No. 88-560 

IN THE SUPREME COURT OF THE STATF OF MONTAbTA 

1989 

IN THE MATTER 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, Judge presiding. 

COTTNSEL OF RECORD: 

For Appellant: 

Selden S. Frisbee, Cut Rank, Montana 

For Respondent : 

Marc Buyske; Anderson, Reattv & RuysFe, Shelhv, 

Montana 

5 

L3 Submitted on Briefs: March 23, 

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'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 a power of appointment 

granted Lillian E. Allen by the 1-ast will 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 the power. 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 trust be 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 the power 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 in minerals in Toole County, Montana. No mention of 

the royalties was made in the probate of either Mack's or 

Lillian's estates. 

Following Lillian's death, the royalties were discovered 

and this proceeding was initiated. Respondents argued that 

the royalties should pass entirely to Robert S. Allen and 

Marjorie W. Al-len as part of the residuary trust. Appellants 

contended that half of the royalties should be considered to 
be part of the marital deduction trust and thus pass to the 

heirs of TJillian as directed by the general residuary clause 

of her will. The District Court held that. the royalties were 

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.er Montana law, T.,illian failed 

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 (2d ed. 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 Probate Code, 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 exercise of power of appointment. 

A general residuary clause in a will or a will 

making general disposition of all of the testator's 

property does not exercise a power of appointment 

held by the testator unless specific reference is 

made to the power or there is some other indication 

of intention to include the property subject to the 

power. 

The reason for requiring a specific exercise of a power is 

stated in the Comment to 3 2-610, Uniform Probate Code: 

Although a substantial number of states have 

legislation to the effect that a will with a 

general residuary clause does manifest 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 the donor would prefer 

to have the property pass under his trust 

instrument unless the donee affirmativelv manifests 

an intent to exercise t.he power. 

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