Also known as: permissible appointees · valid appointee
Written by attorneys — see sources below.
A person to whom appointive property may be assigned under a power of appointment. An appointment to a permissible appointee becomes ineffective to the extent it is conditioned on conferring a benefit on an impermissible appointee or is otherwise motivated to benefit a nonobject.
Pearl Porter held a nongeneral power to appoint trust income among her three siblings. She executed an instrument appointing the income to her brother Parker Phillips on the condition that he pay half the funds to her estranged cousin. The trustee refused to honor the appointment because the condition diverted value to an impermissible appointee outside the sibling class.
Cabot Jackson Morse held a power to appoint remainder interests in the Marian Hovey Trust only among his siblings and their descendants. After his death the trustees faced competing claims because one purported appointment directed principal to an estate outside the permitted class. The court determined that the transfer could reach only those who qualified as permissible appointees living at the donee's death.
Marian Hovey died in 1898, survived by her brother Henry S. Hovey, her sister Fanny H. Morse, and two nephews, John Torrey Morse, Third, and Cabot Jackson Morse. By her will, she left the residue of her estate in trust with the income payable in equal shares to her brother and sister during their lives. Upon her brother’s death in 1900, his share of the income passed to her sister. Upon her sister’s death in 1922, the income was paid in equal shares to her two nephews. John Torrey Morse, Third, died in 1928 unmarried and without issue, so his share passed to Cabot Jackson Morse, who remained the sole income beneficiary until his death in 1946. At the death of Cabot Jackson Morse, the will directed the trustees to divide the trust fund into two equal parts. It directed transfer of one part to the use of the wife and issue of each nephew as he may have appointed by will. This was subject to limitations that only income could be appointed to a widow living at Marian Hovey’s death. If either nephew left no such appointees then living, the whole fund was to be paid to the appointees of his brother. If neither nephew left such appointees then living, the whole trust fund was to be paid in equal shares to the Boston Museum of Fine Arts, the Massachusetts Institute of Technology, and the President and Fellows of Harvard College, with a proviso regarding the medical school admitting women. Cabot Jackson Morse was survived by his wife Anna Braden Morse, who was living at Marian Hovey’s death, and by his son Cabot Jackson Morse, Jr., who died in 1948. In his will, Cabot Jackson Morse appointed to his wife the right to the income during her lifetime from the property subject to the power under Marian Hovey's will. He left the residue of his estate to her. Anna Braden Morse received the trust income until her death in 1983. In 1951, the court held in Massachusetts Institute of Technology v. Loring that the charities had no interest in the trust. Following Anna Braden Morse’s death, the trustees brought this complaint for instructions as to the disposition of the trust principal. The complaint identified possible recipients including the estate of Cabot Jackson Morse, Jr., the estate of Anna Braden Morse, the intestate takers of Marian Hovey’s estate, and the three charities. A single justice of this court reserved and reported the case for determination of the proper distribution.
View caseA fiduciary compares the recipient against the class expressly named in the creating instrument. If the recipient falls inside that class the transfer is to a permissible appointee. If the recipient lies outside the class the transfer is to an impermissible appointee.
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The appointment is ineffective to the extent of the improper condition. The property passes as though the power had not been exercised with respect to that portion.
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Yes. A trustee commits a breach of trust when it carries out a direct appointment to a person or entity outside the class authorized by the instrument, regardless of any good-faith belief that the transfer serves the trust's purposes.
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Yes. A fiduciary that transfers property to a person within the permitted class commits no breach unless it knows or has reason to know that the appointment itself violated the donee's authority under the governing instrument.
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…death of Cabot Jackson Morse; (b) in equal shares to the estates of Cabot Jackson Morse, Jr. and Anna Braden Morse as the only permissible appointees living at the death of Cabot Jackson Morse; (c) to the estate of Anna Braden Morse as the only actual appointee living at the death of Cabot Jackson Morse; (d) to the intestate takers of…