What is the Status of a General Power of Appointment in a Will?

A recent British Columbia case has considered the validity of a general power of appointment in a will.  The Court conducted a thorough review of the law in this area, concluding that a general power of appointment is not void as a delegation of testamentary power but amounts to a disposition of a testator’s property directly to his or her executor.

In Pearson Estate v. Pearson, the British Columbia Supreme Court considered wording in a will whereby the testator appointed her son, Ronald, as executor.  Should Ronald predecease her, the testator appointed as executrix her granddaughter, Krista (not a daughter of Ronald).  The only dispositive portion of the will stated “I devise all the residue of my estate to be distributed as seen appropriate by my executor”.  The will then went on to state, in apparent contradiction,  “Beneficiary of this my will is my son Ronald Wesley Pearson”.

Ronald predeceased the testator and Krista was therefore appointed as executrix.  She took the position that under the general power of appointment, she was entitled to the benefit of the estate.  Ronald’s children took the position that the general power of appointment was void as infringing a rule against delegation by a testator of her power of disposition by will.  Alternatively, they took the position that the intention of the will was that Ronald should benefit and, as his issue, the gift to Ronald does not fail as a result of his predeceasing the testator, but passes to them.

The Court reviewed over a century of case law and commentary in Canada and other Commonwealth countries regarding the validity of a general power of appointment to an executor.  The Court concluded that there is no rule preventing a testator from giving such power to an executor provided such is not void for uncertainty.  As a result, a general power of appointment is considered to be equivalent to the testator devising his or her property directly to the executrix, therefore to Krista, subject to any contrary intention in the will.

Ronald’s children contended that a contrary intention did exist in that the will stated that Ronald was to be the beneficiary of the will.  They took the position that this indicated an intention to benefit Ronald and that, as he had predeceased the testator, the intended devise did not lapse but by statute fell to his issue.  The Court noted that the statutory rule that a gift to a predeceasing beneficiary leaving issue should not fail is subject to a contrary intention.  Here, the Court found such an intention.  It allowed extrinsic evidence as to the intention of the testator on grounds that the will was ambiguous.  The Court held that the testator intended that her estate devolve to Ronald under the general power of appointment but, if Ronald predeceased her, the estate should devolve to Krista under the same power.  The beneficiary provision was found to be redundant as concerns Ronald and not intended to bestow an additional benefit on him (and thus his issue).

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