Court Opinion

ID: 9574342
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:04:17.311903+00
Date Added: 2024-06-11T12:44:23.868279
License: Public Domain

Harrison and Cochran, JJ.,
dissenting.
We dissent. It can be safely said that the primary motive of the great majority who avail themselves of the marital deduction is to qualify their estates for the tax deductions and benefits that flow therefrom. However, to reap these benefits, a wife for whom a marital trust is created, must be given a general power of appointment.
The Treasury regulation, which permits a donor to require that a power of appointment must be exercised by specific reference to the power, is not designed to provide the donor with an escape valve, or a technical tool, to deprive the donee of the use of the power. Its purpose is to provide a donor with the means of assuring himself that any power of appointment given will be consciously and knowingly, not inadvertently, exercised by the donee. That is all that he has a right to expect from or demand of the donee.
Arthur R. Hall created a marital trust and gave his wife, Julia H. Hall, as to the corpus, “a general power of appointment, by specific reference to the powers granted herein, in her will, in favor of hér estate, or, at her election in favor of any other party”. The husband did not specify the manner in which the specific reference was to be made. However, the will of Julia H. Hall was specific, and in it she made specific reference to the power of appointment she had been given. She devised to her sister, Hazel H. Holzbach, all of her estate. She particularized by adding “be it real, personal or mixed, or in winch I may have a power of appointment. . .”. [Emphasis supplied | By the use of this language she made a distinction between her property and the property which she could devise as donee. This wording also indicates a deliberate, conscious and knowing disposition of (1) her own property, and (2) the property over which she had a power of appointment.
All that Arthur R. Hall required of his wife was a “specific reference” in her will to the “powers” which he had granted her by his will, not a reference to his will or any specific clause thereof. What *488he granted was a power of appointment, and this is what the wife “had”. In Julia H. Hall’s will she referred to the power of appointment “I may have”. This language constituted a “specific reference” to the powers granted her. It indicated her considered intention to exercise the power.
The only reason for a reference in the wife’s will to the power of appointment she had was to manifest her intent to appoint in the manner prescribed by her husband. But for the requirement imposed by his will there would have been no occasion for any reference to the power. See'Code § 64.1-67.
A power of appointment must be executed in the manner prescribed by the donor. Thus, a power to appoint by will may not be exercised by deed. Gaskins v. Finks, 90 Va. 384, 19 S.E. 166 (1894); Hood v. Haden, 82 Va. 588, 592 (1886). Nevertheless, under Code § 64.1-50, a validly executed will exercising a power shall be deemed to be a valid execution of a power of appointment by will, even though the will creating the power may “expressly require” that the will exercising the power “shall be executed with some additional or other form of execution or solemnity”. Thus, the donee is not always required to adhere strictly to the donor’s directions in exercising a testamentary power of appointment. See Powers of Appointment in Virginia, 47 Va. L. Rev. 711, 723 (1961). It is apparent from this statute and from the cases that powers of appointment are favored in Virginia. 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. Indeed, substantial compliance by deed has been held to be sufficient. Walke v. Moore, 95 Va. 729, 734, 30 S.E. 374, 375 (1898). To hold that the donor’s directions in the present case can only be fulfilled by a detailed reference in the wife’s will to the power of appointment created by her husband’s will, when she has carefully disposed of all property over which she has a power of appointment, is to adopt an unduly strained, technical and artificial construction.
When Hall elected to establish the marital deduction trust, with its attendant tax benefits, he voluntarily accepted the risk that his wife, as donee of the testamentary power, might appoint beneficiaries other than those preferred by her husband in his will. Aside from tax advantages, the flexibility of a power of appointment makes it especially attractive as a means of meeting unanticipated changes in circumstances. Its use should be encouraged rather than frustrated by rigid *489formalism. Here, the intent of the donee to exercise the power of appointment pursuant to the donor’s requirements is clear. We would hold that the power was validly exercised and reverse the decree of the trial court.