Court Opinion

ID: 5164367
Source: CourtListenerOpinion
Date Created: 2022-01-02 03:18:56.070044+00
Date Added: 2024-06-11T08:25:46.851600
License: Public Domain

The issue presented on appeal is whether Mrs. Burgess's holographic codicil validly exercised the power of appointment Dr. Burgess granted to Mrs. Burgess in the Marital Trust. The trial court, after holding an evidentiary hearing, determined that Mrs. Burgess had validly exercised the *Page 1394 
power referred to in the Marital Trust. The majority reverses the trial court's decision under what I believe is a hypertechnical application of the law, which effectively contravenes the intent of both Dr. Burgess and his wife as expressed in their donative instruments.
The relevant provision of the Marital Trust states:
 Upon the death of Mala P. Burgess, the remaining principal, including any uncollected and/or undistributed income shall be paid over . . . [to such] appointees, including her estate, and in any proportions and in any manner as she shall direct by Will in expressly intending to exercise this power by making specific reference therein to said power.
The trial court concluded that Mrs. Burgess intended to exercise the power of appointment granted to her under the Marital Trust. The court based this conclusion on subsidiary findings that the word "trust," written and underlined twice in the codicil, could only refer to the Marital Trust, based upon its contents and the surrounding facts and circumstances; Mrs. Burgess had expressed an intent to exercise her power of appointment by the codicil; and "[o]ne full page of Decedent Mala P. Burgess' Codicil was dedicated to the Marital Trust and its disposition."
The majority concludes that, even if Mrs. Burgess intended to exercise the power of appointment, the exercise was invalid because she did not specifically use the words "power of appointment" in her holographic codicil. The majority correctly states that Dr. Burgess was free to place restrictions on the manner in which Mrs. Burgess could exercise the power of appointment. See In re Estate of Smith, 41 Colo. App. 366,585 P.2d 319, 321 (1978); Estate of McNeill, 463 A.2d 782, 784 (Me. 1983); Cross v. Cross, 559 S.W.2d 196, 200-01 (Mo.Ct.App. 1977); Holzbach v. United Virginia Bank, 216 Va. 482,219 S.E.2d 868, 871 (1975). They then contend Dr. Burgess placed three separate and independent restrictions on Mrs. Burgess's exercise of the power: (1) she must exercise the power by will, (2) she must expressly intend to exercise the power, and (3) she must make specific reference to the "power." They argue that even if Mrs. Burgess satisfied the first two requirements, she failed to satisfy the third. That is, she "never referred to the power." I disagree.
Dr. Burgess's restrictions are fairly read to require Mrs. Burgess to demonstrate in her will that she intended to exercise the power given to her in the Marital Trust by specifically referring to the power, not by using the magic words "power of appointment." Mrs. Burgess did specifically refer to the power by captioning the relevant portion of her codicil, "Trust" and by specifically disposing of the property subject to the power in her codicil, as found by the trial court.1 This reading is consistent with a modern approach to probate law.
The Utah Uniform Probate Code simplifies the execution of wills and its intent is to "validate the will whenever possible." Editorial Board Comment, Utah Code Ann. § 75-2-Part 5 (1978). Accordingly, the only requirements for a valid holographic will are that the signature and material provisions be in the handwriting of the testator, see Utah Code Ann. §75-2-503 (1978), thereby allowing a layperson to make a will without enlisting the services of an attorney. Furthermore, Utah Code Ann. § 75-2-603 (1978) gives priority to the testator's intent over formal rules of construction: *Page 1395 
"[t]he intention of a testator as expressed in his will controls the legal effect of his dispositions." The code's approach attempts to eliminate unnecessary ritualistic formality and magic words and is directed toward giving effect to what the testator intends. For example, Utah Code Ann. §75-2-610 (1978) provides:
 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.
Id. (emphasis added). Thus, specific reference to a power of appointment in a general testamentary disposition is required merely to demonstrate the testator intended to exercise the power, and specific reference is not even required where there is some other indication of intention. The words "power of appointment" are not necessary to demonstrate such intent.
Where the donor of the power intends to impose requirements other than an indication of the donee's intent to exercise the power, the donor's requirements control over section 75-2-610.See section 75-2-603. Contrary to the majority's view, Dr. Burgess stated no intent to require more than that Mrs. Burgess purposefully exercise the power by referring to it.
The majority relies on four cases in deciding Dr. Burgess required Mrs. Burgess to refer to the Marital Trustand use the words "power of appointment" in order to exercise the power. Three of the four cases involve general residuary clauses or general property dispositions purporting to bequeath any property over which the testator "may have a power of appointment of whatsoever nature, kind or description."Holzbach, 219 S.E.2d at 870; cf. Smith, 585 P.2d at 321 ("any property in which I hold a power of appointment"); In re Estateof Schede2, 426 Pa. 93, 231 A.2d 135, 136 (1967) (property "of which I may have a power of appointment"). In these cases, the testators used the words "power of appointment" but failed to demonstrate that they knew they had such a power, what that power was, and that they intended to exercise it. In the fourth case, the testator did not in any manner refer to a power of appointment and simply bequeathed the remainder of his property, wherever situated, "which [he] may own or have the right to dispose of." Leidy Chem. Found., Inc. v. First Nat'lBank, 276 Md. 689, 351 A.2d 129, 130 (1976).
In contrast, Mrs. Burgess did not use a general, blanket residuary clause to exercise her power. She purposefully hand-wrote her codicil, referring specifically to the trust granting her the power and to the property over which she had the power of appointment. Thus, I would conclude she did precisely what her husband directed. I agree with the trial court's determination that Mrs. Burgess complied with the requirements Dr. Burgess specified in the Marital Trust.
However, even if Mrs. Burgess did not strictly comply with the requirements, I think the better reasoned approach is to look to evidence of Dr. Burgess's intent in imposing the requirements and Mrs. Burgess's intent in her testamentary dispositions and to give effect to their demonstrated intentions. Cases taking this approach hold a nonconforming exercise to be effective where the donee clearly intended to exercise the power and the defective exercise does not run contrary to the donor's intent. See In re Strobel, 149 Ariz. 213,717 P.2d 892, 899 (1986); Motes/Henes Trust v. Motes,297 Ark. 380, 761 S.W.2d 938, 940 (1988); McNeill, 463 A.2d at 784-85; Cross, 559 S.W.2d at 208-10; First Union Nat'l Bank v.Moss, 32 N.C. App. 499, 233 S.E.2d 88, 94, review denied,292 N.C. 728, 235 S.E.2d 783 (1977).
In applying this approach, the first step is to determine what the donor, Dr. Burgess, intended by requiring specific reference to the power. "In the absence of some indication to the contrary, it can be assumed that the donor 'obviously intended *Page 1396 
to assure that the power would be exercised as a deliberate, considerate act, and to prevent an inadvertent exercise of the power by a residuary clause.' " Roberts v. Northern Trust Co.,550 F. Supp. 729, 733 (N.D.Ill., E.D. 1982) (quoting In reEstate of MacLeish, 35 Ill. App.3d 835, 342 N.E.2d 740, 743
(1976)); accord Strobel, 717 P.2d at 899; Cross, 559 S.W.2d at 208-09; Moss, 233 S.E.2d at 93-94. But see First Nat'l Bank v.Walker, 607 S.W.2d 469, 475 (Tenn. 1980) (donor's will and facts surrounding its execution demonstrated intent to require more than general reference to power). Dr. Burgess did not indicate he intended more than to require Mrs. Burgess to purposefully exercise the power.
The second step is to look to evidence of the donee's intent to exercise the power of appointment and determine whether the donee's exercise sufficiently complies with the donor's requirements to satisfy the donor's intent. "Where a donee undertakes to exercise a testamentary power of appointment by a validly executed will substantial compliance with the donor's requirements should suffice." Holzbach, 219 S.E.2d at 873 (Harrison and Cochran, JJ., dissenting). Parol evidence of the donee's intent to exercise a power, without evidence of such intent within the will, does not amount to substantial compliance with a donor's requirement to specifically refer to the power in the will. Parol evidence is relevant, however, to explain the donee's use of a term in her will (e.g. that the term "Trust" refers to the donee's power of appointment.) If the donee substantially complies with the donor's requirements and there is evidence demonstrating the donee's intent to deliberately exercise the power, the donee has sufficiently complied with the donor's requirements to satisfy the donor's intent. See Roberts, 550 F. Supp. at 735.
Mrs. Burgess complied with Dr. Burgess's requirements. She referred to the trust containing the power in her codicil. She demonstrated her intent to exercise the power of appointment not only by referring to the trust granting her the power, but by specifically bequeathing property covered by the power,3 by bequeathing property in amounts exceeding her own property,4 and by dedicating a full page to the trust property controlled by the power and its disposition. Thus, the appointment was not inadvertent, but rather deliberate and intentional, and satisfied Dr. Burgess's purpose.
The approach outlined above is consistent with the probate code's emphasis on testator intent and liberal construction in interpreting wills. Modern probate should allow a person to exercise a testamentary power of appointment without having to pay an attorney, if the person's intention is apparent and the donor's intent is satisfied. I disagree with the majority's technical, artificial construction of "specific reference" that in essence prevents a layperson from effectively exercising such a power of appointment by holographic instrument. *Page 1397 
In conclusion, I would affirm the trial court's determination that Mrs. Burgess's holographic codicil complied with the requirements for exercising her power of appointment set forth in the Marital Trust.
1 The trial court's Findings of Fact and Conclusions of Law state:
 The references to the Mala P. Burgess Marital Trust as contained in the Codicil are sufficiently specific to exercise the power of appointment. Little else can be reasonably interpreted from the language and little else can be understood as to the intention of Decedent Mala P. Burgess since the assets which were subject to the power of appointment are described. . . . Decedent Mala P. Burgess' exercise of the power was plainly expressed in the Codicil (and generally implied as well) and satisfied the specific reference requirement of the Mala P. Burgess Marital Trust.
(Emphasis added.)
2 This case involved a special power of appointment, not a general power of appointment and the court pointed out the distinction. See Schede, 231 A.2d at 137.
3 Restatement (Second) of Property § 17.4 (1984) states: "If a donee sufficiently identifying property covered by a power, purports to dispose of the property by deed or will, the donee thereby manifests an intent to exercise the power." See alsoFirst Interstate Bank v. Lindberg, 49 Wn. App. 788,746 P.2d 333, 338 (1987) ("References in the will to the property subject to the power or to the instrument creating it can supply the necessary intent to exercise the power. This is especially true when the testator's appointed interest is the only interest she can devise.").
The trial court found Mrs. Burgess made specific bequests of Marital Trust property. Supporting this finding are the two references to the "Trust" in the codicil, the absence of other trusts to which "Trust" could refer, and the specific, separate disposition of most of Mrs. Burgess's personal assets. The majority contends in footnote five that "there was no express indication in the codicil that the property being distributed was to come from the Marital Trust estate. The cash distributions could have come either from Mrs. Burgess's own inter vivos trusts or her estate." In thus contending, the majority ignores the trial court's findings of fact that Mrs. Burgess made specific bequests of property from the Marital Trust in her codicil.
4 See Restatement (Second) of Property § 17.5, comment a (1984).
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