Beals v. State Street Bank & Trust Co.
326 N.E.2d 896, 367 Mass. 318 (1975)
Rule of Law:
A general residuary clause in a will is presumed to exercise a testamentary power of appointment that was originally general but was subsequently partially released by the donee to become a special power, unless a contrary intent is shown.
Facts:
- In 1904, Arthur Hunnewell's will created a trust that granted his daughter, Isabella, a general testamentary power of appointment over her share.
- In default of appointment, Isabella's share would be distributed to her intestate heirs.
- Following her mother's death in 1930, Isabella requested and received the bulk of her trust principal to manage personally.
- In 1944, Isabella, a New York resident, executed an instrument partially releasing her power, limiting the permissible appointees to the descendants of Arthur Hunnewell, thus converting it to a special power.
- Isabella died in 1968, leaving a will with a general residuary clause that bequeathed the remainder of her property to the issue of her deceased sister, Margaret Blake, who were permissible appointees under the special power.
- Isabella's will did not explicitly refer to the power of appointment created by her father's will.
Procedural Posture:
- The trustees under the will of Arthur Hunnewell filed a petition for instructions in the Probate Court to determine the proper distribution of a trust share.
- A judge of the Probate Court reserved decision and reported the case to the Appeals Court.
- The Supreme Judicial Court of Massachusetts transferred the case from the Appeals Court for direct review on its own motion.
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Issue:
Does a general residuary clause in a will exercise a testamentary power of appointment that was originally general but was later partially released by the donee to become a special power, where the will does not explicitly mention the power?
Opinions:
Majority - Wilkins, J.
Yes. A general residuary clause is presumed to exercise a power of appointment that was originally general but later voluntarily limited by the donee. First, the court determined that the law of the donor's domicile (Massachusetts), not the donee's domicile (New York), governs the question of whether a power of appointment was exercised, adhering to its well-established precedent for certainty and consistency. The court found no clear intent in Isabella's will to either exercise or not exercise the power, necessitating a rule of construction. While Massachusetts law typically holds that a residuary clause does not exercise a special power, the court distinguished this case. Because the power was originally general—akin to a property interest—and Isabella voluntarily limited it and had previously enjoyed the use of the trust property, she treated the property as her own. Therefore, the rationale underlying the rule for general powers is more appropriate, and the court presumes the power was exercised.
Concurring - Quirico, J.
Yes. The concurrence agrees with the outcome but would abolish the distinction between general and special powers of appointment for the purpose of this rule. The concurring opinion argues that a general residuary clause, which disposes of 'all the rest, residue and remainder of my property,' demonstrates a clear testamentary intent to dispose of all property the testator has the power to convey, regardless of the power's classification. The historical distinction between 'power' and 'property' is a source of perplexing subtleties and unnecessary litigation. The court should adopt a single, simplified rule: a general residuary clause exercises both general and special powers of appointment unless a contrary intent is shown and the beneficiaries are permissible appointees.
Analysis:
This decision carves out a significant exception to the established rule that a general residuary clause does not exercise a special power of appointment. It creates a hybrid category for powers that were once general, treating them as such for construction purposes based on the donee's prior relationship with the property. The court's adherence to its choice-of-law precedent demonstrates a preference for stability, while its main holding adapts common law to better effectuate presumed intent. The forceful concurrence suggests that the underlying distinction between general and special powers for this rule is unstable and may be completely abandoned in future Massachusetts jurisprudence.
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