Motes/Henes Trust v. Motes
761 S.W.2d 938, 297 Ark. 380, 1988 Ark. LEXIS 555 (1988)
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Rule of Law:
A general residuary clause in a will referring to any power of appointment may be sufficient to exercise a power created in a separate instrument, even if that instrument requires a 'specific reference' to the power, provided there is strong extrinsic evidence demonstrating the testator's intent to exercise it.
Facts:
- In 1979, Helen Fay Henes executed a will with a residuary clause that bequeathed all remaining property, including any 'property to which I may have a power of appointment at the time of my death.'
- In 1982, Henes and her sister, Elizabeth Henes Motes, established the Motes/Henes trust, funded with approximately $6,000,000.
- The trust agreement granted each sister a power of appointment over her share, exercisable only 'by specific reference hereto, appoint in her Last Will and Testament.'
- The same attorney, John L. Johnson, drafted both Henes's 1979 will and the 1982 trust agreement.
- Johnson testified that Henes intended for the property to benefit her sister during her life and then pass to her sister's children (Henes's nieces and nephews).
- Johnson stated that when drafting the trust, he reviewed Henes's existing will and believed its language was sufficient to exercise the new power of appointment consistent with her intent, so he did not amend it.
- Helen Fay Henes died in April 1983, without having changed her 1979 will.
Procedural Posture:
- The trustee of the Motes/Henes trust petitioned the trial court (chancery court) for a construction of the power of appointment in Helen Fay Henes's will.
- The probate and chancery proceedings were consolidated by the trial court.
- Following a hearing, the trial court ruled that the language in the will was sufficient to exercise the power of appointment defined in the trust.
- The trustee and Elizabeth Henes Motes, as appellants, appealed the trial court's decision to the state's highest court.
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Issue:
Does a will's general reference to 'property to which I may have a power of appointment at the time of my death' validly exercise a power of appointment in a trust that requires the power be exercised by 'specific reference hereto' in the will?
Opinions:
Majority - Steele Hays, Justice
Yes, the will's general reference validly exercises the power of appointment. When determining if a power of appointment has been exercised, the testator's intent is the paramount principle, and courts should favor a flexible interpretation over a literal one when evidence of intent is strong. Here, the testimony of the attorney who drafted both the will and the trust provided powerful evidence of Helen Fay Henes's intent to have her will control the disposition of the trust assets. The court found this evidence, combined with the negative tax consequences of non-exercise, sufficient to overcome the trust's requirement for a 'specific reference.' The court adopts the reasoning that where intent is clear, technical defects should be corrected to effectuate the testator's wishes, similar to how wills are construed to dispose of after-acquired property.
Analysis:
This decision aligns Arkansas with a modern, intent-focused approach to interpreting powers of appointment, moving away from strict, formalistic compliance. It establishes that a 'specific reference' requirement is not an absolute barrier if sufficient extrinsic evidence can prove the donee's intent to exercise the power. This ruling provides courts with flexibility but also introduces a degree of uncertainty, as the validity of an attempted exercise now depends on the strength of the available evidence of intent rather than on a clear, bright-line rule of compliance. Future litigation in this area will likely focus on gathering and presenting evidence of the testator's state of mind and testamentary plan.
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