Beals v. State St. Bank & Tr. Co. - 367 Mass. 318, 326 N.E.2d 896 (1975)

Rule:

In interpreting the will of a donee to determine whether a power of appointment was exercised, a court applies the substantive law of the jurisdiction whose law governs the administration of the trust.

Facts:

The trustees under the will of Arthur Hunnewell filed the current petition for instructions, seeking a determination of the proper distribution to be made of a portion of the trust created under the residuary clause of Arthur’s will. Following the death of her mother, one of the trust’s beneficiaries, Isabella Hunnewell, a resident of New York, requested the trustees to exercise their discretionary power to make principal payments by transferring substantially all of her trust share to her family. Isabella then executed an instrument that partially released her general power of appointment under the will of her father. When she died, it was thought that she did not expressly exercise her power of appointment under her father's will. The Probate Court for the County of Norfolk (Massachusetts) reserved decision, and the case was transferred to the court.

Issue:

1. Should Isabella’s will be construed according to the law of Massachusetts?
2. Did Isabella exercise her power of appointment under her father’s will?

Answer:

1) Yes. 2) Yes.

Conclusion:

The Court held that where foreign domiciliary was a donee of a testamentary power of appointment over property in a testamentary trust under the will of a Massachusetts domiciliary, the substantive law of Massachusetts was to be applied in interpreting the will of the donee to determine whether the power of appointment was exercised. Applying the Massachusetts law, the Court determined that the residuary clause of the daughter's will should be presumed to have exercised the power of appointment based on the canons of construction applicable to general and special testamentary powers of appointment.