Generalidades sobre la actividad cultural de la Universidad de Antioquia 2014-2018

A general power of appointment is by definition incapable of being a trust power for the courts are incapable of exercising such power. A general power of appointment is one that entitles the donee of the power to appoint in favour of anyone, including himself. Thus, there are no limits to

the objects of such a power of appointment. Anyone is a potential beneficiary. But owing to the principle that all property is required to be owned, the donee of the power is treated as being entitled to the property until he disposes of it in favour of another.

Similarly, a hybrid or intermediate power of appointment is incapable of being a trust power. A hybrid power is similar in appearance to a general power, save for the disqualification from benefiting an excluded class of objects, for example, ‘on trust for X to appoint in favour of anyone except the settlor and his spouse’. In Re Manisty the court decided that, on the facts of the case, a hybrid power was created.

Re Manisty’s Settlement [1973] 3 WLR 341, HC

Facts

The trustees were given a power to add objects to a class of potential beneficiaries, which excluded the settlor, his wife and certain named persons.

Held

A valid hybrid power of appointment was created and no duty to distribute the property was imposed on the donees of the power:

Templeman J: The power to add beneficiaries and to benefit the persons so added is exercisable in favour of anyone in the world except the settlor, his wife, the other members of the excepted class for the time being and the trustees . . . This is not a general power exercisable in favour of a class, but an intermediate power exercis- able in favour of anyone, with certain exceptions . . . The argument based on the principle of non-delegation stems from the proposition that a testator must not delegate to other persons the right to make a will for him. It is however, established by authority that a testator and a fortiori a settlor, may create powers of disposition exercisable by individuals or by trustees without thereby infringing any rule against delegation . . . In Re Park [1932] 1 Ch 580, Clauson J held valid an intermediate power conferred by a testator on an individual to appoint to anyone in the world, except the donee of the power . . . in Re Abrahams’ Will Trust [1969] 1 Ch 463, Cross J held valid an intermediate power conferred by a testator on trustees to appoint to anyone in the world except the trustees, and he expressly rejected the argument based on the principle of non-delegation. I conclude that the settlor in the present case was not precluded by the doctrine of non-delegation from conferring an intermediate power on his trustees.

Note

A similar decision was reached in Blausten v Inland Revenue Commissioners [1972] Ch 256.

Moreover, a testator may create a hybrid power of appointment by will, authorising his executors or trustees to distribute the property after his death. In Re Beatty, the court reasoned that if the power would have been valid had it been created inter vivos, the mere fact that it was created by will does not invalidate it. Such disposition does not amount to a delegation of testamentary freedom and does not contravene the Wills Act 1837.

Re Beatty (Decd), Hinves and Others v Brooke and Others [1990] 1 WLR 1503, HC

Facts

The testatrix died in 1986, leaving an estate valued at £32m, and by will made the following dispositions:

Clause 3(a):

I bequeath all my personal chattels . . . to my trustees who shall at any time or times (but nevertheless within the period of two years following my death or such shorter period as they my trustees in writing decide) allocate divide or make over all or any such personal chattels to or among such person or persons (whether individual or corporate) as they think fit and any of my said personal chattels not so allocated divided or made over shall fall into and become part of my residuary estate . . .

Clause 4(a):

Subject to these gifts, Mrs Beatty left the residue of her estate in three equal shares, subject to certain trusts and gifts over to her daughter and grandchildren. The executors and trustees applied to the court to determine the validity of clauses 3 and 4 of the will.

Held

Both clauses were valid. The clauses created hybrid powers of appointment which conferred fiduciary duties on the executors and trustees:

Hoffman J: The powers, being fiduciary, are not general powers in the sense of the traditional classification which equates such a power with an outright beneficial disposition to the donee himself. Nor are they special powers in the traditional sense. The objects of the powers can hardly be described as a class. They are intermediate or hybrid powers of the kind considered in Re Park [1932] 1 Ch 580.

Mr Price (counsel for the residuary beneficiaries) conceded that if clauses 3 and 4 had appeared in a settlement (inter vivos), they would have been valid powers. But he said that as part of a will they were invalidated by the rule that a testator cannot delegate the making of his will. In support of the existence of such a rule, Mr Price [referred to a statement by Lord Simonds in] Chichester Diocesan Fund and Board of Finance (Incorporated)

v Simpson [1944] AC 341. Lord Simonds said, at p 371:

It is a cardinal rule, common to English and to Scots law, that a man may not delegate his testamentary power. To him the law gives the right to dispose of his estate in favour of ascertained or ascertainable persons. He does not exercise that right if in effect he empowers his executors to say what person or objects are to be his beneficiaries. To this salutary rule there is a single exception. A testator may validly leave it to his executors to determine what charitable objects shall benefit, so long as charitable and no other objects may benefit.

But Lord Simonds must also have known that for centuries testators had been creating special powers of appointment. Furthermore, they had also been creating general powers of appointment.

The execution of an otherwise valid general, special, or intermediate power is giving effect to the testator’s will and not making a will for a testator who has failed to do so himself. The reason why Lord Simonds said that charitable gifts were the only exception to this rule was because they are, indeed, the only case in which the courts will uphold a gift in terms which would otherwise be regarded as too vague. Thus, it seems to me that Lord Simonds, like other judges in earlier cases concerning gifts void for uncertainty, was intending to do no more than to state in forceful and dramatic terms the rule that a gift which is expressed in language too vague to be enforced cannot be rescued by giving the executor a power of choice. Lord Simonds would, I think, have been astonished to learn that he had just outlawed the use of widely expressed powers, or perhaps even any powers at all, in wills.

The result is that once it is conceded that clauses 3 and 4 qualify as powers which would be valid if created by deed, there is in my judgment no rule of law to invalidate them because they happen to be in a will. Nor can I think of any good reason why such a distinction should exist. I shall accordingly declare that clauses 3 and 4 of the will are valid.