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Keywords

trustwill
trustwill

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Union & New Haven Trust Co. v. Taylor, 133 Conn. 221, 50 A.2d 168

Facts

Paul H. Taylor's will attempted to exercise powers of appointment granted to him by his parents' wills, which created trusts for his benefit. His father's will specified that upon Paul's death, the principal of the trust should be distributed to his heirs-at-law, excluding his wife, while his mother's will allowed for distribution to his issue and widow. Paul’s will, however, directed that the principal should not be distributed until the death of his children, which raised questions about the validity of his exercise of these powers.

In his will, Paul, stating that he was exercising the power of appointment given him in his father's will, directed that the fund established by his father should be divided into as many equal shares as he left children who survived him or who had died leaving issue, and that the net income of one share should be paid to each child during his life; that at the death of such child the fund held for him or her should be distributed and paid over ‘outright and free from the trust to such beneficiaries as such child by will may appoint and designate’; and that in the absence of such appointment the fund should be distributed to the heirs-at-law of such child.

Issue

Did Paul H. Taylor validly exercise the powers of appointment given to him in the wills of his father and mother?

The question presented by these provisions of Paul's will is this: Where the father directed that ‘the principal’ of the funds should at the death of Paul be paid over and delivered to his heirs-at-law (exclusive of his widow) in such amounts and manner as he might appoint, and where the mother provided that the principal of the trust created by her will should at Paul's death be paid over and delivered to his issue and widow, or such of them as might survive him and as he might select, in such manner and amounts as he should appoint by will, could Paul validly provide in his will that the persons in the classes designated by his father and mother within which he was authorized to make an appointment should receive none of the principal of the funds but should have only the income for life, and that the principal should be distributed only at their deaths, and then to such beneficiaries as the child might designate or, in want of appointment, to the child's heirs-at-law or issue?

Rule

A power of appointment cannot exceed the limits set by the donor, and the intent of the donor must be respected in the exercise of such powers.

A power of appointment cannot transcend the limits upon it set by the donor; O'Brien v. Flint, 74 Conn. 502, 507, 51 A. 547; Allen V. Davies, 85 Conn. 172, 176, 82 A. 189; and it is our conclusion that Paul did not validly exercise the powers of appointment given him in the wills of his father and mother.

Analysis

The court analyzed the language of the wills of Paul's parents and concluded that both intended for the principal of the trusts to be distributed to specific beneficiaries upon Paul's death. Paul's provisions, which deferred the distribution of the principal until the deaths of his children, contradicted this intent and effectively prevented the designated beneficiaries from receiving the principal, thus invalidating his exercise of the powers of appointment.

In the first place, we cannot escape the conclusion that both father and mother intended that at the son's death there should be a distribution of the principal among the persons designated in their wills; but the result of the purported exercise of the power by Paul would be that the principal would never be paid to any of the persons so designated and that they would at most receive income during their lives. Such a result would run directly counter to the intent of the parents.

Conclusion

The court concluded that Paul H. Taylor did not validly exercise the powers of appointment in his will, but upheld the validity of the disposition of the fund created by his father's deed of trust.

To so much of question 1 and 3 propounded in the reservation as asks whether the provisions of the will of Paul H. Taylor purporting to exercise the powers of appointment given him in the wills of Franklin H. Taylor and Sarah L. Taylor are valid, we answer ‘No.’ To so much of question 5 as asks whether the provisions of the will of Paul H. Taylor disposing of the fund created by the deed of trust of Franklin H. Taylor are valid and effective, we answer ‘Yes.’

Who won?

Union & New Haven Trust Company prevailed in part, as the court ruled that Paul's exercise of the powers of appointment was invalid, aligning with the intent of the original trust creators.

Union & New Haven Trust Company prevailed in part, as the court ruled that Paul's exercise of the powers of appointment was invalid, aligning with the intent of the original trust creators.

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