EXERCISE OF POWERS OF APPOINTMENT: SHOULD INTENT TO EXERCISE BE INFERRED FROM A GENERAL DISPOSITION OF PROPERTY? SUSAN F. FRENCH* Powers of appointment are devices used in estate planning to post- pone selection of the recipients of the donor's property until some time after the date of the gift.' Such a power may be retained by the donor or granted to another. In either case, the holder of the power is called the "donee,"2 who may select the recipient of the property through an "exercise" or "execution" of the power. Exercise of a power requires some expression of the donee's intent to exercise in an instrument of the sort specified by the donor in the original gift.' Donors typically * Professor of Law, University of California, Davis; A.B. 1964, Stanford University; J.D. 1967, University of Washington. THE FOLLOWING CITATIONS WILL BE USED IN THIS ARTICLE: 5 AMERICAN LAW OF PROPERTY (AJ. Casner ed. 1952) [hereinafter cited as 5 AMERICAN LAW OF PROPERTY]; RESTATEMENT OF PROPERTY (1940) [hereinafter cited as RESTATEMENT]; E. SUGDEN, A PRACTICAL TREATISE OF POWERS (8th ed. 1861) [hereinafter cited as SUGDEN; J. WIGMORE, A TREATISE ON THE ANGLO-AMERICAN SYSTEM OF EVIDENCE IN TRIALS AT COMMON LAW (3d ed. 1940) [hereinafter cited as WIGMORE]. 1. Through their ability to postpone this selection process, powers of appointment introduce flexibility into the dispositive provisions of long-term trusts. See, e.g., A. CASNER, ESTATE PLAN- NING 689-782 (3d ed. 1961); J. TRACHTMAN, ESTATE PLANNING 201-11 (1968); H. TWEED & W. PARSONS, LIFETIME AND TESTAMENTARY ESTATE PLANNING 71-74 (8th ed. 1978); Halbach, The Use f Powers of ,4ppointmenti n Estate Planning, 45 IOWA L. REV. 691 (1960). 2. The terminology employed in this Article generally follows that of the Restatement of Property. A power of appointment is a power to designate the transferees of property or the shares among designated transferees, within limits specified by the creator of the power. A gen- eral power is one that can be exercised in favor of the donee or the donee's estate; a special power is one to appoint to or among the members of a group not unreasonably large. The creator of the power is the "donor," the holder of the power is the "donee," and the permissible appointees are the "objects" of the power. Finally, the donor may name a "taker in default," who receives the property should the donee fail to exercise the power. RESTATEMENT §§ 318-320. 3. 5 AMERICAN LAW OF PROPERTY § 23.37; 3 R. POWELL, REAL PROPERTY %3 96 (P. Rohan rev. ed. 1979); RESTATEMENT, Introductory Note to Topic 6, at 1904; L. SIMES & A. SMITH, THE LAW OF FUTURE INTERESTS §§ 972-973 (2d ed. 1956). DUKE LAW JOURNAL [Vol. 1979:747 require exercise by deed or by wil. 4 When the donee holds a testamentary power, that is, a power exer- cisable by will, the courts often face a serious problem in determining whether his will manifests an intent to exercise the power. If the will does not specifically mention the power, but disposes of the donee's property only in general terms or through a residuary clause, his intent as to exercise is unclear. For example, a donor may convey property to trustees to hold for the benefit of the donee for life, then to distribute the remainder as the donee shall appoint by will, and, in default of appointment, to the donor's children.' The donee dies testate, and his will states only, "I give all my property to R." The donee may have intended that the property subject to the power pass to R with the rest of the donee's estate; on the other hand, the donee may have intended that only his own property go to R, and that the appointive property go to the takers in default of appointment, the donor's children. Since 1599, English and American courts and legislatures have been troubled by this problem and have attempted to resolve the issue in various ways.6 None of these solutions, however, has proved wholly satisfac- tory. Part I of this Article analyzes the nature of the problem presented by a testamentary disposition that may or may not have been intended to exercise the power of appointment and sets forth in summary form the various approaches to the problem currently employed in American jurisdictions. Part II then traces the development of judicial responses to the problem from 1599 to the 1830s, when dissatisfaction with the case law led to statutory reform. Part III discusses the statutes of the 1830s, concluding that they created the same kind of problem as did the prior case law. To demonstrate the inadequacy of these reform stat- utes, Part IV presents a sample of the cases decided under them and concludes that neither the pre-1830 case law nor the reform statutes provided a satisfactory solution to the problem, as both refused to per- mit consideration of any evidence extrinsic to the will in determining whether the donee intended to exercise the power. Part V then traces and analyzes the development of the American common law in those states that did not enact reform statutes. Part VI deals with modem statutes governing whether a general residuary clause exercises a power 4. The donor may also specify a less formal means of exercise, such as a letter addressed to the trustee. 5. If created by the donor's will, this would be a typical marital deduction trust provision. See TWEED & PARSONS, supra note I, at 61. 6. The question of exercise by means other than a direct statement reciting the existence of the power and the intent to exercise apparently first arose in Sir Edward Clere's Case, 77 Eng. Rep. 279 (K.B. 1599). Vol. 1979:747] POWERS OFA PPOINTMENT of appointment. Discussion of these statutes, together with the discus- sion of the American common law in Part V, forms the basis for the solution outlined in Part VII. The Article concludes with a proposal for nationwide enactment of this solution, suggesting that uniformity among jurisdictions is a prerequisite to a wholly satisfactory solution. I. ANALYSIS OF THE PROBLEM AND SUMMARY OF CURRENT SOLUTIONS The power of appointment separates the power to dispose of prop- erty from the basic ownership of the property.7 The device makes the power to dispose completely independent of ownership, giving the do- nee the advantage of the power to dispose without the liabilities of property ownership.8 From this essential character of the power of ap- pointment stems the requirement that exercise of the power occur only as the result of a volitional act by the donee. Unless the donee acts to exercise the power, the ownership of the property continues undis- turbed.9 For example, a donor might transfer property to trustees to pay income to her parent for life, then to distribute the principal as her spouse appoints by deed or will, and, in default of appointment, to a named charity. The spouse, the donee of the power, has no ownership interest in the trust property, having only the power to dispose of the remainder. Despite the label "taker in default," the named charity is the owner of the remainder, which is regarded as vested subject to di- 7. General discussions of the nature and operation of powers of appointment may be found in 5 AMERICAN LAW OF PROPERTY § 23.1; 3 POWELL, supra note 3, 385; SIMES & SMITH, supra note 3, § 861. 8. An obvious liability of ownership is that the assets are available to creditors. Ownership of a special power does not subject the appointive property to the donee's creditors because the donee has no beneficial interest. RESTATEMENT § 326. In the absence of a statute, creditors of the holder of a general power cannot reach the appointive property unless the donee has exercised the power. Quinn v. Tuttle, 104 N.H. 1, 3, 177 A.2d 391, 393 (1962); RESTATEMENT § 327. Where the donee has exercised a general power, the courts are divided: the majority position is that the assets may be reached to satisfy the donee's debts. RESTATEMENT §§ 329-330. This may be true even if the appointment is defective. Gilman v. Bell, 99 Ill. 144, 149 (1881). A minority of courts refuse to allow the donee's creditors to reach the assets unless the assets are appointed to the decedent's estate. See, e.g., St. Matthews Bank v. De Charette, 259 Ky. 802, 817, 83 S.W.2d 471, 478 (1935). See also Annot., 97 A.L.R. 1070 (1935); Annot., 59 A.L.R. 1510 (1929). 9. Most powers of appointment are entirely discretionary with the donee. 5 AMERICAN LAW OF PROPERTY § 23.37. Some special powers have been labeled "imperative" or "powers in trust." When the donee has failed to exercise a special power, and the donor has failed to include an express gift in default, the appointive property will nevertheless pass to the objects of the spe- cial power named in the donor's will. See, e.g., Daniel v. Brown, 156 Va. 563, 159 S.E. 209 (1931); Gray, Powers in Trust and Gfts Implied in Default ofA ppointment, 25 HARV. L. REv. 1 (1911). This Article is not concerned with cases in which the exercise of the power is not dependent on any intent of the donee to exercise. DUKE LAW JOURNVAL [Vol. 1979:747 vestment by exercise of the power.'0 Until the donee chooses to exer- cise the power, the charity remains the owner. A power of appointment is personal to the donee and expires at his death. If the donee dies without having exercised the power, the charity's ownership becomes absolute. " Because the donee is not the owner of the appointive assets, they will not descend on his death to his intestate successor,'2 nor will they pass under a disposition of property in his will unless the will exer- cises the power.13 Assuming the donee has the power to appoint by will, the question whether the will exercises the power depends on the donee's intent. In some cases the donee's intent is unmistakably clear. When the donee's will recites the existence of the power, describes the property subject to the power, and then states that the donee does or does not intend to exercise the power, no question arises as to the donee's intent. If such a will is properly executed and the named appointee is alive and is a permissible appointee, the donee's intent is given effect." In a second class of cases, it is possible to infer whether the donee intended to exercise the power. When the donee's will does not men- tion the power, but disposes of the property subject to the power, the donee clearly intends to execute the power. For example, if the donee's will devises Blackacre to X when the donee has only a power over Blackacre, it is clear that the donee intended to exercise the power by his will. The donee's intent is equally obvious when his will disposes only of property that is unmistakably his own. For example, if a donee owning Blackacre devises it to X and makes no other disposition in his will, the will demonstrates no intent to exercise the donee's power over any appointive property.' In a third category of cases, however, the donee's intent is not clearly inferable from the language of his will as applied to his estate. In these situations the donee's will typically makes a disposition of property similar to the appointive property but does not refer to the existence of the power. Further, the donee may own or might have 10. Willis v. Martin, 100 Eng. Rep. 882, 896-97 (K.B. 1790). 11. SIMES & SMITH, supra note 3, § 943. The property is relieved of the burden of the power that, had it been exercised, would have divested the interest of the taker in default. 12. 5 AMERICAN LAW OF PROPERTY § 23.62; see RESTATEMENT § 367. 13. See RESTATEMENT § 343. 14. For a discussion of the problems presented when the appointee predeceases the donee, see French, Application ofAntilapse Statutes to Appointments Made By Will, 53 WASH. L. REv. 405 (1978). 15. No inference of intent to exercise a power can be drawn from the disposition of property that is clearly not subject to the power and that the donee disposes of by virtue of ownership of the property. See SIMES & SMITH, supra note 3, § 973. POWERS OFA PPOINTMENT Vol. 1979:747] owned property, aside from that subject to the power, that passes or could have passed under the will. Cases involving such dispositions range from a bequest of stock in a named corporation to a disposition of "all real and personal estate" of the donee.t6 In such situations the disposition in the donee's will may or mhay not apply to the property subject to the power. The legatees or devisees under the donee's will claim the appointive assets as appointees; the donor or the donor's transferees claim the property as takers in default.'7 Proper resolution of their conflicting claims depends on whether the donee intended the disposition of property in his will to exercise the power. Resolution of the conflicting claims of the takers in default and the takers under the donee's will is determined by three factors: the basic assumption the court makes in deciding whether a general disposition in the donee's will is intended to exercise the power; the extent to which extrinsic evidence of the donee's intent will be admitted; and the amount or quality of evidence required to overcome the basic assump- tion. Early in the development of the common law of powers, the Eng- lish courts created the assumption that a disposition of the appointive property without reference to the power was not intended to execute the power. 8 The only extrinsic evidence they admitted was of the as- sets owned by the donee at the time the will was executed, and such evidence could support an inference of intent to exercise the power only when the evidence was conclusive.'9 In a number of cases, the English courts reached results that clearly frustrated the donee's intent. Dissatisfaction with these cases led to enactment of reform statutes 16. The most common situations are those in which the donee's will contains a residuary clause or a clause disposing of all the donee's property. Since the property disposed of is described in such general terms as "estate" or "property," it could include the property subject to the power, or equally well not include it. Less frequently, the ambiguity may appear in the provision for a legacy. See 5 AMERICAN LAW OF PROPERTY §§ 23.39-.40; 3 POWELL, supran ote 3, T 397; SIMES & SMITH, supra note 3, § 973. 17. The donor will ordinarily transfer the interests in default of appointment by the same instrument that created the power. However, if the power is created by an inter vivos instrument that makes no gift in default of the appointment, the donor retains the interest subject to the power (which would ordinarily be a reversion). On the death of the donor, this interest would pass to her successors, testate or intestate. 18. Powers of appointment have been used since at least the latter half of the fifteenth cen- tury. Berger, The GeneralP ower of Appointment as an Interest in Property, 40 NEB. L. REV. 104, 107 (1960); Powell, Powers ofAppointment, 10 BROOKLYN L. REv. 233 (1941). Sir Edward Clere's Case, 77 Eng. Rep. 279 (K.B. 1599), discussed in notes 42-45 infra and accompanying text, was the first to decide that anything other than an express reference to the power could result in exercise. The requirement of affirmative action to exercise the power follows from the fact that the power is different from ownership of the property. See text accompanying notes 7-9 supra. 19. See notes 42-103 infra and accompanying text. DUKE LAW JO URNVAL [Vol. 1979:747 in England and New York in the 1830s.20 These statutes reversed the basic assumption, providing that a general disposition of property by the donee would exercise a power of appointment. The English statute applied only to general powers; the New York statute applied to all powers. Several American states enacted statutes based on one or the other of these models.2' Under both of these statutes, all extrinsic evi- dence of the donee's intent was excluded, even that which would have been permitted under the prior case law.22 Again the result has been frustration of the donees' intent. American jurisdictions that did not enact statutes based on the 1830s reforms have retained the basic assumption that a general dispo- sition or residuary clause is not intended to exercise the power. The case law of these states differs, however, from the pre-1830 case law in that extrinsic evidence of the circumstances surrounding execution of the donee's will is admissible. Because these states had no controlling statutes, the courts were able to follow contemporary trends in interpre- tation of wills, which had led to the general admissibility of extrinsic evidence by the early 1800S.23 Although the results in these jurisdic- tions are generally better than those in jurisdictions with statutes based on the 1830s reforms, a simple repeal of those statutes and a return to the common law will not provide a satisfactory solution. There are significant differences among American common law rules governing the kinds of extrinsic evidence that are admissible,24 and, more impor- 20. I N.Y. Rev. Stats. pt. II, ch. I, tit. 2, § 126 (1836); Wills Act of 1837, 7 Will. 4 & I Vict., c. 26, § 27. 21. See notes 128-31 infra and accompanying text. 22. The English statute expressly provided that a general devise or bequest would exercise a general power "unless a contrary Intention shall appear by the Will." 7 Will. 4 & 1 Vict., c. 26, § 27 (1837). The language of the New York statute was that the general devise would exercise the power "unless the intent that the will shall not operate as an execution of the power, shall appear, expressly or by necessary implication." I N.Y. Rev. Stats. pt. II, ch. 1, tit. 2, § 126 (1836). Lock- wood v. Mildeburger, 159 N.Y. 181, 53 N.E. 803 (1899), held that any "necessary implication" must be from the language of the will, not from extrinsic circumstances. 23. J. THAYER, A PRELIMINARY TREATISE ON EVIDENCE AT THE COMMON LAW 445 (1898); 9 WIGMORE § 2470. 24. The principal difference concerning the admissibility of extrinsic evidence arises over direct declarations of the testator's intent. The majority of jurisdictions exclude such declara- tions-creating an exception to the general rule of admissibility of evidence of circumstances sur- rounding execution of the will-unless there is an "equivocation" or, in the language of Lord Bacon, a "latent ambiguity," in which case there is an exception to the exception, and the direct declarations of intent are admissible to resolve the ambiguity. 4 W. BowE & D. PARKER, PAGE ON WILLS § 32.9 (rev. ed. 1961); RESTATEMENT § 242, Commentj; 9 WIrMORE § 2471. A minor- ity of jurisdictions admit evidence of direct declarations of the testator's intent regardless of the presence of an equivocation. See, e.g., Smith v. Nelson, 249 Ala. 51, 29 So. 2d 335 (1947); North- em Trust Co. v. Cudahy, 339 Ill. App. 603, 91 N.E.2d 607 (1950) (statements could be used to show what the words meant, but not what the testator intended to write); Wilson v. Flowers, 58 N.J. 250, 277 A.2d 199 (1971). Vol. 1979:7471 PO WERS OFA 4PPOINTMENT tantly, governing the strength or quality of the evidence necessary to support an inference of intent to exercise the power. Some jurisdictions insist that the evidence be so strong that no other inference can fairly be drawn, while others require only a preponderance of the evidence to support an inference of intent to exercise.25 During the 1960s and 1970s, a number of American states adopted new statutes because of changes in the tax laws.26 These new statutes27 generally operate against any inference of intent to exercise, either by codifying the common law assumption that a general disposition of property is not intended to exercise a power, or by reversing a prior statutory assumption favoring exercise. Some, but not all, of these new statutes permit consideration of extrinsic evidence of the donee's intent. None of them addresses the question whether declarations of the do- nee's intent are admissible, and none of them specifies the amount or quality of evidence required to support an inference that the donee in- tended to exercise her power. Today there are statutes in twenty-nine states that create a basic assumption as to whether a general disposition of property or a residu- ary clause in the donee's will is, in the absence of other evidence, suffi- cient manifestation of intent to exercise the power.28 Four of these statutes give an unqualified yes: the residuary clause exercises the power.29 Eight of the statutes answer yes, but only if the power is a general power.3° Three of the statutes give a highly qualified yes: the residuary clause exercises the power only if the power is general and only if there is no express gift in default in the instrument creating the power.31 Of these statutes, all but California's, and perhaps Wiscon- The California Probate Code appears to exclude the use of a testator's oral declarations to correct imperfect or ambiguous descriptions. CAL. PROB. CODE § 105 (West 1956). However, it has been held not to exclude the testator's instructions to the scrivener. In re De Moulin's Estate, 101 Cal. App. 2d 221, 225 P.2d 303 (1950). 25. See text accompanying notes 199-215 infra. 26. See notes 220-24 infra and accompanying text. 27. See note 225 infra and accompanying text. 28. Recently enacted statutes are discussed in detail at notes 225-74 infra and accompanying text. 29. Ky. REv. STAT. § 394.060 (1970); N.Y. EST., POWERS & TRusTs LAW § 10-6.1 (McKin- ney 1967); OKLA. STAT. ANN. tit. 84, § 164 (West 1970); S.D. COMPILED LAWS ANN. § 29-5-24 (1976). 30. CAL. CIV. CODE § 1386.2 (West Cum. Supp. 1978); D.C. CODE ENCYCL § 18-303 (West 1967); N.C. GEN. STAT. § 31-43 (1976); 20 PA. CONS. STAT. ANN. § 2514(14) (Purdon 1975); R.I. GEN. LAWS § 33-6-17 (1969); S.C. CODE § 21-7-430 (1976); VA. CODE § 64.1-67 (1973); W. VA. CODE § 41-3-6 (1966). 31. MD. EST. & TRusTs CODE ANN. § 4-407 (1974); MICH. COMP. LAWS ANN. § 556.114 (Cum. Supp. 1978-79); Wis. STAT. ANN. § 702.03(2) (West 1978). 754 DUKE LAW JOURNAL [Vol. 1979:747 sin's, prevent consideration of extrinsic evidence of the donee's intent.32 Fourteen statutes answer no: the residuary clause alone does not exer- cise the power.33 None of these statutes prevents consideration of ex- trinsic evidence. In the twenty-one states inw hich there are no statutes, the answer is also no.34 The possibilities for confusion and mistake inherent in the number of different rules on whether and under what circumstances a general disposition or residuary clause exercises a power of appointment have been compounded by the traditional choice of law rule. Under the traditional rule, the question whether the donee's will exercises the power is governed by the law of the state that governs interpretation of the instrument that created the power, usually the law of the donor's domicile or of the situs of the trust.35 Lawyers may easily overlook the fact that the law determining whether the donee's will exercises the power is not that of the donee's domicile or of the state where the will is executed.36 Although the modem dominant interest approach37 might 32. See notes 238-58 & 264-74 infra and accompanying text. 33. ALASKA STAT. § 13.11.265 (1972); ARIz. REV. STAT. § 14-2610 (1975); COLO. REV. STAT. §§ 15-2-303, 11-610 (1973); FLA. STAT. ANN. § 732.607 (West 1976); 1976 Haw. Sess. Laws, act 200, § 2-610; IDAHO CODE § 15-2-610 (1979); MASS. GEN. LAWS ANN. ch. 191, § IA (West Cum. Supp. 1978-79); MINN. STAT. ANN. § 524.2-610 (West 1978); MONT. REV. CODES ANN. § 91A-2- 610 (1975); NEB. REV. STAT. § 30-2348 (1975); N.M. STAT. ANN. § 32A-2-610 (1976); N.D. CENT. CODE § 30.1-09-10 (1976); OR. REV. STAT. § 112.410 (1975); UTAH CODE ANN. § 75-2-610 (1977). 34. United States v. Merchants Nat'l Bank, 261 F.2d 570 (5th Cir. 1958); Harrison v. Lee, 3 F.2d 796 (5th Cir. 1925); Mastin v. Merchants Nat'l Bank, 278 Ala. 261, 177 So. 2d 817 (1965); Welch v. Tarver, 256 Ark. 272, 507 S.W.2d 505 (1974); DiSesa v. Hickey, 160 Conn. 250,278 A.2d 785 (1971); Carlisle v. Delaware Trust Co., 34 Del. Ch. 133, 99 A.2d 764 (1953); May v. Citizens & S. Bank, 223 Ga. 614, 157 S.E.2d 279 (1967); Northern Trust Co. v. House, 3 IllA.p p. 2d 10, 120 N.E.2d 234 (1954); Crawfordsville Trust Co. v. Elston Bank & Trust Co., 216 Ind. 596, 25 N.E.2d 626 (1940); Crecelius v. Smith, 255 Iowa 1249, 125 N.W.2d 786 (1964); Seltzer v. Schroeder, 409 S.W.2d 777 (Mo. App. 1966); Faulkner v. Faulkner, 93 N.H. 451, 44 A.2d 429 (1945); Penn- sylvania Co. for Ins. on Lives & Granting Annuities v. Morrell, 108 N.J. Eq. 188, 154 A. 416 (1931); King v. Richardson, 7 Tenn. App. 535 (1928) (inter vivos disposition effective because otherwise inoperative); Republic Nat'l Bank v. Fredericks, 155 Tex. 79, 283 S.W.2d 39 (1955); cf. Sinke v. Muncie, 110 Kan. 345, 203 P. 1102 (1922) (instrument otherwise inoperative will exercise power); Bar Harbor Banking & Trust Co. v. Preachers' Aid Soe'y of the Methodist Church, 244 A.2d 558 (Me. 1968) (intent to exercise found from evidence extrinsic to the will); RESTATEMENT § 343. The law of Ohio is somewhat uncertain, but it appears that a residuary clause will not exer- cise a power in that state. Compare Kiplinger v. Armstrong, 34 Ohio App. 348, 171 N.E. 245 (1930) with Dollar Say. & Trust Co. v. First Nat'l Bank, 32 Ohio Misc. 81, 285 N.E.2d 768 (C.P. 1972) and Dollar Say. & Trust Co. v. Kirkham, 21 Ohio Misc. 163, 255 N.E.2d 892 (C.P. 1969). 35. First Nat'l Bank v. Ettlinger, 465 F.2d 343 (7th Cir. 1972); Beals v. State St. Bank & Trust Co., 367 Mass. 318, 326 N.E.2d 896 (1975); Bank of N.Y. v. Black, 26 N.J. 276, 139 A.2d 393 (1958); In re Deane's Will, 4 N.Y.2d 326, 151 N.E.2d 184, 175 N.Y.S.2d 21 (1958); In re Estate of Huntington, 9 Misc. 1012, 170 N.Y.S.2d 452 (Sur. Ct. 1957); 5 A. ScoTT, LAW OF TRUSTS § 642, at 4061-65 (3d ed. 1967); Durand & Herterich, Conflict ofLaws andtheE xercise ofPowers ofAppoint- ment, 42 CORNELL L.Q. 185, 190 (1957). 36. See, e.g., In re Deane's Will, 4 N.Y. 2d 326, 151 N.E.2d 184, 175 N.Y.S.2d 21 (1958). 37. See In re Bauer, 14 N.Y.2d 272, 200 N.E.2d 207, 251 N.Y.S.2d 23 (1964); RESTATEMENT Vol. 1979:747] POWERS OFA PPOINTMENT alleviate this problem, courts have not yet applied it in the powers of appointment area,38 and it still might result in applying the law of some state other than that anticipated by the drafter of the donee's will.39 The combination of choice of law rules and rules excluding extrinsic evidence40 has often produced results that are clearly contrary to the intent of the donee.4a II. DEVELOPMENT OF THE DOcTRINE OF EXERCISE BY IMPLICATION: 1599-1830 In Sir Edward Clere's Case,42 decided in 1599, the English courts first considered whether a power of appointment could be exercised by a will that did not refer to the power. In that case, the owner of a tract of land made a feoffment to the use of such persons as he should ap- point by his will.43 His will devised the real estate subject to the power but did not mention the power. Although he owned the land subject to the power, he was not able to devise it directly because of the limita- tions imposed by the Statute of Wills.' The description of the property contained in the will, however, unequivocally referred to the appoin- tive real estate, and the court held that the devise in his will must have exercised the power: "[O]therwise the devise shall be utterly void. 45 (SECOND) OF CONFLICT OF LAWS § 6 (1971); 65 COLUM. L. REV. 348 (1965). 38. See cases cited note 35 supra. 39. The state whose law governs interpretation of the donee's will might not have the domi- nant interest in the devolution of the appointive assets. Even the drafter conscious of the problem might not anticipate correctly the weight to be assigned to factors such as the situs of the trust and the domicile of the donor and the takers in default. See, e.g., Bank of N.Y. v. Black, 26 N.J. 276, 292, 139 A.2d 393, 401-02 (1958); In re Deane's Will, 4 N.Y.2d 326, 331, 151 N.E.2d 184, 186, 175 N.Y.S.2d 21, 23-24 (1958). See Annot., 15 A.L.R.3d 346 (1967), and Annot., 16 A.L.R.3d 911 (1967), for collections of cases litigating the question whether a power has been exercised by a general disposition or residuary clause. 40. This would also apply to a lesser extent to those rules excluding testators' declarations, particularly instructions to the drafter of the will. 41. See, e.g., In re Deane's Will, 4 N.Y.2d 326, 151 N.E.2d 184, 175 N.Y.S.2d 21 (1958). See text accompanying notes 136-44 infra. 42. 77 Eng. Rep. 279 (K.B. 1599). This case also established the validity of the power appen- dant, a power of the owner in fee simple to appoint a fee simple, which could exist separately from the ownership itself. The case illustrates the utility of the device. See id. at 280 n.(B). 43. This device was used to provide landowners with a means of controlling the devolution of their property by will when lands were not otherwise devisable. 7 W. HOLDSWORTH, A HISTORY OF ENGLISH LAw 150-51 (1926); 4 W. HOLDSWORTH, A HISTORY OF ENGLISH LAW 474-75 (1924); T. PLUCKNETT, A CONCISE HISTORY OF THE COMMON LAW 580-82 (5th ed. 1956). 44. The Statute of Wills, 32 Hen. 8, c. 1 (1540), conferred complete powers to devise over socage lands and over two-thirds of land held by knight-service. PLUCKNMrT, supra note 43, at 587. 45. 77 Eng. Rep. at 280. In Clere's Case, Clement Harwood was seized of three acres of land, each of equal value, held in capie. He made a feoffment of two acres in fee to the use of his wife DUKE LAW JOURNAL [Vol. 1979:747 The holding in Clere's Case was confirmed by Lord Hardwicke in 1739,46 and throughout the following century, the English Court of Chancery developed and refined the principle that a disposition of property subject to a power could sufficiently manifest intent to exer- cise the power. The first question to arise was whether a general disposition of property similar to the appointive property sufficiently manifested an intent to exercise. In Molton v. Hutchinson4,7 also decided in 1739, the court held that a residuary bequest of personal property would not ex- ercise a power over £400 of South Sea stock.48 The report of the case does not state whether the donee owned any personal property that passed under the residuary bequest. Five years later, in Exparte Cas- wall,49 the court held that a general devise of "my effects, real and per- sonal, of what nature kind or quality so ever"5 did not exercise a power over real estate. The donee in that case did own other real estate that passed under this devise5." In 1752 the court extended the princi- for herjointure. He later made a feoffment by deed of the third acre to the use of such persons as he should appoint by his will. His will devised the third acre to the plaintiffs predecessor in interest. Id. at 279. The court held that the third acre passed under the will as an execution of the power because his ability to devise was exhausted by the feoffment of the two acres to the use of his wife. Since he could not make a devise, "the devise ought of necessity to enure as a limitation of an use, or otherwise the devise shall be utterly void." Id. at 280 (footnote omitted). 46. In Probert v. Morgan, 26 Eng. Rep. 281 (Ch. 1739), Lord Hardwicke stated: If a man has a power to charge an estate, it is not necessary, in the execution of it, he should refer to the deed out of which the power arises; for in a court of equity it is enough that his intent appears, and if in the execution he sufficiently describes the estates he had a power to charge, the estate is certainly bound .... Id. (emphasis in original). Since Probert,i t has been settled that the donee's bequest or devise of the property subject to the power is a sufficient manifestation of intent to exercise the power. See SUODEN 337-38. 47. 26 Eng. Rep. 351 (M.R. 1739). 48. Id. The report states: Parol evidence was offered to prove it was the intent of Freeman Cutler, that the £400 should be disposed of by his will, but was not allowed. The Master ofthe Rolls, though he acknowledged a man might execute a power or [sic] appointment, without particularly reciting it, yet here he held this was not an execu- tion of the power, but the £400 must go over according to the will of the first testator. Id. 49. 26 Eng. Rep. 351 (M.R. 1744). George Caswall, Sr., surrendered copyhold estate to the use of his wife for life, then to his children, for life, then in trust to such uses as he should appoint, in default of appointment to his son John. His will gave the residue of his estate to his other son George. Son John had died a bankrupt a year before the testator's will was executed. Son George petitioned to remove the appointive property from bankruptcy on the ground that the will made a good appointment to him. His petition was denied. 50. Id. 51. The court said: Though a man may execute a power without reciting, or taking the least notice of the power, yet it is necessary he should mention the estate which he disposes of, and must do such an act as shews he takes notice of the thing which he had a power to dispose of.