Also known as:implied gifts in default · gift in default
Written by attorneys · grounded in primary & secondary sources — see below
An implied disposition of unappointed property to the permissible appointees of a nongeneral power of appointment when the donor provided no effective gift-in-default clause. The disposition arises only if the permissible appointees form a defined and limited class and the donor has not manifested an intent that they receive the property solely through the donee's exercise of the power.
Sources & Authorities
How it applies
Common Examples
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Trust Income Appointment Among Descendants
Imani Idowu settled royalties into an irrevocable trust granting her spouse Scott a nongeneral power to appoint income among their descendants. The trust contained no gift-in-default clause. Scott died without exercising the power, survived by their daughter Ingrid Innes and by Imani's siblings. The class of permissible appointees was closed and limited to four living descendants. Because the class was defined and limited and Imani had not expressed an intent that the descendants receive property only through appointment, the unappointed income passed by implied gift in default to Ingrid.
Power of Sale Over Remainder Interest
Ismael Ibrahim devised land to his son for life with a remainder to his daughter and grandson, subject to the son's power of sale. The son died without exercising the power. The remainder interests had vested subject to divestment by the power. Upon the son's death the unappointed property passed under the implied gift in default to the daughter and grandson as the permissible appointees living at the time the power lapsed.
Select any source to read its text and confirm it supports the definition.
Restatements
Casebooks
Robertson v. Robertson48 N.E.2d 29 (Mass. 1943)
Common questions
Frequently Asked
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What conditions must exist for an implied gift in default to arise under a nongeneral power?+
The donor must have failed to provide an effective gift-in-default clause. The permissible appointees must form a defined and limited class. The donor must not have manifested an intent that the appointees receive the property only to the extent the donee elects to appoint it to them.
Supporting sources
What happens to unappointed property if the conditions for an implied gift in default are not met?+
The property passes under a reversionary interest to the donor or the donor's transferees or successors in interest.
Supporting sources
Does language granting the donee sole and absolute discretion to appoint to one or more members of a class manifest an intent that defeats an implied gift in default?+
Yes. Such language indicates that the donor intended the permissible appointees to receive property only to the extent the donee elects to appoint it to them, so the implied gift rule does not operate even when the class is defined and limited.
Supporting sources
How does an implied gift in default interact with an effective gift-in-default clause?+
An effective gift-in-default clause controls the disposition of unappointed property. The implied gift arises only to the extent that no effective clause exists.
Supporting sources
484 N.E.2d 1315 (Mass. 1985)Family Law
…retained the income for her life. We think that the phrase no ‘such appointees then living’ is not the equivalent of an express gift in default of appointment, a phrase used by the testatrix in the preceding paragraph.” In Frye v. Loring , 330 Mass. 389, 393 (1953), the court reiterated that the charities had no interest in the…
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