'substantial' portion of the estate.

Conclusion

The Court of Appeal reversed the lower court's ruling, holding that Thomas Jr. was entitled to a substantial share of the trust estate, and remanded the case with directions for further proceedings consistent with its opinion.

Based upon its ruling, the court found the statute of limitations defense moot.

Who won?

Thomas W. Sefton, Jr. prevailed in the case because the court found that the power of appointment in his grandfather's will was non-exclusive, requiring that he receive a substantial share of the estate.

Thomas Jr. asserts that the second sentence in section 601 means that Grandfather's power of appointment must be interpreted under the law existing prior to enactment of the CPAA, i.e., under the rule enunciated in Estate of Sloan, and therefore Father's appointment that excluded him as a donee was ineffective.

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