Also known as: implied gifts in default of appointment · gift in default of appointment
Written by attorneys · grounded in primary & secondary sources — see below
A doctrine under which an appointee takes appointed property under a gift in default of appointment rather than under the appointment itself to the extent the appointee would have received the property as a taker in default had no appointment occurred. The doctrine also supplies an implied gift in default to permissible appointees when a donor creates a nongeneral power without designating takers in default and the class of appointees is defined and limited without a contrary intent that appointees receive property only through exercise of the power.
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Isabelle Inman created a trust granting her daughter Ilana a limited power to appoint trust assets among Isabelle's three grandchildren in equal shares. The trust named the same three grandchildren as equal takers in default. Ilana's will appointed the assets in identical one-third shares to each grandchild. Because the appointees and shares matched the default exactly, the grandchildren took their interests under the gift in default rather than under the will.
Isaac Irving transferred farm assets into a trust granting his daughter Ira a nongeneral power to appoint among descendants actively engaged in agriculture. The instrument contained no express gift in default. After Ira died without exercising the power, grandson Ibrahim continued daily farm work. The court determined that the class was defined and limited and that Isaac had not manifested an intent that descendants receive assets only through appointment, so the assets passed to Ibrahim under an implied gift in default.
An implied gift arises when the donor creates a nongeneral power without naming takers in default, the class of permissible appointees is defined and limited, and the donor has not manifested an intent that appointees receive property only through affirmative exercise of the power. The unappointed property then passes to the living permissible appointees at the time the power expires.
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The appointees take under the gift in default of appointment rather than under the appointment. This rule applies to the extent the appointee would have taken the property as a taker in default had the appointment not been made.
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Yes. When the donor provides an effective express gift in default, that clause controls the disposition of unappointed property and no implied gift to permissible appointees is constructed.
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The source affects issues such as the application of antilapse statutes or other rules that operate differently depending on whether property passes under the creating instrument or under the donee's will.
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