No. 88-560
IN THE SUPREME COURT OF THE STATF OF MONTAbTA
1989

IN THEMATTER OF THE ESTATE OF J!ACK R. ALLEN, Deceased.

APPEAL FROM: District Court of the Ninth Judicial.District, 

### In and for the County of Toole, The Honorable R.D. McPhill-ips,Judgepresiding.
COTTNSEL 

### OF RECORD:
ForAppellant: Selden S. Frisbee,Cut Rank,Montana
For Respondent: Marc Buyske; Anderson, Reattv & RuysFe, Shelhv, Montana



### 5

L3 Submitted on Briefs: March 23,

.,'2

. - 0

8 LLI Decided: April 19, 1989

### Mr. Justice F.. 

### C. McDonough delivered the Opinion of the Court.
This appeal from the Ninth Judicial District Court, Toole County,concerns the exercise of apower of appointment granted Lillian E. 

### Allen by the 1-astwill and testament of 

### her husband, Mack R. 

### Allen. Both Lillian and Mack were domiciled in Minnesota at the time of their deaths. The present proceeding concerns the exercise of the power in 

### regard to property situated in Toole County, Montana. The only issue is whether the District Court correctly concluded that Lillian failed to exercise thepower. We affirm. Mack's will created a marital deduction trust and a residuary trust for the benefit of Lillian. The will directed that 50% 

### of the assets OF 

### Mack's adjusted gross estate be used to fund the marital deduction trust, and that the rest of such estate be used to fund the residuary trust. The will also provided that on the death of Lillian, the remainder of the residuary trustbe distributed to Robert S. 

### Allen and Marjorie W. 

### Allen. The remainder of the marital deduction trust under the terms of Mack's will was also to pass to Robert S. 

### Allen and Marjorie W. 

### Allen unless Lillian exercised thepower of appointment in her will. This dispute arose after the death of both Mack and Lillian. At the time of his death, Mack owned a royalty interest inminerals in Toole County,Montana. No mention of the royalties was made in the probate of either Mack's or Lillian's estates. FollowingLillian's death, the royalties were discovered and this proceeding was initiated. Respondents argued that the royalties should pass entirely to Robert S. 

### Allen and MarjorieW. 

### Al-lenas part of the residuary trust. Appellants contended that half of the royaltiesshould be considered tobe part of the marital deduction trust and thus pass to the heirs of TJillianas directed by the general residuary clause of her will. The DistrictCourt held that.the royaltieswere part of the residuary trust, and thus they passed to Robert S. Allen and Marjorie W. Allen upon termination of the trusts. We affirm for a different reason. It makes no difference which trust contained the royalties if Lillian failed to exercise the power of appointment in the language of her will. We find that-und.erMontana law,T.,illianfailed to exercise the power. Appellants argue that Montana law does not control the issue because the Minnesota Probate Court decreed that the will. exercised the power, and Montana courts are hound h:7 this determination. This argument ignores the rule that the intention of the testator in devising an interest in land is controlled by the law of the situs. 16 

### Am. Jur. 2d, Conflict of Laws § 

### 72 at 114 (2ded. 

### 1979). Lillian's will does not specifically exercise the power granted under her husband's will. Her will does provide a residuary clause reading:
All of the rest,residue and remainder of

### my estate of every kind and nature, wheresoever situated and whether now owned by me or hereafter acquired by me, I give, devise and bequeath unto THE FIRST NATIONAL RANK OF MINNEAPOLIS 

# . .

# . as Trustees

# . ..
In many jurisdictions, a will with a general residuary clause does manifest an intent to exercise a power. See Comment,Uniform ProbateCode,

### S 2-610. However,Montana has adopted 

### 5 2-610 from the Uniform Probate Code as S 72-2-518, MCA, which provides the contrary rule:No implied exerciseof power of appointment. A general residuary clause in a will or a will making general disposition of allof the testator's property does not exercise a power of appointment held by the testator unless specific reference is made tothepower orthere is some other indication of intention toinclude theproperty subjecttothe power. The reason for requiring a specific exercise of a power is statedintheComment to3 2-610, Uniform Probate Code:
Although a substantial number of states have legislation to the effect that a will with a general residuary clause doesmanifest an intent to exercise a power, the contrary rule is stated in the present section for two reasons: (1) this is still the majority rule in the United States, and 2) most powers of appointment are created in marital deduction trusts and thedonor would prefer to have the property pass under his trust instrumentunless thedonee affirmativelvmanifests an intenttoexerciset.hepower. The public policy of this State therefore resolves the issue in favor of finding that T,illian E. Allen did not exercise the power of appointment granted by her husband's will. Thus, we aFfirm.



# /Justices