Also known as:gift in default clause · gift-in-default clauses
Written by attorneys · grounded in primary & secondary sources — see below
A clause in a donative instrument that designates the persons who receive appointive property when a power of appointment is not effectively exercised.
Sources & Authorities
How it applies
Common Examples
3
Failed Appointment Triggers Default
Guadalupe Gallegos created a trust granting her son a general power over investment assets and named Metro Museum as taker in default if the power went unexercised. The son attempted to appoint the assets to a nonexistent incubator. Because the appointment failed, the museum receives the assets under the clause.
No Default Sends Property to Estate
Gwen Gallagher transferred startup shares to a trust giving her daughter a general power but included no clause naming takers in default. The daughter appointed the shares to a nonexistent club. The shares pass to the daughter's estate because no effective default provision exists.
Put it into practice
Test Yourself
10
Practice Questions5
· 1 primary source
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Restatements
Casebooks
Study Supplements
Residuary Clause Does Not Exercise
Gavin Grant placed family land in trust for his brother with a general power and an explicit gift-in-default clause favoring the brother's children. The brother's will contained only a residuary clause. The residuary clause does not exercise the power, so the children take under the default clause.
Common questions
Frequently Asked
4
What happens to appointive property when a donee makes an ineffective appointment under a general power?+
The gift-in-default clause controls the disposition to the extent the clause is effective. If the donor provided no such clause or the clause itself fails, the property passes to the donee or the donee's estate.
Supporting sources
Does a residuary clause in the donee's will exercise a general power of appointment?+
A residuary clause does not manifest an intent to exercise the power unless the power is general, the donor provided no takers in default, and the gift-in-default clause is ineffective.
Supporting sources
Who qualifies as a taker in default of appointment?+
A taker in default is any person identified in the gift-in-default clause to receive appointive property when the power is not effectively exercised. The clause often names a class of recipients.
Supporting sources
When does an ineffective appointment cause property to revert to the donor?+
Reversion occurs only if the donor supplied no gift-in-default clause or that clause itself proves ineffective. Modern doctrine channels the property to the donee's estate instead of implying a reversion.
Supporting sources
Trusts and Estates Trusts and Future InterestsFuture interests · Powers of appointmentUBEFoundational