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Cessac v. Stevens

Fla: Dist. Court of Appeals, 1st Dist.
127 So. 3d 675 (2013)
ELI5:

Rule of Law:

When a trust instrument grants a power of appointment and requires that it be exercised by making a 'specific reference to the power,' the donee's will must strictly comply with this requirement. Merely referencing the trust itself, without referencing the power of appointment, is insufficient to validly exercise the power.


Facts:

  • Stanton P. Kettler created three trusts for the benefit of his daughter, Sally Christiansen.
  • Each trust granted Christiansen a power of appointment, exercisable by her will, to direct the distribution of the trust's assets upon her death.
  • The trusts explicitly required that any exercise of this power be done by 'making specific reference to the power herein granted.'
  • The trusts provided that if Christiansen failed to properly exercise the power, the remaining assets would be distributed to her children.
  • Christiansen later executed a will devising the residue of her estate to Joanne Cessac.
  • The will contained a clause stating that her estate assets included the three trusts, identifying one by name and the others by the location of their accounts.
  • Christiansen's will made no reference to any power of appointment.
  • Sally Christiansen passed away in January 2011.

Procedural Posture:

  • After Sally Christiansen's will was admitted to probate, her daughter, Marcia Stevens, filed a petition for declaratory judgment in the probate court.
  • The petition sought a declaration that the assets in the three trusts were not property of the estate.
  • Stevens filed a motion for summary judgment, which the trial court referred to a general magistrate.
  • The magistrate issued a report recommending that the motion for summary judgment be granted, finding the will had failed to properly exercise the powers of appointment.
  • Appellants (Joanne Cessac, et al.) filed exceptions to the magistrate's report.
  • The trial court overruled the exceptions, adopted the magistrate's report, and entered judgment declaring the trust assets were not the property of the decedent's estate.
  • The Appellants appealed the trial court's judgment to the Florida First District Court of Appeal, with Marcia Stevens, et al. as Appellees.

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Issue:

Does a will that identifies a trust by name and location, but fails to mention the power of appointment granted by that trust, validly exercise the power when the trust instrument requires a 'specific reference to the power' for its execution?


Opinions:

Majority - Wetherell, J.

No. A will that identifies a trust but fails to mention the power of appointment does not validly exercise the power when the trust instrument requires a specific reference to the power itself. The validity of an exercise of a power of appointment depends not on the intent of the donee, but on whether the power was exercised in the precise manner prescribed by the donor. A donor may prescribe any arbitrary ceremonies for the execution of a power, and they must be satisfied by a strictly literal performance. Here, the donor required a 'specific reference to the power,' and merely identifying the trusts did not satisfy this requirement, not even under a substantial compliance theory. The decedent's will made no reference at all to any power of appointment, which is a fatal defect that cannot be cured by extrinsic evidence of her intent.



Analysis:

This decision solidifies the principle of strict compliance for the exercise of powers of appointment in Florida, prioritizing the donor's explicit requirements over the donee's apparent intent. The court clearly rejects a 'substantial compliance' or intent-based approach where the donee completely fails to mention the power itself. This ruling serves as a stark warning to estate planning practitioners that they must meticulously review the language of governing instruments and precisely mirror the required formalities in testamentary documents. Failure to do so will invalidate the intended disposition, even if the donee's intent seems clear from other language in the will.

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